SKC (11790) SWOT Analysis / TOWS Matrix / MBA Resources
Fabricated Plastic & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SKC (South Korea)
Based on various researches at Oak Spring University , SKC is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, technology disruption, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SKC can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SKC, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SKC 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 SKC can be done for the following purposes –
1. Strategic planning of SKC
2. Improving business portfolio management of SKC
3. Assessing feasibility of the new initiative in South Korea
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SKC
Strengths of SKC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SKC are -
Superior customer experience
– The customer experience strategy of SKC in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of SKC
– The covid-19 pandemic has put organizational resilience at the centre of everthing SKC does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– SKC has one of the best training and development program in Basic Materials 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.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For SKC digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SKC 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.
Low bargaining power of suppliers
– Suppliers of SKC in the Basic Materials sector have low bargaining power. SKC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SKC to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- SKC 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 SKC is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SKC emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– SKC has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SKC 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.
Innovation driven organization
– SKC is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Sustainable margins compare to other players in Fabricated Plastic & Rubber industry
– SKC has clearly differentiated products in the market place. This has enabled SKC to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped SKC to invest into research and development (R&D) and innovation.
Strong track record of project management in the Fabricated Plastic & Rubber industry
– SKC is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– SKC 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 Fabricated Plastic & Rubber 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.
Highly skilled collaborators
– SKC has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fabricated Plastic & Rubber industry. Secondly the value chain collaborators of SKC have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of SKC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SKC are -
High dependence on SKC ‘s star products
– The top 2 products and services of SKC still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though SKC has relatively successful track record of launching new products.
Need for greater diversity
– SKC 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.
Lack of clear differentiation of SKC products
– To increase the profitability and margins on the products, SKC needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As SKC is one of the leading players in the Fabricated Plastic & Rubber industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Fabricated Plastic & Rubber industry in last five years.
Compensation and incentives
– The revenue per employee of SKC is just above the Fabricated Plastic & Rubber 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.
Skills based hiring in Fabricated Plastic & Rubber industry
– The stress on hiring functional specialists at SKC 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 SKC supply chain. Even after few cautionary changes, SKC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SKC vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, SKC is slow explore the new channels of communication. These new channels of communication can help SKC to provide better information regarding Fabricated Plastic & Rubber 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, SKC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of SKC strategy
– From the outside it seems that the employees of SKC don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of SKC is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but SKC needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SKC to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
SKC Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SKC are -
Using analytics as competitive advantage
– SKC has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fabricated Plastic & Rubber sector. This continuous investment in analytics has enabled SKC to build a competitive advantage using analytics. The analytics driven competitive advantage can help SKC to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– SKC can develop new processes and procedures in Fabricated Plastic & Rubber 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Fabricated Plastic & Rubber industry, but it has also influenced the consumer preferences. SKC can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SKC to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for SKC to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at SKC 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 Fabricated Plastic & Rubber industry.
Learning at scale
– Online learning technologies has now opened space for SKC to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. SKC can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Fabricated Plastic & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SKC in the Fabricated Plastic & Rubber industry. Now SKC can target international markets with far fewer capital restrictions requirements than the existing system.
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 SKC 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for SKC in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fabricated Plastic & Rubber industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects SKC can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– SKC can improve the customer journey of consumers in the Fabricated Plastic & Rubber 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, SKC is facing challenges because of the dominance of functional experts in the organization. SKC can utilize new technology in the field of Fabricated Plastic & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats SKC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SKC are -
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 SKC.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents SKC with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SKC 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 SKC prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SKC in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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.
Easy access to finance
– Easy access to finance in Fabricated Plastic & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SKC can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of SKC
– 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 SKC.
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. SKC 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 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.
Shortening product life cycle
– it is one of the major threat that SKC is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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
– SKC 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 Fabricated Plastic & Rubber industry.
Technology acceleration in Forth Industrial Revolution
– SKC has witnessed rapid integration of technology during Covid-19 in the Fabricated Plastic & Rubber industry. As one of the leading players in the industry, SKC needs to keep up with the evolution of technology in the Fabricated Plastic & Rubber 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.
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. SKC needs to understand the core reasons impacting the Fabricated Plastic & Rubber industry. This will help it in building a better workplace.
Weighted SWOT Analysis of SKC Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SKC 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 SKC 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 SKC 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 SKC 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 SKC needs to make to build a sustainable competitive advantage.