SWOT Analysis / TOWS Matrix for Sapura Resources (Malaysia)
Based on various researches at Oak Spring University , Sapura Resources is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, talent flight as more people leaving formal jobs,
technology disruption, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sapura Resources can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sapura Resources, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sapura Resources 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 Sapura Resources can be done for the following purposes –
1. Strategic planning of Sapura Resources
2. Improving business portfolio management of Sapura Resources
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sapura Resources
Strengths of Sapura Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sapura Resources are -
Ability to lead change in Real Estate Operations
– Sapura Resources is one of the leading players in the Real Estate Operations industry in Malaysia. Over the years it has not only transformed the business landscape in the Real Estate Operations industry in Malaysia but also across the existing markets. The ability to lead change has enabled Sapura Resources in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Sapura Resources in the Services sector have low bargaining power. Sapura Resources has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sapura Resources to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Sapura Resources comprises – understanding the underlying the factors in the Real Estate Operations 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.
Organizational Resilience of Sapura Resources
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sapura Resources does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Sapura Resources is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Real Estate Operations industry. The technology infrastructure of Malaysia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Sapura Resources 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 Sapura Resources is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sapura Resources emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Sapura Resources is one of the most innovative firm in Real Estate Operations sector.
Superior customer experience
– The customer experience strategy of Sapura Resources in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Sapura Resources has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Real Estate Operations industry. Secondly the value chain collaborators of Sapura Resources have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Real Estate Operations industry
– Sapura Resources is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Sapura Resources has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sapura Resources staying ahead in the Real Estate Operations industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Sapura Resources has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses of Sapura Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sapura Resources are -
Interest costs
– Compare to the competition, Sapura Resources has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Sapura Resources has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Real Estate Operations industry over the last five years. Sapura Resources even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee of Sapura Resources is just above the Real Estate Operations 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.
Low market penetration in new markets
– Outside its home market of Malaysia, Sapura Resources needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Sapura Resources has some of the most successful models in the Real Estate Operations industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sapura Resources should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Sapura Resources 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 Real Estate Operations industry using digital technology.
High cash cycle compare to competitors
Sapura Resources has a high cash cycle compare to other players in the Real Estate Operations industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Sapura Resources is one of the leading players in the Real Estate Operations industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Real Estate Operations industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Sapura Resources supply chain. Even after few cautionary changes, Sapura Resources is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sapura Resources vulnerable to further global disruptions in South East Asia.
High dependence on Sapura Resources ‘s star products
– The top 2 products and services of Sapura Resources still accounts for major business revenue. This dependence on star products in Real Estate Operations industry has resulted into insufficient focus on developing new products, even though Sapura Resources has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Sapura Resources is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but Sapura Resources needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sapura Resources to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Sapura Resources Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sapura Resources are -
Developing new processes and practices
– Sapura Resources can develop new processes and procedures in Real Estate Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Sapura Resources to increase its market reach. Sapura Resources 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sapura Resources to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sapura Resources can use these opportunities to build new business models that can help the communities that Sapura Resources operates in. Secondly it can use opportunities from government spending in Real Estate Operations sector.
Use of Bitcoin and other crypto currencies for transactions in Real Estate Operations industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sapura Resources in the Real Estate Operations industry. Now Sapura Resources 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 Real Estate Operations industry, but it has also influenced the consumer preferences. Sapura Resources can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Sapura Resources 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sapura Resources can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sapura Resources is facing challenges because of the dominance of functional experts in the organization. Sapura Resources can utilize new technology in the field of Real Estate Operations industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sapura Resources in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Real Estate Operations industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Sapura Resources has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Real Estate Operations sector. This continuous investment in analytics has enabled Sapura Resources to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sapura Resources to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Sapura Resources 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.
Buying journey improvements
– Sapura Resources can improve the customer journey of consumers in the Real Estate Operations industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Sapura Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sapura Resources are -
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 Sapura Resources business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Sapura Resources
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Sapura Resources.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sapura Resources may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Real Estate Operations sector.
Consumer confidence and its impact on Sapura Resources demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Real Estate Operations industry and other sectors.
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.
Regulatory challenges
– Sapura Resources 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 Real Estate Operations industry regulations.
High dependence on third party suppliers
– Sapura Resources 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.
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. Sapura Resources 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.
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 Sapura Resources in the Real Estate Operations sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sapura Resources 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 Sapura Resources prominent markets.
Easy access to finance
– Easy access to finance in Real Estate Operations industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sapura Resources can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Sapura Resources needs to understand the core reasons impacting the Real Estate Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Sapura Resources is facing in Real Estate Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Sapura Resources Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sapura Resources 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 Sapura Resources 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 Sapura Resources 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 Sapura Resources 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 Sapura Resources needs to make to build a sustainable competitive advantage.