SWOT Analysis / TOWS Matrix for Samsung Electro-Mechanics (South Korea)
Based on various researches at Oak Spring University , Samsung Electro-Mechanics is operating in a macro-environment that has been destablized by – wage bills are increasing, central banks are concerned over increasing inflation, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Samsung Electro-Mechanics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Samsung Electro-Mechanics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Electro-Mechanics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Electro-Mechanics 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 Electro-Mechanics can be done for the following purposes –
1. Strategic planning of Samsung Electro-Mechanics
2. Improving business portfolio management of Samsung Electro-Mechanics
3. Assessing feasibility of the new initiative in South Korea
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samsung Electro-Mechanics
Strengths of Samsung Electro-Mechanics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Electro-Mechanics are -
Training and development
– Samsung Electro-Mechanics has one of the best training and development program in Technology 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.
High brand equity
– Samsung Electro-Mechanics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Samsung Electro-Mechanics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Samsung Electro-Mechanics 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.
Successful track record of launching new products
– Samsung Electro-Mechanics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Electro-Mechanics 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.
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For Samsung Electro-Mechanics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samsung Electro-Mechanics 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.
Innovation driven organization
– Samsung Electro-Mechanics is one of the most innovative firm in Semiconductors sector.
Learning organization
- Samsung Electro-Mechanics 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 Electro-Mechanics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Samsung Electro-Mechanics emphasize – knowledge, initiative, and innovation.
Analytics focus
– Samsung Electro-Mechanics 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 Semiconductors 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.
Operational resilience
– The operational resilience strategy of Samsung Electro-Mechanics comprises – understanding the underlying the factors in the Semiconductors 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 recruit top talent
– Samsung Electro-Mechanics is one of the leading players in the Semiconductors 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.
Highly skilled collaborators
– Samsung Electro-Mechanics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Semiconductors industry. Secondly the value chain collaborators of Samsung Electro-Mechanics have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Semiconductors
– Samsung Electro-Mechanics is one of the leading players in the Semiconductors industry in South Korea. Over the years it has not only transformed the business landscape in the Semiconductors industry in South Korea but also across the existing markets. The ability to lead change has enabled Samsung Electro-Mechanics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Samsung Electro-Mechanics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung Electro-Mechanics are -
Increasing silos among functional specialists
– The organizational structure of Samsung Electro-Mechanics is dominated by functional specialists. It is not different from other players in the Semiconductors industry, but Samsung Electro-Mechanics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Electro-Mechanics to focus more on services in the Semiconductors 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, Samsung Electro-Mechanics is slow explore the new channels of communication. These new channels of communication can help Samsung Electro-Mechanics to provide better information regarding Semiconductors products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Semiconductors industry
– because of the regulatory requirements in South Korea, Samsung Electro-Mechanics 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 Semiconductors industry.
Need for greater diversity
– Samsung Electro-Mechanics 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 Samsung Electro-Mechanics ‘s star products
– The top 2 products and services of Samsung Electro-Mechanics still accounts for major business revenue. This dependence on star products in Semiconductors industry has resulted into insufficient focus on developing new products, even though Samsung Electro-Mechanics has relatively successful track record of launching new products.
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 Electro-Mechanics supply chain. Even after few cautionary changes, Samsung Electro-Mechanics is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Samsung Electro-Mechanics vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of South Korea, Samsung Electro-Mechanics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Samsung Electro-Mechanics, in the dynamic environment of Semiconductors industry it has struggled to respond to the nimble upstart competition. Samsung Electro-Mechanics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Samsung Electro-Mechanics products
– To increase the profitability and margins on the products, Samsung Electro-Mechanics needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Samsung Electro-Mechanics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Semiconductors industry have deep experience in developing customer relationships. Marketing department at Samsung Electro-Mechanics can leverage the sales team experience to cultivate customer relationships as Samsung Electro-Mechanics is planning to shift buying processes online.
High cash cycle compare to competitors
Samsung Electro-Mechanics has a high cash cycle compare to other players in the Semiconductors industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Samsung Electro-Mechanics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Samsung Electro-Mechanics are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung Electro-Mechanics 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.
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 Electro-Mechanics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Samsung Electro-Mechanics to increase its market reach. Samsung Electro-Mechanics 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.
Developing new processes and practices
– Samsung Electro-Mechanics can develop new processes and procedures in Semiconductors 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Semiconductors industry, but it has also influenced the consumer preferences. Samsung Electro-Mechanics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Electro-Mechanics can use these opportunities to build new business models that can help the communities that Samsung Electro-Mechanics operates in. Secondly it can use opportunities from government spending in Semiconductors sector.
Creating value in data economy
– The success of analytics program of Samsung Electro-Mechanics has opened avenues for new revenue streams for the organization in Semiconductors industry. This can help Samsung Electro-Mechanics to build a more holistic ecosystem for Samsung Electro-Mechanics products in the Semiconductors industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Samsung Electro-Mechanics 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.
Using analytics as competitive advantage
– Samsung Electro-Mechanics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Semiconductors sector. This continuous investment in analytics has enabled Samsung Electro-Mechanics to build a competitive advantage using analytics. The analytics driven competitive advantage can help Samsung Electro-Mechanics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Samsung Electro-Mechanics is facing challenges because of the dominance of functional experts in the organization. Samsung Electro-Mechanics can utilize new technology in the field of Semiconductors industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Samsung Electro-Mechanics can use the latest technology developments to improve its manufacturing and designing process in Semiconductors 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung Electro-Mechanics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Semiconductors industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Semiconductors industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Samsung Electro-Mechanics in the Semiconductors industry. Now Samsung Electro-Mechanics can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Samsung Electro-Mechanics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Samsung Electro-Mechanics are -
Environmental challenges
– Samsung Electro-Mechanics 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 Electro-Mechanics can take advantage of this fund but it will also bring new competitors in the Semiconductors industry.
Technology acceleration in Forth Industrial Revolution
– Samsung Electro-Mechanics has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, Samsung Electro-Mechanics needs to keep up with the evolution of technology in the Semiconductors 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.
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 Electro-Mechanics needs to understand the core reasons impacting the Semiconductors industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Samsung Electro-Mechanics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Semiconductors sector.
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 Samsung Electro-Mechanics.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Semiconductors industry are lowering. It can presents Samsung Electro-Mechanics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Semiconductors sector.
Regulatory challenges
– Samsung Electro-Mechanics 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 Semiconductors industry regulations.
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 Electro-Mechanics in the Semiconductors sector and impact the bottomline of the organization.
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.
Consumer confidence and its impact on Samsung Electro-Mechanics 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 Semiconductors industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Samsung Electro-Mechanics is facing in Semiconductors sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Samsung Electro-Mechanics
– 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 Electro-Mechanics.
Weighted SWOT Analysis of Samsung Electro-Mechanics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Samsung Electro-Mechanics 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 Electro-Mechanics 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 Electro-Mechanics 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 Electro-Mechanics 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 Electro-Mechanics needs to make to build a sustainable competitive advantage.