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 – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, 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 -

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.

Learning organization

- Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Doosan Heavy Ind. & Const. emphasize – knowledge, initiative, and innovation.

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.

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.

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.

Highly skilled collaborators

– Doosan Heavy Ind. & Const. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Doosan Heavy Ind. & Const. have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

Cross disciplinary teams

– Horizontal connected teams at the Doosan Heavy Ind. & Const. 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.

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.

Analytics focus

– Doosan Heavy Ind. & Const. 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.

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.

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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 -

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.

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.

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.

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.

Slow decision making process

– As mentioned earlier in the report, Doosan Heavy Ind. & Const. 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. Doosan Heavy Ind. & Const. 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.

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.

Need for greater diversity

– Doosan Heavy Ind. & Const. 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.

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Doosan Heavy Ind. & Const. is slow explore the new channels of communication. These new channels of communication can help Doosan Heavy Ind. & Const. to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.

Interest costs

– Compare to the competition, Doosan Heavy Ind. & Const. 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.

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 -

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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Doosan Heavy Ind. & Const. 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.

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.

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.

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.

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.

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.

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.

Leveraging digital technologies

– Doosan Heavy Ind. & Const. 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.

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 Doosan Heavy Ind. & Const. 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.

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.

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.

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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 -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Doosan Heavy Ind. & Const. 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 Doosan Heavy Ind. & Const. prominent markets.

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.

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.

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..

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.

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.

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 Doosan Heavy Ind. & Const..

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.

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.

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. Doosan Heavy Ind. & Const. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

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.

Regulatory challenges

– Doosan Heavy Ind. & Const. 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 Misc. Capital Goods industry regulations.

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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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