Leweko Resources Bhd (LEWE) SWOT Analysis / TOWS Matrix / MBA Resources
Forestry & Wood Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Leweko Resources Bhd (Malaysia)
Based on various researches at Oak Spring University , Leweko Resources Bhd is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , wage bills are increasing, increasing commodity prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, etc
Introduction to SWOT Analysis of Leweko Resources Bhd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Leweko Resources Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leweko Resources Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leweko Resources 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 Leweko Resources Bhd can be done for the following purposes –
1. Strategic planning of Leweko Resources Bhd
2. Improving business portfolio management of Leweko Resources Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Leweko Resources Bhd
Strengths of Leweko Resources Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Leweko Resources Bhd are -
Ability to recruit top talent
– Leweko Resources Bhd is one of the leading players in the Forestry & Wood Products 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
– Leweko Resources Bhd is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Leweko Resources 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
– Leweko Resources Bhd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Forestry & Wood Products industry. Secondly the value chain collaborators of Leweko Resources Bhd have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Leweko Resources Bhd in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Leweko Resources 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 Leweko Resources Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Leweko Resources Bhd emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Leweko Resources Bhd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Leweko Resources Bhd staying ahead in the Forestry & Wood Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Leweko Resources Bhd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Leweko Resources Bhd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Leweko Resources Bhd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Leweko Resources Bhd has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Leweko Resources Bhd is one of the most innovative firm in Forestry & Wood Products sector.
High switching costs
– The high switching costs that Leweko Resources 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.
Low bargaining power of suppliers
– Suppliers of Leweko Resources Bhd in the Basic Materials sector have low bargaining power. Leweko Resources Bhd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leweko Resources Bhd to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Forestry & Wood Products industry
– Leweko Resources Bhd has clearly differentiated products in the market place. This has enabled Leweko Resources Bhd to fetch slight price premium compare to the competitors in the Forestry & Wood Products industry. The sustainable margins have also helped Leweko Resources Bhd to invest into research and development (R&D) and innovation.
Weaknesses of Leweko Resources Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leweko Resources Bhd are -
Products dominated business model
– Even though Leweko Resources Bhd has some of the most successful models in the Forestry & Wood Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Leweko Resources Bhd should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Leweko Resources 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.
Ability to respond to the competition
– As the decision making is very deliberative at Leweko Resources Bhd, in the dynamic environment of Forestry & Wood Products industry it has struggled to respond to the nimble upstart competition. Leweko Resources Bhd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Malaysia, Leweko Resources Bhd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Leweko Resources 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 Forestry & Wood Products industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Leweko Resources Bhd, it seems that company is thinking out the frontier risks that can impact Forestry & Wood Products industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Leweko Resources Bhd is dominated by functional specialists. It is not different from other players in the Forestry & Wood Products industry, but Leweko Resources Bhd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Leweko Resources Bhd to focus more on services in the Forestry & Wood Products industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Leweko Resources Bhd has a high cash cycle compare to other players in the Forestry & Wood Products 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 decision making process
– As mentioned earlier in the report, Leweko Resources 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 Forestry & Wood Products industry over the last five years. Leweko Resources 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.
High bargaining power of channel partners in Forestry & Wood Products industry
– because of the regulatory requirements in Malaysia, Leweko Resources 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 Forestry & Wood Products industry.
Compensation and incentives
– The revenue per employee of Leweko Resources Bhd is just above the Forestry & Wood Products 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.
Leweko Resources Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Leweko Resources Bhd are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Leweko Resources Bhd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Leweko Resources 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 Forestry & Wood Products 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, Leweko Resources Bhd can use these opportunities to build new business models that can help the communities that Leweko Resources Bhd operates in. Secondly it can use opportunities from government spending in Forestry & Wood Products sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Leweko Resources 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.
Learning at scale
– Online learning technologies has now opened space for Leweko Resources 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.
Using analytics as competitive advantage
– Leweko Resources Bhd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled Leweko Resources Bhd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Leweko Resources Bhd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Leweko Resources Bhd can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Leweko Resources Bhd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Leweko Resources 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.
Manufacturing automation
– Leweko Resources Bhd can use the latest technology developments to improve its manufacturing and designing process in Forestry & Wood Products 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.
Creating value in data economy
– The success of analytics program of Leweko Resources Bhd has opened avenues for new revenue streams for the organization in Forestry & Wood Products industry. This can help Leweko Resources Bhd to build a more holistic ecosystem for Leweko Resources Bhd products in the Forestry & Wood Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Forestry & Wood Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Leweko Resources 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. Leweko Resources 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Leweko Resources Bhd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Leweko Resources Bhd to increase its market reach. Leweko Resources 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.
Threats Leweko Resources Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Leweko Resources Bhd are -
Increasing wage structure of Leweko Resources 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 Leweko Resources Bhd.
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 Leweko Resources Bhd in the Forestry & Wood Products sector and impact the bottomline of the organization.
Environmental challenges
– Leweko Resources 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. Leweko Resources Bhd can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Leweko Resources 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 Forestry & Wood Products sector.
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. Leweko Resources Bhd needs to understand the core reasons impacting the Forestry & Wood Products industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Forestry & Wood Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Leweko Resources Bhd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Leweko Resources Bhd.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Leweko Resources 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 Leweko Resources Bhd prominent markets.
Shortening product life cycle
– it is one of the major threat that Leweko Resources Bhd is facing in Forestry & Wood Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Leweko Resources 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 Forestry & Wood Products industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Forestry & Wood Products industry are lowering. It can presents Leweko Resources Bhd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Forestry & Wood Products sector.
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.
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.
Weighted SWOT Analysis of Leweko Resources Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Leweko Resources 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 Leweko Resources 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 Leweko Resources 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 Leweko Resources 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 Leweko Resources Bhd needs to make to build a sustainable competitive advantage.