Kim Teck Cheong Consolidated Bhd (KIMT) SWOT Analysis / TOWS Matrix / MBA Resources
Food Processing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Kim Teck Cheong Consolidated Bhd (Malaysia)
Based on various researches at Oak Spring University , Kim Teck Cheong Consolidated Bhd is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Kim Teck Cheong Consolidated Bhd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kim Teck Cheong Consolidated Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kim Teck Cheong Consolidated Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated Bhd can be done for the following purposes –
1. Strategic planning of Kim Teck Cheong Consolidated Bhd
2. Improving business portfolio management of Kim Teck Cheong Consolidated Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kim Teck Cheong Consolidated Bhd
Strengths of Kim Teck Cheong Consolidated Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kim Teck Cheong Consolidated Bhd are -
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Kim Teck Cheong Consolidated Bhd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kim Teck Cheong Consolidated Bhd has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Kim Teck Cheong Consolidated Bhd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kim Teck Cheong Consolidated Bhd staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Kim Teck Cheong Consolidated 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.
Highly skilled collaborators
– Kim Teck Cheong Consolidated Bhd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Kim Teck Cheong Consolidated Bhd have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Kim Teck Cheong Consolidated Bhd is present in almost all the verticals within the Food Processing industry. This has provided Kim Teck Cheong Consolidated 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.
Analytics focus
– Kim Teck Cheong Consolidated Bhd 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 Food Processing 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.
Operational resilience
– The operational resilience strategy of Kim Teck Cheong Consolidated Bhd comprises – understanding the underlying the factors in the Food Processing 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.
Innovation driven organization
– Kim Teck Cheong Consolidated Bhd is one of the most innovative firm in Food Processing sector.
Training and development
– Kim Teck Cheong Consolidated Bhd has one of the best training and development program in Consumer/Non-Cyclical 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.
Learning organization
- Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kim Teck Cheong Consolidated Bhd emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Kim Teck Cheong Consolidated Bhd is one of the leading players in the Food Processing 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.
Ability to lead change in Food Processing
– Kim Teck Cheong Consolidated Bhd is one of the leading players in the Food Processing industry in Malaysia. Over the years it has not only transformed the business landscape in the Food Processing industry in Malaysia but also across the existing markets. The ability to lead change has enabled Kim Teck Cheong Consolidated Bhd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Kim Teck Cheong Consolidated Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kim Teck Cheong Consolidated Bhd are -
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Kim Teck Cheong Consolidated 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.
Need for greater diversity
– Kim Teck Cheong Consolidated Bhd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ less understanding of Kim Teck Cheong Consolidated Bhd strategy
– From the outside it seems that the employees of Kim Teck Cheong Consolidated 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.
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in Malaysia, Kim Teck Cheong Consolidated Bhd is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Food Processing industry.
High operating costs
– Compare to the competitors, Kim Teck Cheong Consolidated Bhd has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kim Teck Cheong Consolidated Bhd lucrative customers.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Kim Teck Cheong Consolidated 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.
Interest costs
– Compare to the competition, Kim Teck Cheong Consolidated Bhd 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.
Compensation and incentives
– The revenue per employee of Kim Teck Cheong Consolidated Bhd is just above the Food Processing 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.
Capital Spending Reduction
– Even during the low interest decade, Kim Teck Cheong Consolidated 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 Food Processing industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Kim Teck Cheong Consolidated Bhd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Kim Teck Cheong Consolidated Bhd 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.
Aligning sales with marketing
– From the outside it seems that Kim Teck Cheong Consolidated Bhd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Food Processing industry have deep experience in developing customer relationships. Marketing department at Kim Teck Cheong Consolidated Bhd can leverage the sales team experience to cultivate customer relationships as Kim Teck Cheong Consolidated Bhd is planning to shift buying processes online.
Kim Teck Cheong Consolidated Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kim Teck Cheong Consolidated Bhd are -
Learning at scale
– Online learning technologies has now opened space for Kim Teck Cheong Consolidated Bhd to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Kim Teck Cheong Consolidated Bhd to increase its market reach. Kim Teck Cheong Consolidated 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.
Buying journey improvements
– Kim Teck Cheong Consolidated Bhd can improve the customer journey of consumers in the Food Processing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kim Teck Cheong Consolidated Bhd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kim Teck Cheong Consolidated Bhd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Kim Teck Cheong Consolidated Bhd can develop new processes and procedures in Food Processing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kim Teck Cheong Consolidated Bhd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kim Teck Cheong Consolidated Bhd can use these opportunities to build new business models that can help the communities that Kim Teck Cheong Consolidated Bhd operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kim Teck Cheong Consolidated 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. Kim Teck Cheong Consolidated 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.
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 Kim Teck Cheong Consolidated Bhd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Food Processing industry, but it has also influenced the consumer preferences. Kim Teck Cheong Consolidated Bhd 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
– Kim Teck Cheong Consolidated 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.
Using analytics as competitive advantage
– Kim Teck Cheong Consolidated Bhd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Kim Teck Cheong Consolidated Bhd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kim Teck Cheong Consolidated Bhd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Kim Teck Cheong Consolidated Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kim Teck Cheong Consolidated Bhd are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kim Teck Cheong Consolidated Bhd.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kim Teck Cheong Consolidated Bhd in Food Processing industry. The Food Processing 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.
Technology acceleration in Forth Industrial Revolution
– Kim Teck Cheong Consolidated Bhd has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Kim Teck Cheong Consolidated Bhd needs to keep up with the evolution of technology in the Food Processing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Kim Teck Cheong Consolidated Bhd
– 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 Kim Teck Cheong Consolidated Bhd.
High dependence on third party suppliers
– Kim Teck Cheong Consolidated 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.
Regulatory challenges
– Kim Teck Cheong Consolidated 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 Food Processing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated Bhd prominent markets.
Stagnating economy with rate increase
– Kim Teck Cheong Consolidated 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 Food Processing industry.
Environmental challenges
– Kim Teck Cheong Consolidated 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. Kim Teck Cheong Consolidated Bhd can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kim Teck Cheong Consolidated Bhd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Kim Teck Cheong Consolidated Bhd business can come under increasing regulations regarding data privacy, data security, etc.
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. Kim Teck Cheong Consolidated Bhd needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kim Teck Cheong Consolidated Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated 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 Kim Teck Cheong Consolidated Bhd needs to make to build a sustainable competitive advantage.