4.

0 Analysis

4.1 SWOT Analysis

SWOT analysis is a useful tool to help an organization to analyze all the current

and future internal and external factors that will affect its operation and prospects.

It visualizes a framework used to evaluate an organization’s competitive position,

subsequently leading to better strategic planning and development. The internal

factors that will directly affect an organization’s operation and development are

shown in the strengths and weaknesses parts. The strengths part will list down

what an organization is excellent at and where they have a competitive advantage

compared to its competitors. Meanwhile, the weaknesses part describes the factors

that directly prevent an organization from operating at its optimum capacity. It

also indicates the area that an organization should improve in order to remain

competitive in the industry. On the other hand, the opportunities and threats

represent the factors that an organization has no control but will influence its

performance. The opportunities refer to the favorable external factors that can

allow an organization to develop into its competitive advantage. On the other side,

threats show any external factor that will interrupt or damage an organization’s

operation or development.

In the case of Proton Holdings Berhad, we have developed a SWOT analysis that

consists of all four internal and external factors that will affect the company’s

performance. The SWOT analysis diagram is shown as below:

Strengths Weaknesses

1. Strong Brand Name 1. Less Variety in Product

2. Worldwide Distribution Network Portfolio

3. Strong Partnerships Network 2. Less Exposure in Global

4. Strong Government Support Market

5. Long-standing Expert in Automotive 3. Product’s Quality Issue

Industry 4. Over dependence on Local

Market

Opportunities Threats

1. High Car Tariff 1. Slow Economic Growth

2. Foreign Trade Agreement 2. Political Instability

3. Rising Electric Vehicles Demand 3. Covid-19 Pandemic

4. Industrial Revolution 4.0 4. Existing Rivalry

5. Threat of Substitutes

6. Slow Population Growth

Diagram X: SWOT Analysis of Proton Holdings Berhad

We added some descriptions of the internal factors that affect Proton Holdings Berhad’s

business performance as below:

Internal Factors Descriptions

Proton has a strong brand name in Malaysia because

Strong Brand Name it is the first national automobile manufacturer in the

country.
Proton has based itself in foreign countries such as
Worldwide
United Kingdom, Australia, China, ASEAN countries
Distribution
and so on. The company has established a worldwide
Network
distribution network for its future growth.

Proton has established strong partnership with

various strong automobile brands such as Mitsubishi,

Citroen, Youngman, Honda, Suzuki, and Geely. The

Strengths Strong Partnerships
company also connected with Lotus, a world-famous
Network
supercar brand. Therefore, the company can easily

access to latest technology via it’s strong partnership

network.
Proton is DRB-HICOM which has huge interest with
Strong Government
government of Malaysia. Therefore, Proton has
Support
strong government support in its operation.
Proton is an automotive company in Malaysia that
Long-standing
has manufacturing car for more than 35 years. As a
Expert in
long-standing automotive company in the industry,
Automotive Industry
Proton has vast experience in this field.
Weaknesses Less Variety in Although majority of Proton cars are budget friendly,
 but the company don’t have many car models.

Currently, the company only producing 7 types of car

Product Portfolio models which are Proton Saga, Proton Persona,

Proton Perdana, Proton Exora, Proton Iriz, Proton

X70, and Proton X50.

Although Proton is working hard in expanding its

business operation to international level, but the

Less Exposure in
company’s brand name is still not very famous in
Global Market
international level. The company also not having

strong market share in international market.

In Proton’s history, the company has faced quality

issue in the car it produced. For example, the

Product Quality company recalled all the Proton Perdana model

Issue produced from 2012 to 2018 due to the airbags issue.

The product quality issues for sure have damaged the

company’s reputation.
Proton main revenue stream comes from Malaysia

local market. If the company wants to expand its

Over Dependence on
grow bigger, it must reduce its reliance to the local
Local Market
market and try to expand its sales in international

market.

Alongside internal factors, we also added some description of the eternal factors that

affect Proton Holdings Berhad’s business performance below:

 External Factors Descriptions
Opportunitie Malaysia government has charged high tariff on

s High Import Car Tax import cars to protect the local car brand. It makes

foreign car hard to penetrated the local car market.

IR 4.0 give an opportunity to Proton to improve its

operation efficiency. New manufacturing concept

such as smart factory is rising. If the company

Industrial
successfully adopt full automatic manufacturing in
Revolution 4.0
its car manufacturing factory, the company will

sure be able to reduce its reliance on man power,

and subsequently reduce its cost structure.

Competition among car manufacturers has

accelerated the development of electric vehicles. As

the world is facing scarcity in non-renewable

energy resources, the world’s transition from petrol

vehicles into electric vehicles is an inevitable trend.

