CJ E&M: Creating a K-Culture in the U.S. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CJ E&M: Creating a K-Culture in the U.S.
Buoyed by the success of K-pop music and K-drama television shows in Asian countries, Jay Lee, Chairman of the South Korean conglomerate CJ Group, believed that the time was ripe for taking Korean cultural content to the West. One initiative, carried out by the Group's Entertainment & Media (E&M) division, was a daylong fan convention, called 'KCON' , that was held in Irvine CA in October 2012 and which featured various Korean cultural elements, such as music, dance, film, and food. In the spring of 2013, Miky Lee, the Group's Vice Chairman, called a meeting with key executives to review the results of KCON 2012's and make a recommendation to the Chairman on whether to hold a similar event in 2013. As part of their deliberations, the executives were expected to consider where a potential 2013 convention should be held, which artists to invite, which target consumers to focus on, how to price tickets and how to attract more sponsors. With KCON 2012 having lost money, despite a robust turnout, it was far from clear whether to repeat the event and, if so, whether its scale should be expanded beyond 2012's $1.1 million budget. With CJ recently opening a chain of mid-market Korean food restaurants in the Los Angeles area called Bibigo, the meeting would also touch on the restaurant's U.S. growth plans and how they might be connected to KCON. More broadly, the executives had to wrestle with the question of whether Americans would ever really embrace Hallyu, the Korean Wave, beyond one-off success stories like PSY's "Gangnam Style". And even if they believed so, was KCON the right vehicle to make it happen, or was the event just a waste of the company's time and money? CJ Group's Vice Chairman, Miky Lee, and other CJ executives need to review the results of KCON 2012, the company's first Korean pop-culture convention, and make a recommendation to the Chairman on whether to hold a similar event in 2013. The executives were expected to consider where a potential 2013 convention should be held, which artists to invite, which target consumers to focus on, how to price tickets and how to attract more sponsors. With KCON 2012 having lost money, it was unclear whether to repeat the event and, if so, what budget to allocate.
Authors :: Elie Ofek, Sang-Hoon Kim, Michael Norris
Swot Analysis of "CJ E&M: Creating a K-Culture in the U.S." written by Elie Ofek, Sang-Hoon Kim, Michael Norris includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kcon Cj facing as an external strategic factors. Some of the topics covered in CJ E&M: Creating a K-Culture in the U.S. case study are - Strategic Management Strategies, Economy, Marketing, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the CJ E&M: Creating a K-Culture in the U.S. casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of CJ E&M: Creating a K-Culture in the U.S.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CJ E&M: Creating a K-Culture in the U.S. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kcon Cj, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kcon Cj 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 CJ E&M: Creating a K-Culture in the U.S. can be done for the following purposes –
1. Strategic planning using facts provided in CJ E&M: Creating a K-Culture in the U.S. case study
2. Improving business portfolio management of Kcon Cj
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kcon Cj
Strengths CJ E&M: Creating a K-Culture in the U.S. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kcon Cj in CJ E&M: Creating a K-Culture in the U.S. Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– CJ E&M: Creating a K-Culture in the U.S. firm has clearly differentiated products in the market place. This has enabled Kcon Cj to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Kcon Cj to invest into research and development (R&D) and innovation.
Strong track record of project management
– Kcon Cj is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Kcon Cj has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CJ E&M: Creating a K-Culture in the U.S. Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Kcon Cj 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.
Innovation driven organization
– Kcon Cj is one of the most innovative firm in sector. Manager in CJ E&M: Creating a K-Culture in the U.S. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Kcon Cj is present in almost all the verticals within the industry. This has provided firm in CJ E&M: Creating a K-Culture in the U.S. 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.
Highly skilled collaborators
– Kcon Cj 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 CJ E&M: Creating a K-Culture in the U.S. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Kcon Cj digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kcon Cj 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 Kcon Cj in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Kcon Cj 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.
Effective Research and Development (R&D)
– Kcon Cj 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 CJ E&M: Creating a K-Culture in the U.S. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Kcon Cj in the sector have low bargaining power. CJ E&M: Creating a K-Culture in the U.S. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kcon Cj to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses CJ E&M: Creating a K-Culture in the U.S. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CJ E&M: Creating a K-Culture in the U.S. are -
Lack of clear differentiation of Kcon Cj products
– To increase the profitability and margins on the products, Kcon Cj needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Kcon Cj 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.
Skills based hiring
– The stress on hiring functional specialists at Kcon Cj 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kcon Cj is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CJ E&M: Creating a K-Culture in the U.S. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Kcon Cj, firm in the HBR case study CJ E&M: Creating a K-Culture in the U.S. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CJ E&M: Creating a K-Culture in the U.S., it seems that the employees of Kcon Cj don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CJ E&M: Creating a K-Culture in the U.S., is just above the industry average. Kcon Cj 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CJ E&M: Creating a K-Culture in the U.S., in the dynamic environment Kcon Cj has struggled to respond to the nimble upstart competition. Kcon Cj has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Kcon Cj has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CJ E&M: Creating a K-Culture in the U.S. 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 Kcon Cj has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Kcon Cj 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.
Opportunities CJ E&M: Creating a K-Culture in the U.S. | 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 CJ E&M: Creating a K-Culture in the U.S. are -
Loyalty marketing
– Kcon Cj 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Kcon Cj can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kcon Cj 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kcon Cj 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, CJ E&M: Creating a K-Culture in the U.S., 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 Kcon Cj to increase its market reach. Kcon Cj 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kcon Cj can use these opportunities to build new business models that can help the communities that Kcon Cj operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Manufacturing automation
– Kcon Cj can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. 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.
Buying journey improvements
– Kcon Cj can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CJ E&M: Creating a K-Culture in the U.S. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kcon Cj in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Kcon Cj in the consumer business. Now Kcon Cj can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Kcon Cj 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.
Developing new processes and practices
– Kcon Cj can develop new processes and procedures in Sales & Marketing 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.
Creating value in data economy
– The success of analytics program of Kcon Cj has opened avenues for new revenue streams for the organization in the industry. This can help Kcon Cj to build a more holistic ecosystem as suggested in the CJ E&M: Creating a K-Culture in the U.S. case study. Kcon Cj can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats CJ E&M: Creating a K-Culture in the U.S. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CJ E&M: Creating a K-Culture in the U.S. 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.
Consumer confidence and its impact on Kcon Cj 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kcon Cj 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 prominent markets illustrated in HBR case study CJ E&M: Creating a K-Culture in the U.S. .
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. Kcon Cj needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Kcon Cj 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.
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 Kcon Cj.
Technology acceleration in Forth Industrial Revolution
– Kcon Cj has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kcon Cj needs to keep up with the evolution of technology in the Sales & Marketing 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kcon Cj in the Sales & Marketing industry. The Sales & Marketing 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kcon Cj can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Kcon Cj
– 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 Kcon Cj.
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. Kcon Cj 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.
High dependence on third party suppliers
– Kcon Cj 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kcon Cj 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 CJ E&M: Creating a K-Culture in the U.S. 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 CJ E&M: Creating a K-Culture in the U.S. 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 CJ E&M: Creating a K-Culture in the U.S. 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 CJ E&M: Creating a K-Culture in the U.S. 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 CJ E&M: Creating a K-Culture in the U.S. 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 Kcon Cj needs to make to build a sustainable competitive advantage.