TH Heavy Engineering Bhd (THHE) SWOT Analysis / TOWS Matrix / MBA Resources
Oil Well Services & Equipment
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for TH Heavy Engineering Bhd (Malaysia)
Based on various researches at Oak Spring University , TH Heavy Engineering Bhd is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of TH Heavy Engineering Bhd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that TH Heavy Engineering Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the TH Heavy Engineering Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which TH Heavy Engineering 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 TH Heavy Engineering Bhd can be done for the following purposes –
1. Strategic planning of TH Heavy Engineering Bhd
2. Improving business portfolio management of TH Heavy Engineering Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Oil Well Services & Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of TH Heavy Engineering Bhd
Strengths of TH Heavy Engineering Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of TH Heavy Engineering Bhd are -
Learning organization
- TH Heavy Engineering 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 TH Heavy Engineering Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at TH Heavy Engineering Bhd emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– TH Heavy Engineering Bhd is one of the most innovative firm in Oil Well Services & Equipment sector.
Analytics focus
– TH Heavy Engineering 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 Oil Well Services & Equipment 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.
Successful track record of launching new products
– TH Heavy Engineering Bhd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. TH Heavy Engineering 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.
Digital Transformation in Oil Well Services & Equipment industry
- digital transformation varies from industry to industry. For TH Heavy Engineering Bhd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. TH Heavy Engineering 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.
High brand equity
– TH Heavy Engineering Bhd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled TH Heavy Engineering Bhd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of TH Heavy Engineering Bhd comprises – understanding the underlying the factors in the Oil Well Services & Equipment 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.
Strong track record of project management in the Oil Well Services & Equipment industry
– TH Heavy Engineering 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.
Ability to lead change in Oil Well Services & Equipment
– TH Heavy Engineering Bhd is one of the leading players in the Oil Well Services & Equipment industry in Malaysia. Over the years it has not only transformed the business landscape in the Oil Well Services & Equipment industry in Malaysia but also across the existing markets. The ability to lead change has enabled TH Heavy Engineering Bhd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Oil Well Services & Equipment industry
– TH Heavy Engineering Bhd has clearly differentiated products in the market place. This has enabled TH Heavy Engineering Bhd to fetch slight price premium compare to the competitors in the Oil Well Services & Equipment industry. The sustainable margins have also helped TH Heavy Engineering Bhd to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that TH Heavy Engineering 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 TH Heavy Engineering Bhd in the Energy sector have low bargaining power. TH Heavy Engineering Bhd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps TH Heavy Engineering Bhd to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of TH Heavy Engineering Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TH Heavy Engineering Bhd are -
Slow decision making process
– As mentioned earlier in the report, TH Heavy Engineering 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 Oil Well Services & Equipment industry over the last five years. TH Heavy Engineering 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.
Increasing silos among functional specialists
– The organizational structure of TH Heavy Engineering Bhd is dominated by functional specialists. It is not different from other players in the Oil Well Services & Equipment industry, but TH Heavy Engineering Bhd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help TH Heavy Engineering Bhd to focus more on services in the Oil Well Services & Equipment industry rather than just following the product oriented approach.
High cash cycle compare to competitors
TH Heavy Engineering Bhd has a high cash cycle compare to other players in the Oil Well Services & Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Oil Well Services & Equipment industry, TH Heavy Engineering 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.
Slow to strategic competitive environment developments
– As TH Heavy Engineering Bhd is one of the leading players in the Oil Well Services & Equipment industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Oil Well Services & Equipment industry in last five years.
Need for greater diversity
– TH Heavy Engineering 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 TH Heavy Engineering Bhd, in the dynamic environment of Oil Well Services & Equipment industry it has struggled to respond to the nimble upstart competition. TH Heavy Engineering Bhd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Oil Well Services & Equipment industry
– because of the regulatory requirements in Malaysia, TH Heavy Engineering 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 Oil Well Services & Equipment industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, TH Heavy Engineering Bhd is slow explore the new channels of communication. These new channels of communication can help TH Heavy Engineering Bhd to provide better information regarding Oil Well Services & Equipment products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of TH Heavy Engineering Bhd is just above the Oil Well Services & Equipment 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.
