SWOT Analysis / TOWS Matrix for Kencana Agri Ltd (Singapore)
Based on various researches at Oak Spring University , Kencana Agri Ltd is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing commodity prices, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing energy prices, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kencana Agri Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kencana Agri Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kencana Agri 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 Kencana Agri Ltd can be done for the following purposes –
1. Strategic planning of Kencana Agri Ltd
2. Improving business portfolio management of Kencana Agri Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kencana Agri Ltd
Strengths of Kencana Agri Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kencana Agri Ltd are -
High switching costs
– The high switching costs that Kencana Agri 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.
Innovation driven organization
– Kencana Agri Ltd is one of the most innovative firm in Forestry & Wood Products sector.
Ability to lead change in Forestry & Wood Products
– Kencana Agri Ltd is one of the leading players in the Forestry & Wood Products industry in Singapore. Over the years it has not only transformed the business landscape in the Forestry & Wood Products industry in Singapore but also across the existing markets. The ability to lead change has enabled Kencana Agri Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Kencana Agri 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 Kencana Agri Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kencana Agri Ltd emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Kencana Agri Ltd is one of the leading players in the Forestry & Wood Products industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Kencana Agri Ltd 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.
Effective Research and Development (R&D)
– Kencana Agri Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kencana Agri Ltd 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.
Diverse revenue streams
– Kencana Agri Ltd is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Kencana Agri 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.
High brand equity
– Kencana Agri Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kencana Agri Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Forestry & Wood Products industry
– Kencana Agri Ltd has clearly differentiated products in the market place. This has enabled Kencana Agri Ltd to fetch slight price premium compare to the competitors in the Forestry & Wood Products industry. The sustainable margins have also helped Kencana Agri Ltd to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Kencana Agri Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kencana Agri 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.
Highly skilled collaborators
– Kencana Agri Ltd 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 Kencana Agri Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Kencana Agri Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kencana Agri Ltd are -
Aligning sales with marketing
– From the outside it seems that Kencana Agri Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Forestry & Wood Products industry have deep experience in developing customer relationships. Marketing department at Kencana Agri Ltd can leverage the sales team experience to cultivate customer relationships as Kencana Agri Ltd is planning to shift buying processes online.
Interest costs
– Compare to the competition, Kencana Agri Ltd 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.
Capital Spending Reduction
– Even during the low interest decade, Kencana Agri Ltd 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
– Kencana Agri 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.
Compensation and incentives
– The revenue per employee of Kencana Agri Ltd 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.
High dependence on Kencana Agri Ltd ‘s star products
– The top 2 products and services of Kencana Agri Ltd 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 Kencana Agri Ltd has relatively successful track record of launching new products.
Products dominated business model
– Even though Kencana Agri Ltd 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. Kencana Agri Ltd should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Forestry & Wood Products industry
– The stress on hiring functional specialists at Kencana Agri 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.
Lack of clear differentiation of Kencana Agri Ltd products
– To increase the profitability and margins on the products, Kencana Agri Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Kencana Agri Ltd 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.
High operating costs
– Compare to the competitors, Kencana Agri Ltd has high operating costs in the Forestry & Wood Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kencana Agri Ltd lucrative customers.
Kencana Agri Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kencana Agri Ltd are -
Leveraging digital technologies
– Kencana Agri Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kencana Agri Ltd 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, Kencana Agri Ltd can use these opportunities to build new business models that can help the communities that Kencana Agri Ltd 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, Kencana Agri 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kencana Agri Ltd is facing challenges because of the dominance of functional experts in the organization. Kencana Agri Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Kencana Agri Ltd to increase its market reach. Kencana Agri Ltd 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.
Developing new processes and practices
– Kencana Agri Ltd can develop new processes and procedures in Forestry & Wood Products industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Kencana Agri Ltd has opened avenues for new revenue streams for the organization in Forestry & Wood Products industry. This can help Kencana Agri Ltd to build a more holistic ecosystem for Kencana Agri Ltd products in the Forestry & Wood Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kencana Agri 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 Kencana Agri Ltd to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kencana Agri 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 Kencana Agri 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.
Buying journey improvements
– Kencana Agri Ltd can improve the customer journey of consumers in the Forestry & Wood Products 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.
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. Kencana Agri Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Kencana Agri Ltd 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.
Threats Kencana Agri Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kencana Agri Ltd are -
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.
Consumer confidence and its impact on Kencana Agri 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 Forestry & Wood Products industry and other sectors.
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 Kencana Agri Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kencana Agri 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 Kencana Agri Ltd prominent markets.
Stagnating economy with rate increase
– Kencana Agri 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 Forestry & Wood Products industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kencana Agri Ltd 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.
Technology acceleration in Forth Industrial Revolution
– Kencana Agri Ltd has witnessed rapid integration of technology during Covid-19 in the Forestry & Wood Products industry. As one of the leading players in the industry, Kencana Agri Ltd needs to keep up with the evolution of technology in the Forestry & Wood Products 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.
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 Kencana Agri Ltd.
Environmental challenges
– Kencana Agri 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. Kencana Agri Ltd can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
Increasing wage structure of Kencana Agri 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 Kencana Agri Ltd.
High dependence on third party suppliers
– Kencana Agri Ltd 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. Kencana Agri Ltd needs to understand the core reasons impacting the Forestry & Wood Products industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kencana Agri 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 Forestry & Wood Products sector.
Weighted SWOT Analysis of Kencana Agri Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kencana Agri 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 Kencana Agri 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 Kencana Agri 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 Kencana Agri 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 Kencana Agri Ltd needs to make to build a sustainable competitive advantage.