SWOT Analysis / TOWS Matrix for Cuckoo Homesys (South Korea)
Based on various researches at Oak Spring University , Cuckoo Homesys is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cuckoo Homesys can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cuckoo Homesys, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cuckoo Homesys 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 Cuckoo Homesys can be done for the following purposes –
1. Strategic planning of Cuckoo Homesys
2. Improving business portfolio management of Cuckoo Homesys
3. Assessing feasibility of the new initiative in South Korea
4. Making a Rental & Leasing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cuckoo Homesys
Strengths of Cuckoo Homesys | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cuckoo Homesys are -
Operational resilience
– The operational resilience strategy of Cuckoo Homesys comprises – understanding the underlying the factors in the Rental & Leasing 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 Cuckoo Homesys 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.
Digital Transformation in Rental & Leasing industry
- digital transformation varies from industry to industry. For Cuckoo Homesys digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cuckoo Homesys 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.
Diverse revenue streams
– Cuckoo Homesys is present in almost all the verticals within the Rental & Leasing industry. This has provided Cuckoo Homesys 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.
Strong track record of project management in the Rental & Leasing industry
– Cuckoo Homesys 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 Cuckoo Homesys 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.
Effective Research and Development (R&D)
– Cuckoo Homesys has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cuckoo Homesys staying ahead in the Rental & Leasing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Cuckoo Homesys has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cuckoo Homesys 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.
Organizational Resilience of Cuckoo Homesys
– The covid-19 pandemic has put organizational resilience at the centre of everthing Cuckoo Homesys does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Cuckoo Homesys 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 Cuckoo Homesys is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cuckoo Homesys emphasize – knowledge, initiative, and innovation.
Ability to lead change in Rental & Leasing
– Cuckoo Homesys is one of the leading players in the Rental & Leasing industry in South Korea. Over the years it has not only transformed the business landscape in the Rental & Leasing industry in South Korea but also across the existing markets. The ability to lead change has enabled Cuckoo Homesys in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Cuckoo Homesys is one of the most innovative firm in Rental & Leasing sector.
Weaknesses of Cuckoo Homesys | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cuckoo Homesys are -
Ability to respond to the competition
– As the decision making is very deliberative at Cuckoo Homesys, in the dynamic environment of Rental & Leasing industry it has struggled to respond to the nimble upstart competition. Cuckoo Homesys has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Cuckoo Homesys has a high cash cycle compare to other players in the Rental & Leasing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Rental & Leasing industry
– The stress on hiring functional specialists at Cuckoo Homesys has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Cuckoo Homesys is dominated by functional specialists. It is not different from other players in the Rental & Leasing industry, but Cuckoo Homesys needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cuckoo Homesys to focus more on services in the Rental & Leasing industry rather than just following the product oriented approach.
Employees’ less understanding of Cuckoo Homesys strategy
– From the outside it seems that the employees of Cuckoo Homesys 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.
Low market penetration in new markets
– Outside its home market of South Korea, Cuckoo Homesys needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Cuckoo Homesys has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Rental & Leasing industry over the last five years. Cuckoo Homesys 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.
Slow to strategic competitive environment developments
– As Cuckoo Homesys is one of the leading players in the Rental & Leasing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Rental & Leasing industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Cuckoo Homesys, it seems that company is thinking out the frontier risks that can impact Rental & Leasing 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.
Interest costs
– Compare to the competition, Cuckoo Homesys 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cuckoo Homesys is slow explore the new channels of communication. These new channels of communication can help Cuckoo Homesys to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.
Cuckoo Homesys Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cuckoo Homesys are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Cuckoo Homesys 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 Cuckoo Homesys has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help Cuckoo Homesys to build a more holistic ecosystem for Cuckoo Homesys products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, 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 Cuckoo Homesys 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cuckoo Homesys 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 Cuckoo Homesys to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Cuckoo Homesys can improve the customer journey of consumers in the Rental & Leasing 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.
Loyalty marketing
– Cuckoo Homesys has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cuckoo Homesys can use these opportunities to build new business models that can help the communities that Cuckoo Homesys operates in. Secondly it can use opportunities from government spending in Rental & Leasing sector.
Using analytics as competitive advantage
– Cuckoo Homesys has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Rental & Leasing sector. This continuous investment in analytics has enabled Cuckoo Homesys to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cuckoo Homesys to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Cuckoo Homesys can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Cuckoo Homesys can develop new processes and procedures in Rental & Leasing 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.
Building a culture of innovation
– managers at Cuckoo Homesys 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 Rental & Leasing industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cuckoo Homesys 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 Cuckoo Homesys to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cuckoo Homesys can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Cuckoo Homesys External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cuckoo Homesys are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cuckoo Homesys business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Rental & Leasing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cuckoo Homesys can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Cuckoo Homesys needs to understand the core reasons impacting the Rental & Leasing industry. This will help it in building a better workplace.
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 Cuckoo Homesys.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cuckoo Homesys in Rental & Leasing industry. The Rental & Leasing 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.
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 Cuckoo Homesys
– 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 Cuckoo Homesys.
High dependence on third party suppliers
– Cuckoo Homesys 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Cuckoo Homesys may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Rental & Leasing sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cuckoo Homesys 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 Cuckoo Homesys prominent markets.
Regulatory challenges
– Cuckoo Homesys 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 Rental & Leasing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Rental & Leasing industry are lowering. It can presents Cuckoo Homesys with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.
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.
Weighted SWOT Analysis of Cuckoo Homesys Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys needs to make to build a sustainable competitive advantage.