SWOT Analysis / TOWS Matrix for Cheil Worldwide (South Korea)
Based on various researches at Oak Spring University , Cheil Worldwide is operating in a macro-environment that has been destablized by – technology disruption, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cheil Worldwide can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cheil Worldwide, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cheil Worldwide 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 Cheil Worldwide can be done for the following purposes –
1. Strategic planning of Cheil Worldwide
2. Improving business portfolio management of Cheil Worldwide
3. Assessing feasibility of the new initiative in South Korea
4. Making a Advertising sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cheil Worldwide
Strengths of Cheil Worldwide | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cheil Worldwide are -
Successful track record of launching new products
– Cheil Worldwide has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cheil Worldwide 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.
Ability to recruit top talent
– Cheil Worldwide is one of the leading players in the Advertising 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.
Learning organization
- Cheil Worldwide 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 Cheil Worldwide is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cheil Worldwide emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Cheil Worldwide is one of the most innovative firm in Advertising sector.
Ability to lead change in Advertising
– Cheil Worldwide is one of the leading players in the Advertising industry in South Korea. Over the years it has not only transformed the business landscape in the Advertising industry in South Korea but also across the existing markets. The ability to lead change has enabled Cheil Worldwide in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Cheil Worldwide has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cheil Worldwide to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Cheil Worldwide is present in almost all the verticals within the Advertising industry. This has provided Cheil Worldwide 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.
Highly skilled collaborators
– Cheil Worldwide has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Advertising industry. Secondly the value chain collaborators of Cheil Worldwide have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Cheil Worldwide in Advertising industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Cheil Worldwide in the Services sector have low bargaining power. Cheil Worldwide has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cheil Worldwide to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Advertising industry
– Cheil Worldwide is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Advertising industry
– Cheil Worldwide has clearly differentiated products in the market place. This has enabled Cheil Worldwide to fetch slight price premium compare to the competitors in the Advertising industry. The sustainable margins have also helped Cheil Worldwide to invest into research and development (R&D) and innovation.
Weaknesses of Cheil Worldwide | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cheil Worldwide are -
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 Cheil Worldwide supply chain. Even after few cautionary changes, Cheil Worldwide is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cheil Worldwide vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Cheil Worldwide has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Advertising industry over the last five years. Cheil Worldwide 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cheil Worldwide is slow explore the new channels of communication. These new channels of communication can help Cheil Worldwide to provide better information regarding Advertising products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Cheil Worldwide needs to have more collaboration between its sales team and marketing team. Sales professionals in the Advertising industry have deep experience in developing customer relationships. Marketing department at Cheil Worldwide can leverage the sales team experience to cultivate customer relationships as Cheil Worldwide is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Cheil Worldwide has high operating costs in the Advertising industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cheil Worldwide lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Advertising industry, Cheil Worldwide 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.
No frontier risks strategy
– From the 10K / annual statement of Cheil Worldwide, it seems that company is thinking out the frontier risks that can impact Advertising 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 cash cycle compare to competitors
Cheil Worldwide has a high cash cycle compare to other players in the Advertising industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Cheil Worldwide 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.
Skills based hiring in Advertising industry
– The stress on hiring functional specialists at Cheil Worldwide 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.
Capital Spending Reduction
– Even during the low interest decade, Cheil Worldwide 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 Advertising industry using digital technology.
Cheil Worldwide Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cheil Worldwide are -
Better consumer reach
– The expansion of the 5G network will help Cheil Worldwide to increase its market reach. Cheil Worldwide 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.
Creating value in data economy
– The success of analytics program of Cheil Worldwide has opened avenues for new revenue streams for the organization in Advertising industry. This can help Cheil Worldwide to build a more holistic ecosystem for Cheil Worldwide products in the Advertising industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Cheil Worldwide 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 Advertising 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, Cheil Worldwide can use these opportunities to build new business models that can help the communities that Cheil Worldwide operates in. Secondly it can use opportunities from government spending in Advertising sector.
Leveraging digital technologies
– Cheil Worldwide 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cheil Worldwide is facing challenges because of the dominance of functional experts in the organization. Cheil Worldwide can utilize new technology in the field of Advertising industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Advertising industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cheil Worldwide in the Advertising industry. Now Cheil Worldwide can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Cheil Worldwide can develop new processes and procedures in Advertising 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.
Buying journey improvements
– Cheil Worldwide can improve the customer journey of consumers in the Advertising 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cheil Worldwide can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cheil Worldwide 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cheil Worldwide 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 Cheil Worldwide to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Advertising industry, but it has also influenced the consumer preferences. Cheil Worldwide can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cheil Worldwide External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cheil Worldwide are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Cheil Worldwide may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Advertising sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cheil Worldwide 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 Cheil Worldwide prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Advertising industry are lowering. It can presents Cheil Worldwide with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Advertising sector.
Shortening product life cycle
– it is one of the major threat that Cheil Worldwide is facing in Advertising sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Cheil Worldwide in the Advertising sector and impact the bottomline of the organization.
Increasing wage structure of Cheil Worldwide
– 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 Cheil Worldwide.
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
– Cheil Worldwide 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. Cheil Worldwide can take advantage of this fund but it will also bring new competitors in the Advertising industry.
Easy access to finance
– Easy access to finance in Advertising industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cheil Worldwide can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Stagnating economy with rate increase
– Cheil Worldwide 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 Advertising industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cheil Worldwide in Advertising industry. The Advertising 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.
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 Cheil Worldwide business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Cheil Worldwide Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cheil Worldwide 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 Cheil Worldwide 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 Cheil Worldwide 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 Cheil Worldwide 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 Cheil Worldwide needs to make to build a sustainable competitive advantage.