Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis
Describes T.P. Lee, the founder and CEO of Jinwoong, a 19-year-old entrepreneurial company in Korea that has grown to become the world's largest manufacturer of camping tents. Labeled by Fortune as one of the most promising entrepreneurs in Asia in 1993, Lee faces some serious management challenges by October 1998. Largely due to the Korean financial crisis of 1997-98, Lee must rethink the financing and expansion plans for his firm. To deal with these challenges, he could seek outside funding from two different groups of private equity investors or from a corporate restructuring fund set up by the Korean government. All of these decisions reflect Jinwoong's long-term strategy and Lee's assessment of the different offers.
Authors :: Walter Kuemmerle, James Lee, Bokeun Jin
Swot Analysis of "Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis" written by Walter Kuemmerle, James Lee, Bokeun Jin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jinwoong Korean facing as an external strategic factors. Some of the topics covered in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis case study are - Strategic Management Strategies, Emerging markets, Entrepreneurial finance, Financial management, Globalization, Growth strategy, Recession, Reorganization and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis casestudy better are - – cloud computing is disrupting traditional business models, geopolitical disruptions, increasing commodity prices, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jinwoong Korean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jinwoong Korean 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 Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis case study
2. Improving business portfolio management of Jinwoong Korean
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jinwoong Korean
Strengths Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jinwoong Korean in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis Harvard Business Review case study are -
Analytics focus
– Jinwoong Korean 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 suggested by Walter Kuemmerle, James Lee, Bokeun Jin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Jinwoong Korean has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jinwoong Korean to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Jinwoong Korean 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.
Diverse revenue streams
– Jinwoong Korean is present in almost all the verticals within the industry. This has provided firm in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis case study 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.
Cross disciplinary teams
– Horizontal connected teams at the Jinwoong Korean 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.
Highly skilled collaborators
– Jinwoong Korean has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Jinwoong Korean 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 Jinwoong Korean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Jinwoong Korean in the sector have low bargaining power. Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jinwoong Korean to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis firm has clearly differentiated products in the market place. This has enabled Jinwoong Korean to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Jinwoong Korean to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Jinwoong Korean has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Jinwoong Korean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jinwoong Korean 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.
Ability to lead change in Finance & Accounting field
– Jinwoong Korean is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Jinwoong Korean in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis are -
Workers concerns about automation
– As automation is fast increasing in the segment, Jinwoong Korean 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 operating costs
– Compare to the competitors, firm in the HBR case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Jinwoong Korean 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Jinwoong Korean 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.
Low market penetration in new markets
– Outside its home market of Jinwoong Korean, firm in the HBR case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Jinwoong Korean is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Jinwoong Korean needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jinwoong Korean to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Jinwoong Korean 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 star products
– The top 2 products and services of the firm as mentioned in the Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Jinwoong Korean has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Jinwoong Korean 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Walter Kuemmerle, James Lee, Bokeun Jin suggests that, Jinwoong Korean is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Jinwoong Korean 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis, in the dynamic environment Jinwoong Korean has struggled to respond to the nimble upstart competition. Jinwoong Korean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis are -
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 Jinwoong Korean 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Jinwoong Korean can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Jinwoong Korean 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.
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. Jinwoong Korean 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 Jinwoong Korean has opened avenues for new revenue streams for the organization in the industry. This can help Jinwoong Korean to build a more holistic ecosystem as suggested in the Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis case study. Jinwoong Korean can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jinwoong Korean 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 Jinwoong Korean to increase its market reach. Jinwoong Korean 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jinwoong Korean 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 Jinwoong Korean to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jinwoong Korean 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jinwoong Korean in the consumer business. Now Jinwoong Korean can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jinwoong Korean 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. Jinwoong Korean 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jinwoong Korean 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, as suggested in case study, Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Jinwoong Korean can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis suggest that firm 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.
Threats Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis are -
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.
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. Jinwoong Korean 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 Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jinwoong Korean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Jinwoong Korean in the Finance & Accounting sector and impact the bottomline of the organization.
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. Jinwoong Korean needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Jinwoong Korean 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 the industry and other sectors.
Stagnating economy with rate increase
– Jinwoong Korean 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 field.
Environmental challenges
– Jinwoong Korean 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. Jinwoong Korean can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High dependence on third party suppliers
– Jinwoong Korean 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.
Technology acceleration in Forth Industrial Revolution
– Jinwoong Korean has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Jinwoong Korean needs to keep up with the evolution of technology in the Finance & Accounting 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.
Increasing wage structure of Jinwoong Korean
– 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 Jinwoong Korean.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jinwoong Korean with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis 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 the case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis 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 the Harvard case study Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis 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 Jinwoong: Financing an Entrepreneurial Firm in the Wake of the Korean Financial Crisis is 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 Jinwoong Korean needs to make to build a sustainable competitive advantage.
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