SWOT Analysis / TOWS Matrix for Kolon Industries Inc (South Korea)
Based on various researches at Oak Spring University , Kolon Industries Inc is operating in a macro-environment that has been destablized by – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China, increasing commodity prices, supply chains are disrupted by pandemic , geopolitical disruptions,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Kolon Industries Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kolon Industries Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kolon Industries Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kolon Industries Inc 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 Kolon Industries Inc can be done for the following purposes –
1. Strategic planning of Kolon Industries Inc
2. Improving business portfolio management of Kolon Industries Inc
3. Assessing feasibility of the new initiative in South Korea
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kolon Industries Inc
Strengths of Kolon Industries Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kolon Industries Inc are -
Cross disciplinary teams
– Horizontal connected teams at the Kolon Industries Inc 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.
Diverse revenue streams
– Kolon Industries Inc is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided Kolon Industries Inc 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.
High switching costs
– The high switching costs that Kolon Industries Inc 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.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Kolon Industries Inc has clearly differentiated products in the market place. This has enabled Kolon Industries Inc to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Kolon Industries Inc to invest into research and development (R&D) and innovation.
Learning organization
- Kolon Industries Inc 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 Kolon Industries Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kolon Industries Inc emphasize – knowledge, initiative, and innovation.
High brand equity
– Kolon Industries Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kolon Industries Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Textiles - Non Apparel industry
– Kolon Industries Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Textiles - Non Apparel
– Kolon Industries Inc is one of the leading players in the Textiles - Non Apparel industry in South Korea. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in South Korea but also across the existing markets. The ability to lead change has enabled Kolon Industries Inc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Kolon Industries Inc in the Consumer Cyclical sector have low bargaining power. Kolon Industries Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kolon Industries Inc to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Kolon Industries Inc is one of the leading players in the Textiles - Non Apparel 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.
Organizational Resilience of Kolon Industries Inc
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kolon Industries Inc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Kolon Industries Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of Kolon Industries Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Kolon Industries Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kolon Industries Inc are -
Products dominated business model
– Even though Kolon Industries Inc has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kolon Industries Inc should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Kolon Industries Inc 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.
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 Kolon Industries Inc supply chain. Even after few cautionary changes, Kolon Industries Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kolon Industries Inc vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Kolon Industries Inc, it seems that company is thinking out the frontier risks that can impact Textiles - Non Apparel 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.
Interest costs
– Compare to the competition, Kolon Industries Inc 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.
Need for greater diversity
– Kolon Industries Inc 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.
Slow decision making process
– As mentioned earlier in the report, Kolon Industries Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Textiles - Non Apparel industry over the last five years. Kolon Industries Inc 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 strategic competitive environment developments
– As Kolon Industries Inc is one of the leading players in the Textiles - Non Apparel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Textiles - Non Apparel industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Kolon Industries Inc is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Kolon Industries Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kolon Industries Inc to focus more on services in the Textiles - Non Apparel 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, Kolon Industries Inc is slow explore the new channels of communication. These new channels of communication can help Kolon Industries Inc to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of South Korea, Kolon Industries Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Kolon Industries Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kolon Industries Inc are -
Better consumer reach
– The expansion of the 5G network will help Kolon Industries Inc to increase its market reach. Kolon Industries Inc 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.
Building a culture of innovation
– managers at Kolon Industries Inc 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 Textiles - Non Apparel industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Kolon Industries Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kolon Industries Inc in the Textiles - Non Apparel industry. Now Kolon Industries Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Kolon Industries Inc has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Kolon Industries Inc to build a more holistic ecosystem for Kolon Industries Inc products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Kolon Industries Inc 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kolon Industries Inc 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kolon Industries Inc can use these opportunities to build new business models that can help the communities that Kolon Industries Inc operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kolon Industries Inc 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. Kolon Industries Inc 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.
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. Kolon Industries Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kolon Industries Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kolon Industries Inc is facing challenges because of the dominance of functional experts in the organization. Kolon Industries Inc can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Kolon Industries Inc can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non Apparel 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.
Threats Kolon Industries Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kolon Industries Inc are -
High dependence on third party suppliers
– Kolon Industries Inc 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.
Consumer confidence and its impact on Kolon Industries Inc 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 Textiles - Non Apparel industry and other sectors.
Regulatory challenges
– Kolon Industries Inc 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 Textiles - Non Apparel industry regulations.
Shortening product life cycle
– it is one of the major threat that Kolon Industries Inc is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Kolon Industries Inc
– 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 Kolon Industries Inc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kolon Industries Inc 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 Kolon Industries Inc prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Kolon Industries Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
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 Kolon Industries Inc in the Textiles - Non Apparel sector and impact the bottomline of the organization.
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 Kolon Industries Inc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kolon Industries Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
Technology acceleration in Forth Industrial Revolution
– Kolon Industries Inc has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Kolon Industries Inc needs to keep up with the evolution of technology in the Textiles - Non Apparel 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kolon Industries Inc in Textiles - Non Apparel industry. The Textiles - Non Apparel 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.
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.
Weighted SWOT Analysis of Kolon Industries Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kolon Industries Inc 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 Kolon Industries Inc 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 Kolon Industries Inc 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 Kolon Industries Inc 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 Kolon Industries Inc needs to make to build a sustainable competitive advantage.