LIG Nex1 Co Ltd (79550) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for LIG Nex1 Co Ltd (South Korea)

Based on various researches at Oak Spring University , LIG Nex1 Co Ltd is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc

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Introduction to SWOT Analysis of LIG Nex1 Co Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that LIG Nex1 Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the LIG Nex1 Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd can be done for the following purposes –
1. Strategic planning of LIG Nex1 Co Ltd
2. Improving business portfolio management of LIG Nex1 Co Ltd
3. Assessing feasibility of the new initiative in South Korea
4. Making a Aerospace & Defense sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of LIG Nex1 Co Ltd

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Strengths of LIG Nex1 Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of LIG Nex1 Co Ltd are -

Analytics focus

– LIG Nex1 Co Ltd 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 Aerospace & Defense 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.

Innovation driven organization

– LIG Nex1 Co Ltd is one of the most innovative firm in Aerospace & Defense sector.

High brand equity

– LIG Nex1 Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled LIG Nex1 Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Strong track record of project management in the Aerospace & Defense industry

– LIG Nex1 Co Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Training and development

– LIG Nex1 Co Ltd 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.

Ability to lead change in Aerospace & Defense

– LIG Nex1 Co Ltd is one of the leading players in the Aerospace & Defense industry in South Korea. Over the years it has not only transformed the business landscape in the Aerospace & Defense industry in South Korea but also across the existing markets. The ability to lead change has enabled LIG Nex1 Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Low bargaining power of suppliers

– Suppliers of LIG Nex1 Co Ltd in the Capital Goods sector have low bargaining power. LIG Nex1 Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps LIG Nex1 Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– LIG Nex1 Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – LIG Nex1 Co Ltd staying ahead in the Aerospace & Defense industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– LIG Nex1 Co Ltd is present in almost all the verticals within the Aerospace & Defense industry. This has provided LIG Nex1 Co Ltd 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.

Successful track record of launching new products

– LIG Nex1 Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. LIG Nex1 Co Ltd 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.

Learning organization

- LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at LIG Nex1 Co Ltd emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the LIG Nex1 Co Ltd 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.

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Weaknesses of LIG Nex1 Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of LIG Nex1 Co Ltd are -

No frontier risks strategy

– From the 10K / annual statement of LIG Nex1 Co Ltd, it seems that company is thinking out the frontier risks that can impact Aerospace & Defense 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.

Need for greater diversity

– LIG Nex1 Co Ltd 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.

Aligning sales with marketing

– From the outside it seems that LIG Nex1 Co Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Aerospace & Defense industry have deep experience in developing customer relationships. Marketing department at LIG Nex1 Co Ltd can leverage the sales team experience to cultivate customer relationships as LIG Nex1 Co Ltd is planning to shift buying processes online.

Workers concerns about automation

– As automation is fast increasing in the Aerospace & Defense industry, LIG Nex1 Co Ltd 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.

Interest costs

– Compare to the competition, LIG Nex1 Co Ltd 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.

High dependence on LIG Nex1 Co Ltd ‘s star products

– The top 2 products and services of LIG Nex1 Co Ltd still accounts for major business revenue. This dependence on star products in Aerospace & Defense industry has resulted into insufficient focus on developing new products, even though LIG Nex1 Co Ltd has relatively successful track record of launching new products.

Slow to strategic competitive environment developments

– As LIG Nex1 Co Ltd is one of the leading players in the Aerospace & Defense industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Aerospace & Defense industry in last five years.

Low market penetration in new markets

– Outside its home market of South Korea, LIG Nex1 Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Increasing silos among functional specialists

– The organizational structure of LIG Nex1 Co Ltd is dominated by functional specialists. It is not different from other players in the Aerospace & Defense industry, but LIG Nex1 Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help LIG Nex1 Co Ltd to focus more on services in the Aerospace & Defense industry rather than just following the product oriented approach.

High operating costs

– Compare to the competitors, LIG Nex1 Co Ltd has high operating costs in the Aerospace & Defense industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract LIG Nex1 Co Ltd lucrative customers.

Skills based hiring in Aerospace & Defense industry

– The stress on hiring functional specialists at LIG Nex1 Co Ltd 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.

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LIG Nex1 Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of LIG Nex1 Co Ltd are -

Developing new processes and practices

– LIG Nex1 Co Ltd can develop new processes and procedures in Aerospace & Defense 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, LIG Nex1 Co Ltd 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.

Loyalty marketing

– LIG Nex1 Co Ltd 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects LIG Nex1 Co Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

– The success of analytics program of LIG Nex1 Co Ltd has opened avenues for new revenue streams for the organization in Aerospace & Defense industry. This can help LIG Nex1 Co Ltd to build a more holistic ecosystem for LIG Nex1 Co Ltd products in the Aerospace & Defense industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for LIG Nex1 Co Ltd 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. LIG Nex1 Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, LIG Nex1 Co Ltd is facing challenges because of the dominance of functional experts in the organization. LIG Nex1 Co Ltd can utilize new technology in the field of Aerospace & Defense industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Using analytics as competitive advantage

– LIG Nex1 Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Aerospace & Defense sector. This continuous investment in analytics has enabled LIG Nex1 Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help LIG Nex1 Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, LIG Nex1 Co Ltd can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help LIG Nex1 Co Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Building a culture of innovation

– managers at LIG Nex1 Co Ltd 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 Aerospace & Defense industry.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, LIG Nex1 Co Ltd can use these opportunities to build new business models that can help the communities that LIG Nex1 Co Ltd operates in. Secondly it can use opportunities from government spending in Aerospace & Defense sector.

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Threats LIG Nex1 Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of LIG Nex1 Co Ltd are -

Easy access to finance

– Easy access to finance in Aerospace & Defense industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. LIG Nex1 Co Ltd 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.

Environmental challenges

– LIG Nex1 Co Ltd 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. LIG Nex1 Co Ltd can take advantage of this fund but it will also bring new competitors in the Aerospace & Defense industry.

Technology acceleration in Forth Industrial Revolution

– LIG Nex1 Co Ltd has witnessed rapid integration of technology during Covid-19 in the Aerospace & Defense industry. As one of the leading players in the industry, LIG Nex1 Co Ltd needs to keep up with the evolution of technology in the Aerospace & Defense 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.

Increasing wage structure of LIG Nex1 Co Ltd

– 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 LIG Nex1 Co Ltd.

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 LIG Nex1 Co Ltd.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Aerospace & Defense industry are lowering. It can presents LIG Nex1 Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Aerospace & Defense sector.

Consumer confidence and its impact on LIG Nex1 Co Ltd 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 Aerospace & Defense industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd prominent markets.

High dependence on third party suppliers

– LIG Nex1 Co Ltd high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

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.

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. LIG Nex1 Co Ltd needs to understand the core reasons impacting the Aerospace & Defense 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 LIG Nex1 Co Ltd in the Aerospace & Defense sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of LIG Nex1 Co Ltd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd 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 LIG Nex1 Co Ltd needs to make to build a sustainable competitive advantage.

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