Based on various researches at Oak Spring University , PT XL Axiata Tbk ADR is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
geopolitical disruptions, increasing energy prices, 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 -
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.
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.
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.
Superior customer experience
– The customer experience strategy of PT XL Axiata Tbk ADR in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the PT XL Axiata Tbk ADR 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.
High switching costs
– The high switching costs that PT XL Axiata Tbk ADR 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
– PT XL Axiata Tbk ADR 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.
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 -
Slow decision making process
– As mentioned earlier in the report, PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR 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.
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.
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.
Lack of clear differentiation of PT XL Axiata Tbk ADR products
– To increase the profitability and margins on the products, PT XL Axiata Tbk ADR needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though PT XL Axiata Tbk ADR 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 XL Axiata Tbk ADR should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of PT XL Axiata Tbk ADR 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.
No frontier risks strategy
– From the 10K / annual statement of PT XL Axiata Tbk ADR, 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.
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.
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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, PT XL Axiata Tbk ADR is facing challenges because of the dominance of functional experts in the organization. PT XL Axiata Tbk ADR 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.
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.
Manufacturing automation
– PT XL Axiata Tbk ADR 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.
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.
Learning at scale
– Online learning technologies has now opened space for PT XL Axiata Tbk ADR 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.
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 XL Axiata Tbk ADR can use these opportunities to build new business models that can help the communities that PT XL Axiata Tbk ADR operates in. Secondly it can use opportunities from government spending in sector.
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 PT XL Axiata Tbk ADR in the industry. Now PT XL Axiata Tbk ADR can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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 -
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents PT XL Axiata Tbk ADR with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 XL Axiata Tbk ADR needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.