NWP Bhd (NWPH) SWOT Analysis / TOWS Matrix / MBA Resources
Forestry & Wood Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for NWP Bhd (Malaysia)
Based on various researches at Oak Spring University , NWP Bhd is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
technology disruption, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NWP Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NWP Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NWP 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 NWP Bhd can be done for the following purposes –
1. Strategic planning of NWP Bhd
2. Improving business portfolio management of NWP 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 NWP Bhd
Strengths of NWP Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NWP Bhd are -
Learning organization
- NWP 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 NWP Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NWP Bhd emphasize – knowledge, initiative, and innovation.
Ability to lead change in Forestry & Wood Products
– NWP Bhd is one of the leading players in the Forestry & Wood Products industry in Malaysia. Over the years it has not only transformed the business landscape in the Forestry & Wood Products industry in Malaysia but also across the existing markets. The ability to lead change has enabled NWP Bhd 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 NWP Bhd in the Basic Materials sector have low bargaining power. NWP Bhd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NWP Bhd to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that NWP 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.
Digital Transformation in Forestry & Wood Products industry
- digital transformation varies from industry to industry. For NWP Bhd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NWP 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.
Innovation driven organization
– NWP Bhd is one of the most innovative firm in Forestry & Wood Products sector.
High brand equity
– NWP Bhd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NWP Bhd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Forestry & Wood Products industry
– NWP 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.
Training and development
– NWP Bhd has one of the best training and development program in Basic Materials 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.
Cross disciplinary teams
– Horizontal connected teams at the NWP Bhd are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– NWP 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.
Superior customer experience
– The customer experience strategy of NWP Bhd in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of NWP Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NWP Bhd are -
No frontier risks strategy
– From the 10K / annual statement of NWP 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.
Interest costs
– Compare to the competition, NWP 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.
High bargaining power of channel partners in Forestry & Wood Products industry
– because of the regulatory requirements in Malaysia, NWP 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.
Skills based hiring in Forestry & Wood Products industry
– The stress on hiring functional specialists at NWP 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.
Compensation and incentives
– The revenue per employee of NWP 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.
Products dominated business model
– Even though NWP 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. NWP Bhd should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at NWP Bhd, in the dynamic environment of Forestry & Wood Products industry it has struggled to respond to the nimble upstart competition. NWP Bhd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 NWP Bhd supply chain. Even after few cautionary changes, NWP Bhd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left NWP Bhd vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, NWP 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.
Need for greater diversity
– NWP 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.
High dependence on NWP Bhd ‘s star products
– The top 2 products and services of NWP Bhd still accounts for major business revenue. This dependence on star products in Forestry & Wood Products industry has resulted into insufficient focus on developing new products, even though NWP Bhd has relatively successful track record of launching new products.
NWP Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NWP Bhd are -
Creating value in data economy
– The success of analytics program of NWP Bhd has opened avenues for new revenue streams for the organization in Forestry & Wood Products industry. This can help NWP Bhd to build a more holistic ecosystem for NWP Bhd products in the Forestry & Wood Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NWP 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 NWP 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.
Loyalty marketing
– NWP 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.
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 NWP 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, NWP Bhd is facing challenges because of the dominance of functional experts in the organization. NWP Bhd can utilize new technology in the field of Forestry & Wood Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– NWP 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 NWP Bhd to build a competitive advantage using analytics. The analytics driven competitive advantage can help NWP Bhd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, NWP 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.
Leveraging digital technologies
– NWP 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.
Use of Bitcoin and other crypto currencies for transactions in Forestry & Wood Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for NWP Bhd in the Forestry & Wood Products industry. Now NWP Bhd can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Forestry & Wood Products industry, but it has also influenced the consumer preferences. NWP Bhd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NWP 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NWP 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 NWP Bhd to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NWP Bhd can use these opportunities to build new business models that can help the communities that NWP Bhd operates in. Secondly it can use opportunities from government spending in Forestry & Wood Products sector.
Threats NWP Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NWP Bhd are -
Consumer confidence and its impact on NWP 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 Forestry & Wood Products industry and other sectors.
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 NWP Bhd in the Forestry & Wood Products sector and impact the bottomline of the organization.
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 NWP Bhd.
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. NWP Bhd needs to understand the core reasons impacting the Forestry & Wood Products industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– NWP 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NWP 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for NWP Bhd in Forestry & Wood Products industry. The Forestry & Wood Products 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.
Shortening product life cycle
– it is one of the major threat that NWP Bhd is facing in Forestry & Wood Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. NWP Bhd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– NWP 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. NWP Bhd can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
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. NWP Bhd will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Weighted SWOT Analysis of NWP Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NWP 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 NWP 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 NWP 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 NWP 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 NWP Bhd needs to make to build a sustainable competitive advantage.