Rising Electric Based on the data from Deloitte analysis (2020),

Vehicles Demand electric vehicles’ sales in 2019 surpassed two

million vehicles. Electric vehicles are expected to

secure 11.2 million vehicles sales in 2025 and 31.1

million vehicles sales in the year 2030 (around 32%

of total global new car sales in that year). (Deloitte,

2020)
Foreign Trade Malaysia has been a long time World Trade

Agreement Organization member and also have signed

 different trade agreements with countries around

the world. For example, ASEAN Free Trade

Agreement (AFTA), The Trans-Pacific Partnership

Agreement (TPPA), and the Regional

Comprehensive Economic Partnership (RCEP). The

trade agreements signed by Malaysia government

helps Proton to expand its business to international

level easier.
Threats The global economy is facing downturn in year

2020 due to the unexpected global pandemic of

Slow Economic
Covid-19. In Malaysia, the same situation happened
Growth
as the slow economic growth has affected all the

business organization in Malaysia.

The unstable political situations in both

Political Instability international and Malaysia have increased Proton’s

difficulties in performing its business operation.

Covid-19 pandemic has affected the operation of

Covid-19 Pandemic Proton in year 2020. The uncertainty caused by

Covid-19 will keep affecting the company

Proton is facing the competition posted by both

local and international car manufacturer brands. For

local brand, Perodua is the main competitor to

Existing Rivalry
Proton. Besides, Japanese car manufacturer such as

Toyota, Honda, and Mazda are also competing with

Proton.
Threat of Substitutes There are various substitutes products and services
 for Proton car. For example, the motorcycles, taxis

and GrabCar, and public transport (buses, LRT,

RapidKL) are all products and services that can

replace Proton product’s fuction

Slow population growth is a threat to Proton

because the company main business is to sell

Slow Population
transportation to people. If population drops down,
Growth
the overall demand to vehicles will also drop.

Subsequently, the demand to Proton’s car will drop

4.2 TOWS Matrix

TOWS Matrix is a business strategic development framework developed by Heinz

Weirich in 1982 (Chowdhury, O., 2019). It can be interpreted as a modified

version of SWOT analysis, whereby the TOWS Matrix can further assess and

compare every single factor that will directly or indirectly affect an organization's

operation and development, subsequently helping the organization create its

unique business strategies. In the TOWS Matrix, the four main strategy

development concepts will be:

1. Utilize business strengths to exploit new business opportunities.

2. Utilize business strengths to mitigate business threats.

3. Minimize business weaknesses and turn them into a business strength to

ensure the business can exploit future opportunities.

4. Minimize business weaknesses to avoid the threats that might harm the

business.
 In the TOWS Matrix below, we will show you the suggested business strategies

that can be implemented by Petronas Gas Berhad in order to achieve the

objectives which we mentioned in the previous part of this chapter.

Strengths Weaknesses

1. Strong Brand Name 1. Less Variety in

2. Worldwide Distribution Product Portfolio

Network 2. Less Exposure in

3. Strong Partnerships Network Global Market

4. Strong Government Support 3. Product’s Quality

5. Long-standing Expert in Issue

Automotive Industry 4. Over dependence on

Local Market

Opportunities SO Strategies WO Strategies

1. High Car Tariff 1. Implement data driven 1. Aggressive

2. Foreign Trade management in business promotional activities in

Agreement operation. (S4, S5, O4) foreign market. (W2, W4,

3. Rising Electric 2. Increase promotional O2)

Vehicles Demand activities in local market. (S1, 2. More R&D activities

4. Industrial S4, S5, O1) to improve product

Revolution 4.0 3. Expand business operation in quality. (W1, W3, O3,

other ASEAN countries. (S1, S2, O4)

S3, O2)
 4. Cooperate with other car

brands in sharing technology

regarding electric cars. (S1, S3,

S4, S5, O3, O4)

Threats ST Strategies WT Strategies

1. Slow Economic 1. Form joint venture with 1. Develop new budget

Growth foreign car brand in new foreign car product line. (W1, T1,

2. Political market. (S2, S3, T1, T2, T4, T6) T3, T4, T5)

Instability 2. Rearrange product 2. Lower down car

3. Covid-19 distribution in foreign country. prices to match with local

Pandemic (S2, S3, T1, T2, T3, T6) customer’s purchasing

4. Existing Rivalry power. (W4, T1, T3, T4,

5. Threat of T5)

Substitutes

6. Slow Population

Growth

Reference
Chowdhury, O. (2019, December 4). What is TOWS Matrix? And how it is used.
Retrieved 5 December, 2020, from https://tradebrains.in/tows-
matrix/#:~:text=TOWS%20Matrix%20can%20be%20interpreted,%2C
%20Opportunities%2C%20Weaknesses%2C%20Strength.
Woodward, M., Walton, B., & Hamilton, J. (2020, July 28). Retrieved November 13,
2020 from Deloitte: https://www2.deloitte.com/uk/en/insights/focus/future-
of-mobility/electric-vehicle-trends-2030.html