SWOT Analysis / TOWS Matrix for Samsung C&T (South Korea)
Based on various researches at Oak Spring University , Samsung C&T is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Samsung C&T can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung C&T, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung C&T 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 Samsung C&T can be done for the following purposes –
1. Strategic planning of Samsung C&T
2. Improving business portfolio management of Samsung C&T
3. Assessing feasibility of the new initiative in South Korea
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samsung C&T
Strengths of Samsung C&T | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung C&T are -
Sustainable margins compare to other players in Recreational Activities industry
– Samsung C&T has clearly differentiated products in the market place. This has enabled Samsung C&T to fetch slight price premium compare to the competitors in the Recreational Activities industry. The sustainable margins have also helped Samsung C&T to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Samsung C&T has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Samsung C&T staying ahead in the Recreational Activities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Samsung C&T 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.
Superior customer experience
– The customer experience strategy of Samsung C&T in Recreational Activities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Samsung C&T has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Samsung C&T
– The covid-19 pandemic has put organizational resilience at the centre of everthing Samsung C&T does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Samsung C&T is one of the leading players in the Recreational Activities industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Samsung C&T has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung C&T 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
- Samsung C&T 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 Samsung C&T is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Samsung C&T emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Samsung C&T in the Services sector have low bargaining power. Samsung C&T has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Samsung C&T to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Samsung C&T 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 Recreational Activities industry. The technology infrastructure of South Korea 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.
Ability to lead change in Recreational Activities
– Samsung C&T is one of the leading players in the Recreational Activities industry in South Korea. Over the years it has not only transformed the business landscape in the Recreational Activities industry in South Korea but also across the existing markets. The ability to lead change has enabled Samsung C&T in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Samsung C&T | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung C&T are -
High operating costs
– Compare to the competitors, Samsung C&T has high operating costs in the Recreational Activities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Samsung C&T lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Recreational Activities industry, Samsung C&T needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners in Recreational Activities industry
– because of the regulatory requirements in South Korea, Samsung C&T 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 Recreational Activities industry.
Need for greater diversity
– Samsung C&T 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.
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 Samsung C&T supply chain. Even after few cautionary changes, Samsung C&T is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Samsung C&T vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Samsung C&T is just above the Recreational Activities 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.
Capital Spending Reduction
– Even during the low interest decade, Samsung C&T 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 Recreational Activities industry using digital technology.
Skills based hiring in Recreational Activities industry
– The stress on hiring functional specialists at Samsung C&T 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.
Ability to respond to the competition
– As the decision making is very deliberative at Samsung C&T, in the dynamic environment of Recreational Activities industry it has struggled to respond to the nimble upstart competition. Samsung C&T has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Samsung C&T strategy
– From the outside it seems that the employees of Samsung C&T 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.
Products dominated business model
– Even though Samsung C&T has some of the most successful models in the Recreational Activities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Samsung C&T should strive to include more intangible value offerings along with its core products and services.
Samsung C&T Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Samsung C&T are -
Use of Bitcoin and other crypto currencies for transactions in Recreational Activities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Samsung C&T in the Recreational Activities industry. Now Samsung C&T can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Samsung C&T 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 Samsung C&T to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung C&T 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.
Creating value in data economy
– The success of analytics program of Samsung C&T has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help Samsung C&T to build a more holistic ecosystem for Samsung C&T products in the Recreational Activities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Recreational Activities industry, but it has also influenced the consumer preferences. Samsung C&T can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Samsung C&T 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 Recreational Activities industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Samsung C&T can use these opportunities to build new business models that can help the communities that Samsung C&T operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.
Developing new processes and practices
– Samsung C&T can develop new processes and procedures in Recreational Activities 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung C&T in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Activities industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Samsung C&T 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.
Better consumer reach
– The expansion of the 5G network will help Samsung C&T to increase its market reach. Samsung C&T 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.
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. Samsung C&T can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Samsung C&T 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.
Threats Samsung C&T External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Samsung C&T are -
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. Samsung C&T needs to understand the core reasons impacting the Recreational Activities industry. This will help it in building a better workplace.
Environmental challenges
– Samsung C&T 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. Samsung C&T can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
High dependence on third party suppliers
– Samsung C&T 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.
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 Samsung C&T business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Samsung C&T
– 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 Samsung C&T.
Stagnating economy with rate increase
– Samsung C&T 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 Recreational Activities industry.
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 Samsung C&T in the Recreational Activities sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Samsung C&T has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, Samsung C&T needs to keep up with the evolution of technology in the Recreational Activities 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.
Regulatory challenges
– Samsung C&T 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 Recreational Activities industry regulations.
Consumer confidence and its impact on Samsung C&T 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 Recreational Activities 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Samsung C&T in Recreational Activities industry. The Recreational Activities industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Recreational Activities industry are lowering. It can presents Samsung C&T with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Activities sector.
Weighted SWOT Analysis of Samsung C&T Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Samsung C&T 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 Samsung C&T 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 Samsung C&T 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 Samsung C&T 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 Samsung C&T needs to make to build a sustainable competitive advantage.