Daewoo Shipbuilding and Heavy Machinery SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Daewoo Shipbuilding and Heavy Machinery
Daewoo Shipbuilding and Heavy Machinery rescued its plant from the labor riots of 1987 to make it the fastest improving shipyard in the world by 1994. With its competition in Korea making huge investments in additional capacity in anticipation of the end of the recession, Daewoo instead has to decide if its strategy of continuous investment can provide the needed capacity.
Swot Analysis of "Daewoo Shipbuilding and Heavy Machinery" written by David M. Upton, Bowon Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Daewoo Shipbuilding facing as an external strategic factors. Some of the topics covered in Daewoo Shipbuilding and Heavy Machinery case study are - Strategic Management Strategies, Developing employees, Labor, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Daewoo Shipbuilding and Heavy Machinery casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, wage bills are increasing, talent flight as more people leaving formal jobs,
increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Daewoo Shipbuilding and Heavy Machinery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Daewoo Shipbuilding and Heavy Machinery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daewoo Shipbuilding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daewoo Shipbuilding 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 Daewoo Shipbuilding and Heavy Machinery can be done for the following purposes –
1. Strategic planning using facts provided in Daewoo Shipbuilding and Heavy Machinery case study
2. Improving business portfolio management of Daewoo Shipbuilding
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daewoo Shipbuilding
Strengths Daewoo Shipbuilding and Heavy Machinery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daewoo Shipbuilding in Daewoo Shipbuilding and Heavy Machinery Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Daewoo Shipbuilding 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 Daewoo Shipbuilding in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Daewoo Shipbuilding 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.
Ability to recruit top talent
– Daewoo Shipbuilding is one of the leading recruiters in the industry. Managers in the Daewoo Shipbuilding and Heavy Machinery are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Daewoo Shipbuilding is one of the most innovative firm in sector. Manager in Daewoo Shipbuilding and Heavy Machinery Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Daewoo Shipbuilding is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Daewoo Shipbuilding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daewoo Shipbuilding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Daewoo Shipbuilding and Heavy Machinery firm has clearly differentiated products in the market place. This has enabled Daewoo Shipbuilding to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Daewoo Shipbuilding to invest into research and development (R&D) and innovation.
Training and development
– Daewoo Shipbuilding has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding 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.
Successful track record of launching new products
– Daewoo Shipbuilding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daewoo Shipbuilding 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.
Diverse revenue streams
– Daewoo Shipbuilding is present in almost all the verticals within the industry. This has provided firm in Daewoo Shipbuilding and Heavy Machinery 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Daewoo Shipbuilding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daewoo Shipbuilding 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.
Weaknesses Daewoo Shipbuilding and Heavy Machinery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daewoo Shipbuilding and Heavy Machinery are -
Lack of clear differentiation of Daewoo Shipbuilding products
– To increase the profitability and margins on the products, Daewoo Shipbuilding needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Daewoo Shipbuilding 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 - Daewoo Shipbuilding and Heavy Machinery should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daewoo Shipbuilding is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Daewoo Shipbuilding and Heavy Machinery can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, David M. Upton, Bowon Kim suggests that, Daewoo Shipbuilding 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.
Slow decision making process
– As mentioned earlier in the report, Daewoo Shipbuilding 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. Daewoo Shipbuilding 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Daewoo Shipbuilding and Heavy Machinery, it seems that the employees of Daewoo Shipbuilding 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.
Capital Spending Reduction
– Even during the low interest decade, Daewoo Shipbuilding 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Daewoo Shipbuilding and Heavy Machinery, in the dynamic environment Daewoo Shipbuilding has struggled to respond to the nimble upstart competition. Daewoo Shipbuilding has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Daewoo Shipbuilding and Heavy Machinery, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. 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.
Aligning sales with marketing
– It come across in the case study Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding and Heavy Machinery can leverage the sales team experience to cultivate customer relationships as Daewoo Shipbuilding is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Daewoo Shipbuilding, firm in the HBR case study Daewoo Shipbuilding and Heavy Machinery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Daewoo Shipbuilding and Heavy Machinery | 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 Daewoo Shipbuilding and Heavy Machinery are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daewoo Shipbuilding 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. Daewoo Shipbuilding 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daewoo Shipbuilding is facing challenges because of the dominance of functional experts in the organization. Daewoo Shipbuilding and Heavy Machinery case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daewoo Shipbuilding 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, Daewoo Shipbuilding and Heavy Machinery, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Daewoo Shipbuilding 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 Technology & Operations segment.
Creating value in data economy
– The success of analytics program of Daewoo Shipbuilding has opened avenues for new revenue streams for the organization in the industry. This can help Daewoo Shipbuilding to build a more holistic ecosystem as suggested in the Daewoo Shipbuilding and Heavy Machinery case study. Daewoo Shipbuilding can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Daewoo Shipbuilding 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 Daewoo Shipbuilding and Heavy Machinery - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daewoo Shipbuilding to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Daewoo Shipbuilding to increase its market reach. Daewoo Shipbuilding 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.
Learning at scale
– Online learning technologies has now opened space for Daewoo Shipbuilding 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.
Leveraging digital technologies
– Daewoo Shipbuilding 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daewoo Shipbuilding in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations 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 Daewoo Shipbuilding in the consumer business. Now Daewoo Shipbuilding can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daewoo Shipbuilding can use these opportunities to build new business models that can help the communities that Daewoo Shipbuilding operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Daewoo Shipbuilding can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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 Daewoo Shipbuilding and Heavy Machinery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Daewoo Shipbuilding and Heavy Machinery are -
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 Daewoo Shipbuilding in the Technology & Operations sector and impact the bottomline 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 Daewoo Shipbuilding business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Daewoo Shipbuilding is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Daewoo Shipbuilding has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Daewoo Shipbuilding needs to keep up with the evolution of technology in the Technology & Operations 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.
Consumer confidence and its impact on Daewoo Shipbuilding 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Daewoo Shipbuilding and Heavy Machinery, Daewoo Shipbuilding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing wage structure of Daewoo Shipbuilding
– 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 Daewoo Shipbuilding.
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.
Regulatory challenges
– Daewoo Shipbuilding 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 Technology & Operations industry regulations.
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 Daewoo Shipbuilding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daewoo Shipbuilding can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Daewoo Shipbuilding 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. Daewoo Shipbuilding can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding needs to make to build a sustainable competitive advantage.