American Fast Food in Korea SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of American Fast Food in Korea
A major U.S.-based fast food company with extensive operations around the world was contemplating whether to enter the Korean market. The Korean fast food market was hit badly by the Asian economic crisis in the late 1990s, but the economy was turning around. Thus, fast food demand in Korea was expected to increase. For the industry analysis, this case provides information on various competitors, substitute foods, new entrants, consumers, and suppliers. Also includes social issues as potential forces.
Authors :: Paul W. Beamish, Jaechul Jung, Hun-Hee Kim
Swot Analysis of "American Fast Food in Korea" written by Paul W. Beamish, Jaechul Jung, Hun-Hee Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fast Food facing as an external strategic factors. Some of the topics covered in American Fast Food in Korea case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the American Fast Food in Korea casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of American Fast Food in Korea
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in American Fast Food in Korea case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fast Food, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fast Food 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 American Fast Food in Korea can be done for the following purposes –
1. Strategic planning using facts provided in American Fast Food in Korea case study
2. Improving business portfolio management of Fast Food
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fast Food
Strengths American Fast Food in Korea | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fast Food in American Fast Food in Korea Harvard Business Review case study are -
High brand equity
– Fast Food has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fast Food to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Fast Food is present in almost all the verticals within the industry. This has provided firm in American Fast Food in Korea 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.
Learning organization
- Fast Food 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 Fast Food is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in American Fast Food in Korea Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Fast Food 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 American Fast Food in Korea HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Fast Food 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.
Low bargaining power of suppliers
– Suppliers of Fast Food in the sector have low bargaining power. American Fast Food in Korea has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fast Food to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Fast Food 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.
Analytics focus
– Fast Food 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 Paul W. Beamish, Jaechul Jung, Hun-Hee Kim 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.
Innovation driven organization
– Fast Food is one of the most innovative firm in sector. Manager in American Fast Food in Korea Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Fast Food is one of the leading recruiters in the industry. Managers in the American Fast Food in Korea are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Fast Food has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fast Food 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.
Sustainable margins compare to other players in Strategy & Execution industry
– American Fast Food in Korea firm has clearly differentiated products in the market place. This has enabled Fast Food to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Fast Food to invest into research and development (R&D) and innovation.
Weaknesses American Fast Food in Korea | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of American Fast Food in Korea are -
High operating costs
– Compare to the competitors, firm in the HBR case study American Fast Food in Korea 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 Fast Food 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study American Fast Food in Korea, is just above the industry average. Fast Food 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.
Interest costs
– Compare to the competition, Fast Food 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, Paul W. Beamish, Jaechul Jung, Hun-Hee Kim suggests that, Fast Food 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.
Aligning sales with marketing
– It come across in the case study American Fast Food in Korea that the firm 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 in the case American Fast Food in Korea can leverage the sales team experience to cultivate customer relationships as Fast Food is planning to shift buying processes online.
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 Fast Food supply chain. Even after few cautionary changes mentioned in the HBR case study - American Fast Food in Korea, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fast Food vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Fast Food is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fast Food needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fast Food to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As American Fast Food in Korea HBR case study mentions - Fast Food 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.
Low market penetration in new markets
– Outside its home market of Fast Food, firm in the HBR case study American Fast Food in Korea needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Fast Food products
– To increase the profitability and margins on the products, Fast Food needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Fast Food has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - American Fast Food in Korea should strive to include more intangible value offerings along with its core products and services.
Opportunities American Fast Food in Korea | 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 American Fast Food in Korea are -
Creating value in data economy
– The success of analytics program of Fast Food has opened avenues for new revenue streams for the organization in the industry. This can help Fast Food to build a more holistic ecosystem as suggested in the American Fast Food in Korea case study. Fast Food 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 Fast Food can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fast Food in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Fast Food 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 Strategy & Execution segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fast Food 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 Fast Food to hire the very best people irrespective of their geographical location.
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 Fast Food in the consumer business. Now Fast Food can target international markets with far fewer capital restrictions requirements than the existing system.
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. Fast Food can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Fast Food can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. American Fast Food in Korea 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Fast Food can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Fast Food 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fast Food 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. Fast Food 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.
Using analytics as competitive advantage
– Fast Food has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study American Fast Food in Korea - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fast Food to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Fast Food can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Threats American Fast Food in Korea External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study American Fast Food in Korea are -
Regulatory challenges
– Fast Food needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study American Fast Food in Korea, Fast Food may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Fast Food
– 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 Fast Food.
Stagnating economy with rate increase
– Fast Food 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.
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. Fast Food needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fast Food 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
– Fast Food 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.
Shortening product life cycle
– it is one of the major threat that Fast Food is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Fast Food has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fast Food needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Fast Food in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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 Fast Food business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fast Food 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 American Fast Food in Korea 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 American Fast Food in Korea 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 American Fast Food in Korea 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 American Fast Food in Korea 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 American Fast Food in Korea 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 Fast Food needs to make to build a sustainable competitive advantage.