Hyundai Elevator (17800) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hyundai Elevator (South Korea)
Based on various researches at Oak Spring University , Hyundai Elevator is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , technology disruption, there is backlash against globalization, there is increasing trade war between United States & China, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hyundai Elevator can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hyundai Elevator, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hyundai Elevator 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 Hyundai Elevator can be done for the following purposes –
1. Strategic planning of Hyundai Elevator
2. Improving business portfolio management of Hyundai Elevator
3. Assessing feasibility of the new initiative in South Korea
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hyundai Elevator
Strengths of Hyundai Elevator | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hyundai Elevator are -
Diverse revenue streams
– Hyundai Elevator is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Hyundai Elevator 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 Misc. Capital Goods
– Hyundai Elevator is one of the leading players in the Misc. Capital Goods industry in South Korea. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in South Korea but also across the existing markets. The ability to lead change has enabled Hyundai Elevator in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Hyundai Elevator has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hyundai Elevator to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Hyundai Elevator 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 Misc. Capital Goods 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.
Learning organization
- Hyundai Elevator 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 Hyundai Elevator is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hyundai Elevator emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Misc. Capital Goods industry
– Hyundai Elevator is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Hyundai Elevator in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Hyundai Elevator is one of the leading players in the Misc. Capital Goods 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.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Hyundai Elevator has clearly differentiated products in the market place. This has enabled Hyundai Elevator to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Hyundai Elevator to invest into research and development (R&D) and innovation.
Innovation driven organization
– Hyundai Elevator is one of the most innovative firm in Misc. Capital Goods sector.
Operational resilience
– The operational resilience strategy of Hyundai Elevator comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Organizational Resilience of Hyundai Elevator
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hyundai Elevator does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Hyundai Elevator | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hyundai Elevator are -
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Hyundai Elevator 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.
Need for greater diversity
– Hyundai Elevator 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 cash cycle compare to competitors
Hyundai Elevator has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Hyundai Elevator is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Hyundai Elevator needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hyundai Elevator to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Hyundai Elevator needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Hyundai Elevator can leverage the sales team experience to cultivate customer relationships as Hyundai Elevator is planning to shift buying processes online.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in South Korea, Hyundai Elevator 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 Misc. Capital Goods industry.
High dependence on Hyundai Elevator ‘s star products
– The top 2 products and services of Hyundai Elevator still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Hyundai Elevator has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Hyundai Elevator, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods industry. 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.
High operating costs
– Compare to the competitors, Hyundai Elevator has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hyundai Elevator lucrative customers.
Compensation and incentives
– The revenue per employee of Hyundai Elevator is just above the Misc. Capital Goods 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.
Slow decision making process
– As mentioned earlier in the report, Hyundai Elevator has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Hyundai Elevator 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.
Hyundai Elevator Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hyundai Elevator are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hyundai Elevator can use these opportunities to build new business models that can help the communities that Hyundai Elevator operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Learning at scale
– Online learning technologies has now opened space for Hyundai Elevator 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.
Using analytics as competitive advantage
– Hyundai Elevator has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Hyundai Elevator to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hyundai Elevator to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Hyundai Elevator can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
Better consumer reach
– The expansion of the 5G network will help Hyundai Elevator to increase its market reach. Hyundai Elevator 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hyundai Elevator 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. Hyundai Elevator 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.
Leveraging digital technologies
– Hyundai Elevator 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.
Creating value in data economy
– The success of analytics program of Hyundai Elevator has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Hyundai Elevator to build a more holistic ecosystem for Hyundai Elevator products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hyundai Elevator can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hyundai Elevator in the Misc. Capital Goods industry. Now Hyundai Elevator can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hyundai Elevator in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
Buying journey improvements
– Hyundai Elevator can improve the customer journey of consumers in the Misc. Capital Goods 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.
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 Hyundai Elevator 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.
Threats Hyundai Elevator External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hyundai Elevator are -
Increasing wage structure of Hyundai Elevator
– 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 Hyundai Elevator.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hyundai Elevator in Misc. Capital Goods industry. The Misc. Capital Goods 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.
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 Hyundai Elevator 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 Misc. Capital Goods industry and other sectors.
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.
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 Hyundai Elevator.
Shortening product life cycle
– it is one of the major threat that Hyundai Elevator is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hyundai Elevator can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Hyundai Elevator 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. Hyundai Elevator can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hyundai Elevator 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 Hyundai Elevator prominent markets.
Stagnating economy with rate increase
– Hyundai Elevator 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 Misc. Capital Goods industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Hyundai Elevator with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hyundai Elevator may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Weighted SWOT Analysis of Hyundai Elevator Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hyundai Elevator 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 Hyundai Elevator 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 Hyundai Elevator 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 Hyundai Elevator 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 Hyundai Elevator needs to make to build a sustainable competitive advantage.