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 – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
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.
Analytics focus
– PT Indofood Sukses Makmur TBK 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.
Low bargaining power of suppliers
– Suppliers of PT Indofood Sukses Makmur TBK in the sector have low bargaining power. PT Indofood Sukses Makmur TBK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PT Indofood Sukses Makmur TBK to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Strong track record of project management in the industry
– PT Indofood Sukses Makmur TBK is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Training and development
– PT Indofood Sukses Makmur TBK 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.
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 -
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.
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.
Compensation and incentives
– The revenue per employee of PT Indofood Sukses Makmur TBK is just above the 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 operating costs
– Compare to the competitors, PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK lucrative customers.
Slow to strategic competitive environment developments
– As PT Indofood Sukses Makmur TBK is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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.
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.
No frontier risks strategy
– From the 10K / annual statement of PT Indofood Sukses Makmur TBK, it seems that company is thinking out the frontier risks that can impact 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.
Aligning sales with marketing
– From the outside it seems that PT Indofood Sukses Makmur TBK needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at PT Indofood Sukses Makmur TBK can leverage the sales team experience to cultivate customer relationships as PT Indofood Sukses Makmur TBK is planning to shift buying processes online.
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 -
Manufacturing automation
– PT Indofood Sukses Makmur TBK 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects PT Indofood Sukses Makmur TBK can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PT Indofood Sukses Makmur TBK can use these opportunities to build new business models that can help the communities that PT Indofood Sukses Makmur TBK operates in. Secondly it can use opportunities from government spending in sector.
Using analytics as competitive advantage
– PT Indofood Sukses Makmur TBK has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled PT Indofood Sukses Makmur TBK to build a competitive advantage using analytics. The analytics driven competitive advantage can help PT Indofood Sukses Makmur TBK to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, 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.
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.
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.
Building a culture of innovation
– managers at PT Indofood Sukses Makmur TBK 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.
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 -
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, PT Indofood Sukses Makmur TBK 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 PT Indofood Sukses Makmur TBK prominent markets.
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.
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.
Technology acceleration in Forth Industrial Revolution
– PT Indofood Sukses Makmur TBK has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, PT Indofood Sukses Makmur TBK needs to keep up with the evolution of technology in the 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.
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.
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.
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. PT Indofood Sukses Makmur TBK can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.