Chip Eng Seng Corporation Ltd (CESE) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chip Eng Seng Corporation Ltd (Singapore)
Based on various researches at Oak Spring University , Chip Eng Seng Corporation Ltd is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Chip Eng Seng Corporation Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chip Eng Seng Corporation Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chip Eng Seng Corporation Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd can be done for the following purposes –
1. Strategic planning of Chip Eng Seng Corporation Ltd
2. Improving business portfolio management of Chip Eng Seng Corporation Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chip Eng Seng Corporation Ltd
Strengths of Chip Eng Seng Corporation Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chip Eng Seng Corporation Ltd are -
High switching costs
– The high switching costs that Chip Eng Seng Corporation Ltd 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.
High brand equity
– Chip Eng Seng Corporation Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chip Eng Seng Corporation Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chip Eng Seng Corporation Ltd emphasize – knowledge, initiative, and innovation.
Ability to lead change in Construction Services
– Chip Eng Seng Corporation Ltd is one of the leading players in the Construction Services industry in Singapore. Over the years it has not only transformed the business landscape in the Construction Services industry in Singapore but also across the existing markets. The ability to lead change has enabled Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd in the Capital Goods sector have low bargaining power. Chip Eng Seng Corporation Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chip Eng Seng Corporation Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Chip Eng Seng Corporation Ltd 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.
Diverse revenue streams
– Chip Eng Seng Corporation Ltd is present in almost all the verticals within the Construction Services industry. This has provided Chip Eng Seng Corporation Ltd 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Chip Eng Seng Corporation Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chip Eng Seng Corporation Ltd 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.
Training and development
– Chip Eng Seng Corporation Ltd has one of the best training and development program in Capital Goods 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.
Effective Research and Development (R&D)
– Chip Eng Seng Corporation Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chip Eng Seng Corporation Ltd staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Chip Eng Seng Corporation Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chip Eng Seng Corporation Ltd 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.
Analytics focus
– Chip Eng Seng Corporation Ltd 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 Construction Services industry. The technology infrastructure of Singapore 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.
Weaknesses of Chip Eng Seng Corporation Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chip Eng Seng Corporation Ltd are -
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in Singapore, Chip Eng Seng Corporation Ltd 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 Construction Services industry.
Slow decision making process
– As mentioned earlier in the report, Chip Eng Seng Corporation Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Chip Eng Seng Corporation Ltd 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.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Chip Eng Seng Corporation Ltd 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chip Eng Seng Corporation Ltd is slow explore the new channels of communication. These new channels of communication can help Chip Eng Seng Corporation Ltd to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Chip Eng Seng Corporation Ltd 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.
High cash cycle compare to competitors
Chip Eng Seng Corporation Ltd has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Chip Eng Seng Corporation Ltd is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Chip Eng Seng Corporation Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chip Eng Seng Corporation Ltd to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Chip Eng Seng Corporation Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Chip Eng Seng Corporation Ltd can leverage the sales team experience to cultivate customer relationships as Chip Eng Seng Corporation Ltd is planning to shift buying processes online.
Lack of clear differentiation of Chip Eng Seng Corporation Ltd products
– To increase the profitability and margins on the products, Chip Eng Seng Corporation Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Chip Eng Seng Corporation Ltd 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.
No frontier risks strategy
– From the 10K / annual statement of Chip Eng Seng Corporation Ltd, it seems that company is thinking out the frontier risks that can impact Construction Services 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.
Chip Eng Seng Corporation Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chip Eng Seng Corporation Ltd 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. Chip Eng Seng Corporation Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Chip Eng Seng Corporation Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chip Eng Seng Corporation Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Chip Eng Seng Corporation Ltd can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Buying journey improvements
– Chip Eng Seng Corporation Ltd can improve the customer journey of consumers in the Construction Services 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chip Eng Seng Corporation Ltd 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. Chip Eng Seng Corporation Ltd 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.
Using analytics as competitive advantage
– Chip Eng Seng Corporation Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Chip Eng Seng Corporation Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chip Eng Seng Corporation Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Chip Eng Seng Corporation Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Chip Eng Seng Corporation Ltd can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Construction Services industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chip Eng Seng Corporation Ltd is facing challenges because of the dominance of functional experts in the organization. Chip Eng Seng Corporation Ltd can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chip Eng Seng Corporation Ltd 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd to hire the very best people irrespective of their geographical location.
Threats Chip Eng Seng Corporation Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chip Eng Seng Corporation Ltd are -
Consumer confidence and its impact on Chip Eng Seng Corporation Ltd 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 Construction Services industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd prominent markets.
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 Chip Eng Seng Corporation Ltd.
Environmental challenges
– Chip Eng Seng Corporation Ltd 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. Chip Eng Seng Corporation Ltd can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
Regulatory challenges
– Chip Eng Seng Corporation Ltd 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 Construction Services industry regulations.
Stagnating economy with rate increase
– Chip Eng Seng Corporation Ltd 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 Construction Services industry.
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 Chip Eng Seng Corporation Ltd in the Construction Services sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chip Eng Seng Corporation Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
Increasing wage structure of Chip Eng Seng Corporation Ltd
– 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 Chip Eng Seng Corporation Ltd.
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. Chip Eng Seng Corporation Ltd needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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. Chip Eng Seng Corporation Ltd 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.
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 Chip Eng Seng Corporation Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chip Eng Seng Corporation Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Chip Eng Seng Corporation Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd 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 Chip Eng Seng Corporation Ltd needs to make to build a sustainable competitive advantage.