Doosan Heavy Ind. & Const. (34020) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Doosan Heavy Ind. & Const. (South Korea)

Based on various researches at Oak Spring University , Doosan Heavy Ind. & Const. is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, cloud computing is disrupting traditional business models, wage bills are increasing, increasing energy prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Doosan Heavy Ind. & Const.

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Doosan Heavy Ind. & Const. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Doosan Heavy Ind. & Const., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Doosan Heavy Ind. & Const. 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Doosan Heavy Ind. & Const. can be done for the following purposes –
1. Strategic planning of Doosan Heavy Ind. & Const.
2. Improving business portfolio management of Doosan Heavy Ind. & Const.
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 Doosan Heavy Ind. & Const.

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Strengths of Doosan Heavy Ind. & Const. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Doosan Heavy Ind. & Const. are -

Operational resilience

– The operational resilience strategy of Doosan Heavy Ind. & Const. 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.

Sustainable margins compare to other players in Misc. Capital Goods industry

– Doosan Heavy Ind. & Const. has clearly differentiated products in the market place. This has enabled Doosan Heavy Ind. & Const. to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Doosan Heavy Ind. & Const. to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– Doosan Heavy Ind. & Const. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Doosan Heavy Ind. & Const. staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Digital Transformation in Misc. Capital Goods industry

- digital transformation varies from industry to industry. For Doosan Heavy Ind. & Const. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Doosan Heavy Ind. & Const. 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.

Organizational Resilience of Doosan Heavy Ind. & Const.

– The covid-19 pandemic has put organizational resilience at the centre of everthing Doosan Heavy Ind. & Const. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to lead change in Misc. Capital Goods

– Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Doosan Heavy Ind. & Const. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. in the Capital Goods sector have low bargaining power. Doosan Heavy Ind. & Const. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Doosan Heavy Ind. & Const. to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Doosan Heavy Ind. & Const. is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. 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.

Training and development

– Doosan Heavy Ind. & Const. has one of the best training and development program in Capital Goods 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 Doosan Heavy Ind. & Const. in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of Doosan Heavy Ind. & Const. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Doosan Heavy Ind. & Const. are -

Compensation and incentives

– The revenue per employee of Doosan Heavy Ind. & Const. 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.

No frontier risks strategy

– From the 10K / annual statement of Doosan Heavy Ind. & Const., 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 cash cycle compare to competitors

Doosan Heavy Ind. & Const. 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.

Skills based hiring in Misc. Capital Goods industry

– The stress on hiring functional specialists at Doosan Heavy Ind. & Const. 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.

Increasing silos among functional specialists

– The organizational structure of Doosan Heavy Ind. & Const. is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Doosan Heavy Ind. & Const. needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Doosan Heavy Ind. & Const. to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.

Products dominated business model

– Even though Doosan Heavy Ind. & Const. has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Doosan Heavy Ind. & Const. should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. lucrative customers.

Lack of clear differentiation of Doosan Heavy Ind. & Const. products

– To increase the profitability and margins on the products, Doosan Heavy Ind. & Const. needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of South Korea, Doosan Heavy Ind. & Const. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Capital Spending Reduction

– Even during the low interest decade, Doosan Heavy Ind. & Const. 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 Misc. Capital Goods industry using digital technology.

Ability to respond to the competition

– As the decision making is very deliberative at Doosan Heavy Ind. & Const., in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Doosan Heavy Ind. & Const. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Doosan Heavy Ind. & Const. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Doosan Heavy Ind. & Const. are -

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 Doosan Heavy Ind. & Const. in the Misc. Capital Goods industry. Now Doosan Heavy Ind. & Const. can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. to build a competitive advantage using analytics. The analytics driven competitive advantage can help Doosan Heavy Ind. & Const. to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Doosan Heavy Ind. & Const. 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 Misc. Capital Goods industry.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Doosan Heavy Ind. & Const. is facing challenges because of the dominance of functional experts in the organization. Doosan Heavy Ind. & Const. can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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. Doosan Heavy Ind. & Const. 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. Doosan Heavy Ind. & Const. 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Doosan Heavy Ind. & Const. can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Doosan Heavy Ind. & Const. can develop new processes and procedures in Misc. Capital Goods 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.

Creating value in data economy

– The success of analytics program of Doosan Heavy Ind. & Const. has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Doosan Heavy Ind. & Const. to build a more holistic ecosystem for Doosan Heavy Ind. & Const. products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Doosan Heavy Ind. & Const. 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.

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. Doosan Heavy Ind. & Const. can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Manufacturing automation

– Doosan Heavy Ind. & Const. 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.

Loyalty marketing

– Doosan Heavy Ind. & Const. 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Doosan Heavy Ind. & Const. can use these opportunities to build new business models that can help the communities that Doosan Heavy Ind. & Const. operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.

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Threats Doosan Heavy Ind. & Const. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Doosan Heavy Ind. & Const. 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. Doosan Heavy Ind. & Const. needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.

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 Doosan Heavy Ind. & Const. in the Misc. Capital Goods 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.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Doosan Heavy Ind. & Const. will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Environmental challenges

– Doosan Heavy Ind. & Const. 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. Doosan Heavy Ind. & Const. can take advantage of this fund but it will also bring new competitors 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 Doosan Heavy Ind. & Const. 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.

Increasing wage structure of Doosan Heavy Ind. & Const.

– 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 Doosan Heavy Ind. & Const..

Consumer confidence and its impact on Doosan Heavy Ind. & Const. 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.

Shortening product life cycle

– it is one of the major threat that Doosan Heavy Ind. & Const. is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Doosan Heavy Ind. & Const. 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Doosan Heavy Ind. & Const. 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.

Technology acceleration in Forth Industrial Revolution

– Doosan Heavy Ind. & Const. has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Doosan Heavy Ind. & Const. needs to keep up with the evolution of technology in the Misc. Capital Goods 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.

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Weighted SWOT Analysis of Doosan Heavy Ind. & Const. Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. needs to make to build a sustainable competitive advantage.

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