SK-Electronics (6677) SWOT Analysis / TOWS Matrix / MBA Resources
Photography
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SK-Electronics (Japan)
Based on various researches at Oak Spring University , SK-Electronics is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
increasing energy prices, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SK-Electronics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SK-Electronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SK-Electronics 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 SK-Electronics can be done for the following purposes –
1. Strategic planning of SK-Electronics
2. Improving business portfolio management of SK-Electronics
3. Assessing feasibility of the new initiative in Japan
4. Making a Photography sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SK-Electronics
Strengths of SK-Electronics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SK-Electronics are -
Effective Research and Development (R&D)
– SK-Electronics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SK-Electronics staying ahead in the Photography industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– SK-Electronics is present in almost all the verticals within the Photography industry. This has provided SK-Electronics 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.
Ability to lead change in Photography
– SK-Electronics is one of the leading players in the Photography industry in Japan. Over the years it has not only transformed the business landscape in the Photography industry in Japan but also across the existing markets. The ability to lead change has enabled SK-Electronics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– SK-Electronics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SK-Electronics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the SK-Electronics 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.
Ability to recruit top talent
– SK-Electronics is one of the leading players in the Photography industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– SK-Electronics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Photography industry. Secondly the value chain collaborators of SK-Electronics have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– SK-Electronics 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 Photography industry. The technology infrastructure of Japan is also helping 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
– SK-Electronics is one of the most innovative firm in Photography sector.
Successful track record of launching new products
– SK-Electronics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SK-Electronics 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.
Learning organization
- SK-Electronics 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 SK-Electronics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SK-Electronics emphasize – knowledge, initiative, and innovation.
Digital Transformation in Photography industry
- digital transformation varies from industry to industry. For SK-Electronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SK-Electronics 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 of SK-Electronics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SK-Electronics are -
Low market penetration in new markets
– Outside its home market of Japan, SK-Electronics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of SK-Electronics is just above the Photography industry average. It 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.
High dependence on SK-Electronics ‘s star products
– The top 2 products and services of SK-Electronics still accounts for major business revenue. This dependence on star products in Photography industry has resulted into insufficient focus on developing new products, even though SK-Electronics has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of SK-Electronics is dominated by functional specialists. It is not different from other players in the Photography industry, but SK-Electronics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SK-Electronics to focus more on services in the Photography industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, SK-Electronics is slow explore the new channels of communication. These new channels of communication can help SK-Electronics to provide better information regarding Photography products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, SK-Electronics 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 Photography industry using digital technology.
Products dominated business model
– Even though SK-Electronics has some of the most successful models in the Photography industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SK-Electronics should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that SK-Electronics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Photography industry have deep experience in developing customer relationships. Marketing department at SK-Electronics can leverage the sales team experience to cultivate customer relationships as SK-Electronics is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at SK-Electronics, in the dynamic environment of Photography industry it has struggled to respond to the nimble upstart competition. SK-Electronics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Photography industry
– because of the regulatory requirements in Japan, SK-Electronics 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 Photography industry.
High cash cycle compare to competitors
SK-Electronics has a high cash cycle compare to other players in the Photography industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
SK-Electronics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SK-Electronics are -
Low interest rates
– Even though inflation is raising its head in most developed economies, SK-Electronics 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.
Better consumer reach
– The expansion of the 5G network will help SK-Electronics to increase its market reach. SK-Electronics 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.
Buying journey improvements
– SK-Electronics can improve the customer journey of consumers in the Photography industry by using analytics and artificial intelligence. It 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.
Building a culture of innovation
– managers at SK-Electronics 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 Photography industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SK-Electronics 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 SK-Electronics to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, SK-Electronics 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 SK-Electronics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– SK-Electronics can develop new processes and procedures in Photography 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.
Learning at scale
– Online learning technologies has now opened space for SK-Electronics 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.
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. SK-Electronics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– SK-Electronics can use the latest technology developments to improve its manufacturing and designing process in Photography sector. 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Photography industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SK-Electronics 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. SK-Electronics 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, SK-Electronics is facing challenges because of the dominance of functional experts in the organization. SK-Electronics can utilize new technology in the field of Photography industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of SK-Electronics has opened avenues for new revenue streams for the organization in Photography industry. This can help SK-Electronics to build a more holistic ecosystem for SK-Electronics products in the Photography industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats SK-Electronics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SK-Electronics are -
Easy access to finance
– Easy access to finance in Photography industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SK-Electronics 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. SK-Electronics 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.
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 SK-Electronics business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– SK-Electronics 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 Photography industry.
Regulatory challenges
– SK-Electronics 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 Photography industry regulations.
Consumer confidence and its impact on SK-Electronics 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 Photography industry and other sectors.
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.
Environmental challenges
– SK-Electronics 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. SK-Electronics can take advantage of this fund but it will also bring new competitors in the Photography industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SK-Electronics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Photography sector.
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.
Shortening product life cycle
– it is one of the major threat that SK-Electronics is facing in Photography sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. SK-Electronics needs to understand the core reasons impacting the Photography industry. This will help it in building a better workplace.
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 SK-Electronics in the Photography sector and impact the bottomline of the organization.
Weighted SWOT Analysis of SK-Electronics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SK-Electronics 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 SK-Electronics 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 SK-Electronics 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 SK-Electronics 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 SK-Electronics needs to make to build a sustainable competitive advantage.
