Malaysia Steel Works KL Bhd (MSWK) SWOT Analysis / TOWS Matrix / MBA Resources
Iron & Steel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Malaysia Steel Works KL Bhd (Malaysia)
Based on various researches at Oak Spring University , Malaysia Steel Works KL Bhd is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing energy prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of Malaysia Steel Works KL Bhd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Malaysia Steel Works KL Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Malaysia Steel Works KL Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Malaysia Steel Works KL Bhd operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Malaysia Steel Works KL Bhd can be done for the following purposes –
1. Strategic planning of Malaysia Steel Works KL Bhd
2. Improving business portfolio management of Malaysia Steel Works KL Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Malaysia Steel Works KL Bhd
Strengths of Malaysia Steel Works KL Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Malaysia Steel Works KL Bhd are -
Learning organization
- Malaysia Steel Works KL Bhd is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Malaysia Steel Works KL Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Malaysia Steel Works KL Bhd emphasize – knowledge, initiative, and innovation.
Ability to lead change in Iron & Steel
– Malaysia Steel Works KL Bhd is one of the leading players in the Iron & Steel industry in Malaysia. Over the years it has not only transformed the business landscape in the Iron & Steel industry in Malaysia but also across the existing markets. The ability to lead change has enabled Malaysia Steel Works KL Bhd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Malaysia Steel Works KL Bhd comprises – understanding the underlying the factors in the Iron & Steel industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Iron & Steel industry
– Malaysia Steel Works KL Bhd has clearly differentiated products in the market place. This has enabled Malaysia Steel Works KL Bhd to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped Malaysia Steel Works KL Bhd to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Malaysia Steel Works KL Bhd in the Basic Materials sector have low bargaining power. Malaysia Steel Works KL Bhd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Malaysia Steel Works KL Bhd to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Malaysia Steel Works KL Bhd is one of the leading players in the Iron & Steel industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Malaysia Steel Works KL Bhd is present in almost all the verticals within the Iron & Steel industry. This has provided Malaysia Steel Works KL Bhd a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Malaysia Steel Works KL Bhd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of Malaysia Steel Works KL Bhd have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Malaysia Steel Works KL Bhd are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Malaysia Steel Works KL Bhd has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management in the Iron & Steel industry
– Malaysia Steel Works KL Bhd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Malaysia Steel Works KL Bhd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Malaysia Steel Works KL Bhd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Malaysia Steel Works KL Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Malaysia Steel Works KL Bhd are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Malaysia Steel Works KL Bhd is slow explore the new channels of communication. These new channels of communication can help Malaysia Steel Works KL Bhd to provide better information regarding Iron & Steel products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Malaysia Steel Works KL Bhd, in the dynamic environment of Iron & Steel industry it has struggled to respond to the nimble upstart competition. Malaysia Steel Works KL Bhd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Malaysia Steel Works KL Bhd has high operating costs in the Iron & Steel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Malaysia Steel Works KL Bhd lucrative customers.
Lack of clear differentiation of Malaysia Steel Works KL Bhd products
– To increase the profitability and margins on the products, Malaysia Steel Works KL Bhd needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Malaysia Steel Works KL Bhd has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Iron & Steel industry using digital technology.
Skills based hiring in Iron & Steel industry
– The stress on hiring functional specialists at Malaysia Steel Works KL Bhd has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Malaysia Steel Works KL Bhd is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but Malaysia Steel Works KL Bhd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Malaysia Steel Works KL Bhd to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.
Employees’ less understanding of Malaysia Steel Works KL Bhd strategy
– From the outside it seems that the employees of Malaysia Steel Works KL Bhd don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Malaysia Steel Works KL Bhd is one of the leading players in the Iron & Steel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Iron & Steel industry in last five years.
Compensation and incentives
– The revenue per employee of Malaysia Steel Works KL Bhd is just above the Iron & Steel industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the Iron & Steel industry, Malaysia Steel Works KL Bhd needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Malaysia Steel Works KL Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Malaysia Steel Works KL Bhd are -
Manufacturing automation
– Malaysia Steel Works KL Bhd can use the latest technology developments to improve its manufacturing and designing process in Iron & Steel sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Malaysia Steel Works KL Bhd to increase its market reach. Malaysia Steel Works KL Bhd will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Malaysia Steel Works KL Bhd can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Iron & Steel industry.
Leveraging digital technologies
– Malaysia Steel Works KL Bhd can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Malaysia Steel Works KL Bhd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Malaysia Steel Works KL Bhd has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Malaysia Steel Works KL Bhd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled Malaysia Steel Works KL Bhd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Malaysia Steel Works KL Bhd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Iron & Steel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Malaysia Steel Works KL Bhd can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Malaysia Steel Works KL Bhd can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Malaysia Steel Works KL Bhd is facing challenges because of the dominance of functional experts in the organization. Malaysia Steel Works KL Bhd can utilize new technology in the field of Iron & Steel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Iron & Steel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Malaysia Steel Works KL Bhd in the Iron & Steel industry. Now Malaysia Steel Works KL Bhd can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. Malaysia Steel Works KL Bhd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Malaysia Steel Works KL Bhd to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Malaysia Steel Works KL Bhd to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Malaysia Steel Works KL Bhd has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help Malaysia Steel Works KL Bhd to build a more holistic ecosystem for Malaysia Steel Works KL Bhd products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Malaysia Steel Works KL Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Malaysia Steel Works KL Bhd are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Malaysia Steel Works KL Bhd in the Iron & Steel sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Malaysia Steel Works KL Bhd can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Malaysia Steel Works KL Bhd prominent markets.
Regulatory challenges
– Malaysia Steel Works KL Bhd needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Iron & Steel industry regulations.
Stagnating economy with rate increase
– Malaysia Steel Works KL Bhd can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Iron & Steel industry.
High dependence on third party suppliers
– Malaysia Steel Works KL Bhd high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Malaysia Steel Works KL Bhd needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Malaysia Steel Works KL Bhd in Iron & Steel industry. The Iron & Steel industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Malaysia Steel Works KL Bhd needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Malaysia Steel Works KL Bhd can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Malaysia Steel Works KL Bhd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Iron & Steel sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Malaysia Steel Works KL Bhd will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Malaysia Steel Works KL Bhd business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Malaysia Steel Works KL Bhd is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Malaysia Steel Works KL Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Malaysia Steel Works KL Bhd needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Malaysia Steel Works KL Bhd is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Malaysia Steel Works KL Bhd is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Malaysia Steel Works KL Bhd to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Malaysia Steel Works KL Bhd needs to make to build a sustainable competitive advantage.