Based on various researches at Oak Spring University , PT XL Axiata Tbk ADR is operating in a macro-environment that has been destablized by – geopolitical disruptions, wage bills are increasing, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of PT XL Axiata Tbk ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PT XL Axiata Tbk ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PT XL Axiata Tbk ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR can be done for the following purposes –
1. Strategic planning of PT XL Axiata Tbk ADR
2. Improving business portfolio management of PT XL Axiata Tbk ADR
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 XL Axiata Tbk ADR
Strengths of PT XL Axiata Tbk ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PT XL Axiata Tbk ADR are -
Low bargaining power of suppliers
– Suppliers of PT XL Axiata Tbk ADR in the sector have low bargaining power. PT XL Axiata Tbk ADR has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PT XL Axiata Tbk ADR to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– PT XL Axiata Tbk ADR has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PT XL Axiata Tbk ADR 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.
Strong track record of project management in the industry
– PT XL Axiata Tbk ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– PT XL Axiata Tbk ADR 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.
Innovation driven organization
– PT XL Axiata Tbk ADR is one of the most innovative firm in sector.
Operational resilience
– The operational resilience strategy of PT XL Axiata Tbk ADR 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.
Training and development
– PT XL Axiata Tbk ADR 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For PT XL Axiata Tbk ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. PT XL Axiata Tbk ADR 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.
Sustainable margins compare to other players in industry
– PT XL Axiata Tbk ADR has clearly differentiated products in the market place. This has enabled PT XL Axiata Tbk ADR to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped PT XL Axiata Tbk ADR to invest into research and development (R&D) and innovation.
Ability to lead change in
– PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of PT XL Axiata Tbk ADR
– The covid-19 pandemic has put organizational resilience at the centre of everthing PT XL Axiata Tbk ADR does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– PT XL Axiata Tbk ADR is present in almost all the verticals within the industry. This has provided PT XL Axiata Tbk ADR 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.
Weaknesses of PT XL Axiata Tbk ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PT XL Axiata Tbk ADR are -
High dependence on PT XL Axiata Tbk ADR ‘s star products
– The top 2 products and services of PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR lucrative customers.
Skills based hiring in industry
– The stress on hiring functional specialists at PT XL Axiata Tbk ADR 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.
Ability to respond to the competition
– As the decision making is very deliberative at PT XL Axiata Tbk ADR, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. PT XL Axiata Tbk ADR has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the industry, PT XL Axiata Tbk ADR 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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of PT XL Axiata Tbk ADR supply chain. Even after few cautionary changes, PT XL Axiata Tbk ADR is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left PT XL Axiata Tbk ADR vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– PT XL Axiata Tbk ADR 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.
Low market penetration in new markets
– Outside its home market of United States, PT XL Axiata Tbk ADR needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of PT XL Axiata Tbk ADR is dominated by functional specialists. It is not different from other players in the industry, but PT XL Axiata Tbk ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PT XL Axiata Tbk ADR to focus more on services in the industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR can leverage the sales team experience to cultivate customer relationships as PT XL Axiata Tbk ADR is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As PT XL Axiata Tbk ADR 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.
PT XL Axiata Tbk ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PT XL Axiata Tbk ADR are -
Loyalty marketing
– PT XL Axiata Tbk ADR 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.
Using analytics as competitive advantage
– PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR to build a competitive advantage using analytics. The analytics driven competitive advantage can help PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects PT XL Axiata Tbk ADR can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 XL Axiata Tbk ADR 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.
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 XL Axiata Tbk ADR can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for PT XL Axiata Tbk ADR 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.
Buying journey improvements
– PT XL Axiata Tbk ADR can improve the customer journey of consumers in the 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help PT XL Axiata Tbk ADR to increase its market reach. PT XL Axiata Tbk ADR 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.
Creating value in data economy
– The success of analytics program of PT XL Axiata Tbk ADR has opened avenues for new revenue streams for the organization in industry. This can help PT XL Axiata Tbk ADR to build a more holistic ecosystem for PT XL Axiata Tbk ADR products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– PT XL Axiata Tbk ADR 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.
Building a culture of innovation
– managers at PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR business can come under increasing regulations regarding data privacy, data security, etc.
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 PT XL Axiata Tbk ADR.
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 XL Axiata Tbk ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, PT XL Axiata Tbk ADR 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.
High dependence on third party suppliers
– PT XL Axiata Tbk ADR 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.
Consumer confidence and its impact on PT XL Axiata Tbk ADR 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.
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.
Technology acceleration in Forth Industrial Revolution
– PT XL Axiata Tbk ADR has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, PT XL Axiata Tbk ADR 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.
Shortening product life cycle
– it is one of the major threat that PT XL Axiata Tbk ADR is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– PT XL Axiata Tbk ADR 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. PT XL Axiata Tbk ADR can take advantage of this fund but it will also bring new competitors in the industry.
Stagnating economy with rate increase
– PT XL Axiata Tbk ADR 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for PT XL Axiata Tbk ADR 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.
Increasing wage structure of PT XL Axiata Tbk ADR
– 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 XL Axiata Tbk ADR.
Weighted SWOT Analysis of PT XL Axiata Tbk ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR 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 XL Axiata Tbk ADR 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 XL Axiata Tbk ADR 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 XL Axiata Tbk ADR needs to make to build a sustainable competitive advantage.
