The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident

This article investigates responses of the international and domestic (South Korean) publics to one of the most hotly debated corporate scandals in recent years: Korean Air's so-called nut rage incident. By analyzing both international and domestic media coverage of the occurrence, we reveal contrasting interpretations between the two. Whereas the South Korean public tends to generate intense debates addressing a lack of ethics in Korean Air's public communication following the incident, international public criticism is dominated by questions regarding South Korea's chronic chaebol system and its negative image in relation to South Korea's unique institutional context. Korean Air's incongruent notice of the employee as a key stakeholder is also discussed in the international media. Our research findings indicate how, rather than focusing on legal responsibility, the normative attitude of businesses toward stakeholder pressures is crucial as a means of escaping legitimacy-threatening events. The results of this study demonstrate how public responses to a single incident are diverse in global society and offer new insights regarding the importance of ethics in management leadership and public communication after a crisis incident.

Authors :: Rebecca Chunghee Kim, Kate Inyoung Yoo, Helal Uddin

Topics :: Global Business

Tags :: Corporate governance, Crisis communication, Crisis management, Ethics, Public relations, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident" written by Rebecca Chunghee Kim, Kate Inyoung Yoo, Helal Uddin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Korean Incident facing as an external strategic factors. Some of the topics covered in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident case study are - Strategic Management Strategies, Corporate governance, Crisis communication, Crisis management, Ethics, Public relations and Global Business.

Some of the macro environment factors that can be used to understand the The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Korean Incident, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Korean Incident 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident can be done for the following purposes –
1. Strategic planning using facts provided in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident case study
2. Improving business portfolio management of Korean Incident
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Korean Incident

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Strengths The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Korean Incident in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident Harvard Business Review case study are -

Operational resilience

– The operational resilience strategy in the The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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.

Cross disciplinary teams

– Horizontal connected teams at the Korean Incident 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

– Korean Incident 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 Rebecca Chunghee Kim, Kate Inyoung Yoo, Helal Uddin 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.

Learning organization

- Korean Incident 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 Korean Incident is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– Korean Incident is present in almost all the verticals within the industry. This has provided firm in The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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.

Sustainable margins compare to other players in Global Business industry

– The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident firm has clearly differentiated products in the market place. This has enabled Korean Incident to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Korean Incident to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Korean Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Korean Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Korean Incident in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– Korean Incident is one of the leading recruiters in the industry. Managers in the The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

– Suppliers of Korean Incident in the sector have low bargaining power. The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Korean Incident to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– Korean Incident has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Korean Incident to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident are -

Capital Spending Reduction

– Even during the low interest decade, Korean Incident 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.

No frontier risks strategy

– After analyzing the HBR case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, it seems that company is thinking about the frontier risks that can impact Global Business 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.

Low market penetration in new markets

– Outside its home market of Korean Incident, firm in the HBR case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring

– The stress on hiring functional specialists at Korean Incident 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.

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 Korean Incident supply chain. Even after few cautionary changes mentioned in the HBR case study - The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Korean Incident vulnerable to further global disruptions in South East Asia.

High bargaining power of channel partners

– Because of the regulatory requirements, Rebecca Chunghee Kim, Kate Inyoung Yoo, Helal Uddin suggests that, Korean Incident 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.

Interest costs

– Compare to the competition, Korean Incident 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, it seems that the employees of Korean Incident 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.

Need for greater diversity

– Korean Incident 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, is just above the industry average. Korean Incident 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.

Aligning sales with marketing

– It come across in the case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident can leverage the sales team experience to cultivate customer relationships as Korean Incident is planning to shift buying processes online.

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Opportunities The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident | 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident are -

Building a culture of innovation

– managers at Korean Incident 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 Global Business segment.

Low interest rates

– Even though inflation is raising its head in most developed economies, Korean Incident 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Korean Incident in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Korean Incident has opened avenues for new revenue streams for the organization in the industry. This can help Korean Incident to build a more holistic ecosystem as suggested in the The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident case study. Korean Incident can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Korean Incident 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, The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Leveraging digital technologies

– Korean Incident 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

– Korean Incident can develop new processes and procedures in Global Business 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.

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 Korean Incident in the consumer business. Now Korean Incident can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– Korean Incident can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Korean Incident can use these opportunities to build new business models that can help the communities that Korean Incident operates in. Secondly it can use opportunities from government spending in Global Business sector.

Loyalty marketing

– Korean Incident 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 Global Business industry, but it has also influenced the consumer preferences. Korean Incident can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for Korean Incident 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.

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Threats The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident are -

Stagnating economy with rate increase

– Korean Incident 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.

Regulatory challenges

– Korean Incident 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 Global Business industry regulations.

High dependence on third party suppliers

– Korean Incident 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.

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.

Easy access to finance

– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Korean Incident can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Korean Incident 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.

Increasing wage structure of Korean Incident

– 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 Korean Incident.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Korean Incident with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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.

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 Korean Incident.

Technology acceleration in Forth Industrial Revolution

– Korean Incident has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Korean Incident needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Korean Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident .

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident, Korean Incident may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

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Weighted SWOT Analysis of The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 The Korean Air Nut Rage Scandal: Domestic Versus International Responses to a Viral Incident 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 Korean Incident needs to make to build a sustainable competitive advantage.

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