PT Indofood Sukses Makmur TBK (PIFMY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for PT Indofood Sukses Makmur TBK (United States)
Based on various researches at Oak Spring University , PT Indofood Sukses Makmur TBK is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of PT Indofood Sukses Makmur TBK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PT Indofood Sukses Makmur TBK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PT Indofood Sukses Makmur TBK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK can be done for the following purposes –
1. Strategic planning of PT Indofood Sukses Makmur TBK
2. Improving business portfolio management of PT Indofood Sukses Makmur TBK
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 PT Indofood Sukses Makmur TBK
Strengths of PT Indofood Sukses Makmur TBK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PT Indofood Sukses Makmur TBK are -
Ability to lead change in
– PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– PT Indofood Sukses Makmur TBK is present in almost all the verticals within the industry. This has provided PT Indofood Sukses Makmur TBK 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.
Ability to recruit top talent
– PT Indofood Sukses Makmur TBK is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in industry
– PT Indofood Sukses Makmur TBK has clearly differentiated products in the market place. This has enabled PT Indofood Sukses Makmur TBK to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped PT Indofood Sukses Makmur TBK to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– PT Indofood Sukses Makmur TBK has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PT Indofood Sukses Makmur TBK 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.
Cross disciplinary teams
– Horizontal connected teams at the PT Indofood Sukses Makmur TBK 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.
Learning organization
- PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PT Indofood Sukses Makmur TBK emphasize – knowledge, initiative, and innovation.
Digital Transformation in industry
- digital transformation varies from industry to industry. For PT Indofood Sukses Makmur TBK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. PT Indofood Sukses Makmur TBK has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that PT Indofood Sukses Makmur TBK 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.
Operational resilience
– The operational resilience strategy of PT Indofood Sukses Makmur TBK comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of PT Indofood Sukses Makmur TBK
– The covid-19 pandemic has put organizational resilience at the centre of everthing PT Indofood Sukses Makmur TBK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– PT Indofood Sukses Makmur TBK has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PT Indofood Sukses Makmur TBK to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of PT Indofood Sukses Makmur TBK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PT Indofood Sukses Makmur TBK are -
Interest costs
– Compare to the competition, PT Indofood Sukses Makmur TBK 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.
Low market penetration in new markets
– Outside its home market of United States, PT Indofood Sukses Makmur TBK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, PT Indofood Sukses Makmur TBK has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. PT Indofood Sukses Makmur TBK 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 industry
– The stress on hiring functional specialists at PT Indofood Sukses Makmur TBK 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.
High cash cycle compare to competitors
PT Indofood Sukses Makmur TBK 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.
High dependence on PT Indofood Sukses Makmur TBK ‘s star products
– The top 2 products and services of PT Indofood Sukses Makmur TBK still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though PT Indofood Sukses Makmur TBK has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, PT Indofood Sukses Makmur TBK is slow explore the new channels of communication. These new channels of communication can help PT Indofood Sukses Makmur TBK to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of PT Indofood Sukses Makmur TBK products
– To increase the profitability and margins on the products, PT Indofood Sukses Makmur TBK needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though PT Indofood Sukses Makmur TBK has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. PT Indofood Sukses Makmur TBK should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the industry, PT Indofood Sukses Makmur TBK 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.
Increasing silos among functional specialists
– The organizational structure of PT Indofood Sukses Makmur TBK is dominated by functional specialists. It is not different from other players in the industry, but PT Indofood Sukses Makmur TBK needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PT Indofood Sukses Makmur TBK to focus more on services in the industry rather than just following the product oriented approach.
PT Indofood Sukses Makmur TBK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PT Indofood Sukses Makmur TBK 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. PT Indofood Sukses Makmur TBK can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for PT Indofood Sukses Makmur TBK 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, PT Indofood Sukses Makmur TBK is facing challenges because of the dominance of functional experts in the organization. PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK 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.
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. PT Indofood Sukses Makmur TBK 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. PT Indofood Sukses Makmur TBK 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, PT Indofood Sukses Makmur TBK 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of PT Indofood Sukses Makmur TBK has opened avenues for new revenue streams for the organization in industry. This can help PT Indofood Sukses Makmur TBK to build a more holistic ecosystem for PT Indofood Sukses Makmur TBK products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– PT Indofood Sukses Makmur TBK 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.
Loyalty marketing
– PT Indofood Sukses Makmur TBK 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.
Leveraging digital technologies
– PT Indofood Sukses Makmur TBK 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.
Better consumer reach
– The expansion of the 5G network will help PT Indofood Sukses Makmur TBK to increase its market reach. PT Indofood Sukses Makmur TBK 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.
Threats PT Indofood Sukses Makmur TBK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PT Indofood Sukses Makmur TBK are -
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 PT Indofood Sukses Makmur TBK business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that PT Indofood Sukses Makmur TBK is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on PT Indofood Sukses Makmur TBK 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.
High dependence on third party suppliers
– PT Indofood Sukses Makmur TBK 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for PT Indofood Sukses Makmur TBK 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, PT Indofood Sukses Makmur TBK may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Stagnating economy with rate increase
– PT Indofood Sukses Makmur TBK 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents PT Indofood Sukses Makmur TBK with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 PT Indofood Sukses Makmur TBK in the sector and impact the bottomline of the organization.
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. PT Indofood Sukses Makmur TBK 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.
Increasing wage structure of PT Indofood Sukses Makmur TBK
– 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 PT Indofood Sukses Makmur TBK.
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. PT Indofood Sukses Makmur TBK needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Weighted SWOT Analysis of PT Indofood Sukses Makmur TBK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK needs to make to build a sustainable competitive advantage.