SWOT Analysis / TOWS Matrix for Daewoo Shipbuilding (South Korea)
Based on various researches at Oak Spring University , Daewoo Shipbuilding is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing commodity prices, central banks are concerned over increasing inflation, technology disruption, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Daewoo Shipbuilding
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daewoo Shipbuilding can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daewoo Shipbuilding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daewoo Shipbuilding operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Daewoo Shipbuilding can be done for the following purposes –
1. Strategic planning of Daewoo Shipbuilding
2. Improving business portfolio management of Daewoo Shipbuilding
3. Assessing feasibility of the new initiative in South Korea
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daewoo Shipbuilding
Strengths of Daewoo Shipbuilding | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daewoo Shipbuilding are -
Training and development
– Daewoo Shipbuilding has one of the best training and development program in Transportation 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.
Superior customer experience
– The customer experience strategy of Daewoo Shipbuilding in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Daewoo Shipbuilding has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Transportation industry. Secondly the value chain collaborators of Daewoo Shipbuilding have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Water Transportation industry
– Daewoo Shipbuilding has clearly differentiated products in the market place. This has enabled Daewoo Shipbuilding to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Daewoo Shipbuilding to invest into research and development (R&D) and innovation.
Analytics focus
– Daewoo Shipbuilding 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 Water Transportation 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.
Innovation driven organization
– Daewoo Shipbuilding is one of the most innovative firm in Water Transportation sector.
Learning organization
- Daewoo Shipbuilding 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 Daewoo Shipbuilding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daewoo Shipbuilding emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Daewoo Shipbuilding comprises – understanding the underlying the factors in the Water Transportation 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.
Effective Research and Development (R&D)
– Daewoo Shipbuilding has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daewoo Shipbuilding staying ahead in the Water Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Daewoo Shipbuilding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daewoo Shipbuilding 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.
Low bargaining power of suppliers
– Suppliers of Daewoo Shipbuilding in the Transportation sector have low bargaining power. Daewoo Shipbuilding has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daewoo Shipbuilding to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Daewoo Shipbuilding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daewoo Shipbuilding 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 Daewoo Shipbuilding | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daewoo Shipbuilding are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daewoo Shipbuilding is slow explore the new channels of communication. These new channels of communication can help Daewoo Shipbuilding to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Daewoo Shipbuilding is just above the Water Transportation 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.
Workers concerns about automation
– As automation is fast increasing in the Water Transportation industry, Daewoo Shipbuilding 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.
Increasing silos among functional specialists
– The organizational structure of Daewoo Shipbuilding is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Daewoo Shipbuilding needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daewoo Shipbuilding to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of South Korea, Daewoo Shipbuilding needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Daewoo Shipbuilding has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Transportation industry over the last five years. Daewoo Shipbuilding even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Daewoo Shipbuilding has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Daewoo Shipbuilding products
– To increase the profitability and margins on the products, Daewoo Shipbuilding needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Daewoo Shipbuilding has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Daewoo Shipbuilding 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 Daewoo Shipbuilding needs to have more collaboration between its sales team and marketing team. Sales professionals in the Water Transportation industry have deep experience in developing customer relationships. Marketing department at Daewoo Shipbuilding can leverage the sales team experience to cultivate customer relationships as Daewoo Shipbuilding is planning to shift buying processes online.
Interest costs
– Compare to the competition, Daewoo Shipbuilding 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.
Daewoo Shipbuilding Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daewoo Shipbuilding are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Water Transportation industry, but it has also influenced the consumer preferences. Daewoo Shipbuilding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Daewoo Shipbuilding to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daewoo Shipbuilding is facing challenges because of the dominance of functional experts in the organization. Daewoo Shipbuilding can utilize new technology in the field of Water Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Daewoo Shipbuilding to increase its market reach. Daewoo Shipbuilding 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.
Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daewoo Shipbuilding in the Water Transportation industry. Now Daewoo Shipbuilding can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Daewoo Shipbuilding can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Water Transportation industry.
Loyalty marketing
– Daewoo Shipbuilding has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Daewoo Shipbuilding 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
– Daewoo Shipbuilding can develop new processes and procedures in Water Transportation 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.
Manufacturing automation
– Daewoo Shipbuilding can use the latest technology developments to improve its manufacturing and designing process in Water Transportation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daewoo Shipbuilding to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Daewoo Shipbuilding to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daewoo Shipbuilding can use these opportunities to build new business models that can help the communities that Daewoo Shipbuilding operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Learning at scale
– Online learning technologies has now opened space for Daewoo Shipbuilding to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Daewoo Shipbuilding External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daewoo Shipbuilding 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. Daewoo Shipbuilding needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
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 Daewoo Shipbuilding business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daewoo Shipbuilding in Water Transportation industry. The Water Transportation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daewoo Shipbuilding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Transportation sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Daewoo Shipbuilding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
Regulatory challenges
– Daewoo Shipbuilding 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 Water Transportation industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Daewoo Shipbuilding.
Environmental challenges
– Daewoo Shipbuilding needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Daewoo Shipbuilding can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daewoo Shipbuilding can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Daewoo Shipbuilding prominent markets.
Increasing wage structure of Daewoo Shipbuilding
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Daewoo Shipbuilding.
Consumer confidence and its impact on Daewoo Shipbuilding demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Water Transportation 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.
Weighted SWOT Analysis of Daewoo Shipbuilding Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daewoo Shipbuilding 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 Daewoo Shipbuilding 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 Daewoo Shipbuilding is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Daewoo Shipbuilding to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Daewoo Shipbuilding needs to make to build a sustainable competitive advantage.