Based on various researches at Oak Spring University , Jardine Matheson Holdings Ltd PK is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing transportation and logistics costs, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Jardine Matheson Holdings Ltd PK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jardine Matheson Holdings Ltd PK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jardine Matheson Holdings Ltd PK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK can be done for the following purposes –
1. Strategic planning of Jardine Matheson Holdings Ltd PK
2. Improving business portfolio management of Jardine Matheson Holdings Ltd PK
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jardine Matheson Holdings Ltd PK
Strengths of Jardine Matheson Holdings Ltd PK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jardine Matheson Holdings Ltd PK are -
Ability to lead change in
– Jardine Matheson Holdings Ltd PK is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Jardine Matheson Holdings Ltd PK in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Jardine Matheson Holdings Ltd PK 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.
Organizational Resilience of Jardine Matheson Holdings Ltd PK
– The covid-19 pandemic has put organizational resilience at the centre of everthing Jardine Matheson Holdings Ltd PK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Jardine Matheson Holdings Ltd PK has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jardine Matheson Holdings Ltd PK 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.
Training and development
– Jardine Matheson Holdings Ltd PK has one of the best training and development program in 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.
Learning organization
- Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jardine Matheson Holdings Ltd PK emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Jardine Matheson Holdings Ltd PK 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.
Analytics focus
– Jardine Matheson Holdings Ltd PK 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 industry. The technology infrastructure of United States 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Jardine Matheson Holdings Ltd PK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jardine Matheson Holdings Ltd PK 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.
Effective Research and Development (R&D)
– Jardine Matheson Holdings Ltd PK has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Jardine Matheson Holdings Ltd PK staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Jardine Matheson Holdings Ltd PK in the sector have low bargaining power. Jardine Matheson Holdings Ltd PK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jardine Matheson Holdings Ltd PK to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Jardine Matheson Holdings Ltd PK has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Jardine Matheson Holdings Ltd PK have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Jardine Matheson Holdings Ltd PK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jardine Matheson Holdings Ltd PK are -
Skills based hiring in industry
– The stress on hiring functional specialists at Jardine Matheson Holdings Ltd PK 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.
Workers concerns about automation
– As automation is fast increasing in the industry, Jardine Matheson Holdings Ltd PK 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.
Ability to respond to the competition
– As the decision making is very deliberative at Jardine Matheson Holdings Ltd PK, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Jardine Matheson Holdings Ltd PK has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Jardine Matheson Holdings Ltd PK strategy
– From the outside it seems that the employees of Jardine Matheson Holdings Ltd PK don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Jardine Matheson Holdings Ltd PK 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 operating costs
– Compare to the competitors, Jardine Matheson Holdings Ltd PK has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Jardine Matheson Holdings Ltd PK lucrative customers.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Jardine Matheson Holdings Ltd PK 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 industry.
Low market penetration in new markets
– Outside its home market of United States, Jardine Matheson Holdings Ltd PK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Jardine Matheson Holdings Ltd PK 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 industry using digital technology.
High cash cycle compare to competitors
Jardine Matheson Holdings Ltd PK has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jardine Matheson Holdings Ltd PK is slow explore the new channels of communication. These new channels of communication can help Jardine Matheson Holdings Ltd PK to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Jardine Matheson Holdings Ltd PK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jardine Matheson Holdings Ltd PK are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jardine Matheson Holdings Ltd PK can use these opportunities to build new business models that can help the communities that Jardine Matheson Holdings Ltd PK operates in. Secondly it can use opportunities from government spending in sector.
Manufacturing automation
– Jardine Matheson Holdings Ltd PK can use the latest technology developments to improve its manufacturing and designing process in 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jardine Matheson Holdings Ltd PK 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. Jardine Matheson Holdings Ltd PK 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 industry, but it has also influenced the consumer preferences. Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK 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 industry.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jardine Matheson Holdings Ltd PK in the industry. Now Jardine Matheson Holdings Ltd PK can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Jardine Matheson Holdings Ltd PK to increase its market reach. Jardine Matheson Holdings Ltd PK 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jardine Matheson Holdings Ltd PK 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.
Developing new processes and practices
– Jardine Matheson Holdings Ltd PK can develop new processes and procedures in 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 Jardine Matheson Holdings Ltd PK has opened avenues for new revenue streams for the organization in industry. This can help Jardine Matheson Holdings Ltd PK to build a more holistic ecosystem for Jardine Matheson Holdings Ltd PK products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jardine Matheson Holdings Ltd PK in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jardine Matheson Holdings Ltd PK is facing challenges because of the dominance of functional experts in the organization. Jardine Matheson Holdings Ltd PK can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 Jardine Matheson Holdings Ltd PK 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.
Threats Jardine Matheson Holdings Ltd PK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jardine Matheson Holdings Ltd PK are -
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 Jardine Matheson Holdings Ltd PK.
Regulatory challenges
– Jardine Matheson Holdings Ltd PK 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 industry regulations.
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 Jardine Matheson Holdings Ltd PK business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jardine Matheson Holdings Ltd PK in industry. The 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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jardine Matheson Holdings Ltd PK can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Jardine Matheson Holdings Ltd PK 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 industry.
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. Jardine Matheson Holdings Ltd PK needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Environmental challenges
– Jardine Matheson Holdings Ltd PK 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. Jardine Matheson Holdings Ltd PK can take advantage of this fund but it will also bring new competitors in the industry.
Consumer confidence and its impact on Jardine Matheson Holdings Ltd PK 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 industry and other sectors.
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. Jardine Matheson Holdings Ltd PK 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.
Shortening product life cycle
– it is one of the major threat that Jardine Matheson Holdings Ltd PK is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Jardine Matheson Holdings Ltd PK in the sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Jardine Matheson Holdings Ltd PK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK 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 Jardine Matheson Holdings Ltd PK needs to make to build a sustainable competitive advantage.