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 - – increasing household debt because of falling income levels, increasing energy prices, increasing commodity prices, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Daewoo Shipbuilding in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Daewoo Shipbuilding and Heavy Machinery Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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 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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Daewoo Shipbuilding and Heavy Machinery 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 Daewoo Shipbuilding has relatively successful track record of launching new products.
Need for greater diversity
– Daewoo Shipbuilding 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.
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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Daewoo Shipbuilding and Heavy Machinery, is just above the industry average. Daewoo Shipbuilding 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.
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.
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.
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.
Slow to strategic competitive environment developments
– As Daewoo Shipbuilding and Heavy Machinery HBR case study mentions - Daewoo Shipbuilding 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.
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 -
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.
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.
Buying journey improvements
– Daewoo Shipbuilding can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Daewoo Shipbuilding and Heavy Machinery 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.
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.
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 Daewoo Shipbuilding 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.
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.
Developing new processes and practices
– Daewoo Shipbuilding can develop new processes and procedures in Technology & Operations 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daewoo Shipbuilding 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 Daewoo Shipbuilding to hire the very best people irrespective of their geographical location.
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.
Loyalty marketing
– Daewoo Shipbuilding 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.
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.
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.
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.
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 -
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 .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daewoo Shipbuilding 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 Daewoo Shipbuilding and Heavy Machinery .
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.
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 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.
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. Daewoo Shipbuilding 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.
Stagnating economy with rate increase
– Daewoo Shipbuilding 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.
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.
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.
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. Daewoo Shipbuilding needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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.
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.
