SWOT Analysis / TOWS Matrix for Texcell NetCom (South Korea)
Based on various researches at Oak Spring University , Texcell NetCom is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, wage bills are increasing, geopolitical disruptions, there is backlash against globalization, there is increasing trade war between United States & China, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Texcell NetCom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Texcell NetCom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Texcell NetCom 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 Texcell NetCom can be done for the following purposes –
1. Strategic planning of Texcell NetCom
2. Improving business portfolio management of Texcell NetCom
3. Assessing feasibility of the new initiative in South Korea
4. Making a Computer Networks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Texcell NetCom
Strengths of Texcell NetCom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Texcell NetCom are -
Highly skilled collaborators
– Texcell NetCom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Networks industry. Secondly the value chain collaborators of Texcell NetCom have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Computer Networks industry
– Texcell NetCom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Texcell NetCom 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.
Sustainable margins compare to other players in Computer Networks industry
– Texcell NetCom has clearly differentiated products in the market place. This has enabled Texcell NetCom to fetch slight price premium compare to the competitors in the Computer Networks industry. The sustainable margins have also helped Texcell NetCom to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Texcell NetCom is one of the leading players in the Computer Networks 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.
Low bargaining power of suppliers
– Suppliers of Texcell NetCom in the Technology sector have low bargaining power. Texcell NetCom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Texcell NetCom to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Texcell NetCom comprises – understanding the underlying the factors in the Computer Networks 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.
Digital Transformation in Computer Networks industry
- digital transformation varies from industry to industry. For Texcell NetCom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Texcell NetCom 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.
High switching costs
– The high switching costs that Texcell NetCom 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.
Superior customer experience
– The customer experience strategy of Texcell NetCom in Computer Networks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Computer Networks
– Texcell NetCom is one of the leading players in the Computer Networks industry in South Korea. Over the years it has not only transformed the business landscape in the Computer Networks industry in South Korea but also across the existing markets. The ability to lead change has enabled Texcell NetCom 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
– Texcell NetCom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Texcell NetCom 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.
Weaknesses of Texcell NetCom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Texcell NetCom are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Texcell NetCom supply chain. Even after few cautionary changes, Texcell NetCom is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Texcell NetCom vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Texcell NetCom is one of the leading players in the Computer Networks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Networks industry in last five years.
High cash cycle compare to competitors
Texcell NetCom has a high cash cycle compare to other players in the Computer Networks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Texcell NetCom strategy
– From the outside it seems that the employees of Texcell NetCom 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.
High dependence on Texcell NetCom ‘s star products
– The top 2 products and services of Texcell NetCom still accounts for major business revenue. This dependence on star products in Computer Networks industry has resulted into insufficient focus on developing new products, even though Texcell NetCom has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Texcell NetCom is slow explore the new channels of communication. These new channels of communication can help Texcell NetCom to provide better information regarding Computer Networks products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Texcell NetCom 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.
Increasing silos among functional specialists
– The organizational structure of Texcell NetCom is dominated by functional specialists. It is not different from other players in the Computer Networks industry, but Texcell NetCom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Texcell NetCom to focus more on services in the Computer Networks industry rather than just following the product oriented approach.
Lack of clear differentiation of Texcell NetCom products
– To increase the profitability and margins on the products, Texcell NetCom needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Texcell NetCom 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.
Workers concerns about automation
– As automation is fast increasing in the Computer Networks industry, Texcell NetCom needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Texcell NetCom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Texcell NetCom are -
Use of Bitcoin and other crypto currencies for transactions in Computer Networks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Texcell NetCom in the Computer Networks industry. Now Texcell NetCom can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Texcell NetCom 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Networks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Texcell NetCom 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. Texcell NetCom 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.
Leveraging digital technologies
– Texcell NetCom 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 Texcell NetCom 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Texcell NetCom 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.
Creating value in data economy
– The success of analytics program of Texcell NetCom has opened avenues for new revenue streams for the organization in Computer Networks industry. This can help Texcell NetCom to build a more holistic ecosystem for Texcell NetCom products in the Computer Networks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Texcell NetCom can use the latest technology developments to improve its manufacturing and designing process in Computer Networks 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Texcell NetCom in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Networks industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Texcell NetCom to increase its market reach. Texcell NetCom 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.
Buying journey improvements
– Texcell NetCom can improve the customer journey of consumers in the Computer Networks 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.
Building a culture of innovation
– managers at Texcell NetCom 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 Computer Networks industry.
Learning at scale
– Online learning technologies has now opened space for Texcell NetCom 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.
Threats Texcell NetCom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Texcell NetCom are -
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. Texcell NetCom 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.
Shortening product life cycle
– it is one of the major threat that Texcell NetCom is facing in Computer Networks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Texcell NetCom.
Consumer confidence and its impact on Texcell NetCom 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 Computer Networks industry and other sectors.
Stagnating economy with rate increase
– Texcell NetCom 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 Computer Networks industry.
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. Texcell NetCom needs to understand the core reasons impacting the Computer Networks industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Texcell NetCom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Texcell NetCom
– 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 Texcell NetCom.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Texcell NetCom 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 Texcell NetCom prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Texcell NetCom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Networks sector.
Technology acceleration in Forth Industrial Revolution
– Texcell NetCom has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, Texcell NetCom needs to keep up with the evolution of technology in the Computer Networks 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.
Environmental challenges
– Texcell NetCom 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. Texcell NetCom can take advantage of this fund but it will also bring new competitors in the Computer Networks industry.
Weighted SWOT Analysis of Texcell NetCom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Texcell NetCom 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 Texcell NetCom 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 Texcell NetCom 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 Texcell NetCom 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 Texcell NetCom needs to make to build a sustainable competitive advantage.