Aligning sales with marketing
– From the outside it seems that TH Heavy Engineering Bhd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Oil Well Services & Equipment industry have deep experience in developing customer relationships. Marketing department at TH Heavy Engineering Bhd can leverage the sales team experience to cultivate customer relationships as TH Heavy Engineering Bhd is planning to shift buying processes online.
TH Heavy Engineering Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of TH Heavy Engineering Bhd are -
Using analytics as competitive advantage
– TH Heavy Engineering Bhd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil Well Services & Equipment sector. This continuous investment in analytics has enabled TH Heavy Engineering Bhd to build a competitive advantage using analytics. The analytics driven competitive advantage can help TH Heavy Engineering Bhd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for TH Heavy Engineering 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 TH Heavy Engineering Bhd to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for TH Heavy Engineering 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 Oil Well Services & Equipment industry, and it will provide faster access to the consumers.
Manufacturing automation
– TH Heavy Engineering Bhd can use the latest technology developments to improve its manufacturing and designing process in Oil Well Services & Equipment 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 TH Heavy Engineering Bhd to increase its market reach. TH Heavy Engineering 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.
Creating value in data economy
– The success of analytics program of TH Heavy Engineering Bhd has opened avenues for new revenue streams for the organization in Oil Well Services & Equipment industry. This can help TH Heavy Engineering Bhd to build a more holistic ecosystem for TH Heavy Engineering Bhd products in the Oil Well Services & Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 TH Heavy Engineering 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.
Loyalty marketing
– TH Heavy Engineering 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.
Use of Bitcoin and other crypto currencies for transactions in Oil Well Services & Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for TH Heavy Engineering Bhd in the Oil Well Services & Equipment industry. Now TH Heavy Engineering Bhd can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Oil Well Services & Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. TH Heavy Engineering 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. TH Heavy Engineering 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Oil Well Services & Equipment industry, but it has also influenced the consumer preferences. TH Heavy Engineering Bhd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– TH Heavy Engineering Bhd can improve the customer journey of consumers in the Oil Well Services & Equipment 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.
Leveraging digital technologies
– TH Heavy Engineering 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.
Threats TH Heavy Engineering Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of TH Heavy Engineering Bhd are -
Environmental challenges
– TH Heavy Engineering 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. TH Heavy Engineering Bhd can take advantage of this fund but it will also bring new competitors in the Oil Well Services & Equipment industry.
Shortening product life cycle
– it is one of the major threat that TH Heavy Engineering Bhd is facing in Oil Well Services & Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for TH Heavy Engineering Bhd in Oil Well Services & Equipment industry. The Oil Well Services & Equipment 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.
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 TH Heavy Engineering Bhd.
Technology acceleration in Forth Industrial Revolution
– TH Heavy Engineering Bhd has witnessed rapid integration of technology during Covid-19 in the Oil Well Services & Equipment industry. As one of the leading players in the industry, TH Heavy Engineering Bhd needs to keep up with the evolution of technology in the Oil Well Services & Equipment 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.
Regulatory challenges
– TH Heavy Engineering 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 Oil Well Services & Equipment industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil Well Services & Equipment industry are lowering. It can presents TH Heavy Engineering Bhd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil Well Services & Equipment sector.
High dependence on third party suppliers
– TH Heavy Engineering 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. TH Heavy Engineering Bhd needs to understand the core reasons impacting the Oil Well Services & Equipment industry. This will help it in building a better workplace.
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.
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 TH Heavy Engineering Bhd business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, TH Heavy Engineering 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 Oil Well Services & Equipment sector.
Consumer confidence and its impact on TH Heavy Engineering Bhd 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 Oil Well Services & Equipment industry and other sectors.
Weighted SWOT Analysis of TH Heavy Engineering Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at TH Heavy Engineering 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 TH Heavy Engineering 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 TH Heavy Engineering 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 TH Heavy Engineering 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 TH Heavy Engineering Bhd needs to make to build a sustainable competitive advantage.
