Yuanta Sec Kor (3470) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Yuanta Sec Kor (South Korea)

Based on various researches at Oak Spring University , Yuanta Sec Kor is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Yuanta Sec Kor

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

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Strengths of Yuanta Sec Kor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Yuanta Sec Kor are -

Organizational Resilience of Yuanta Sec Kor

– The covid-19 pandemic has put organizational resilience at the centre of everthing Yuanta Sec Kor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Yuanta Sec Kor in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Yuanta Sec Kor 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.

Ability to recruit top talent

– Yuanta Sec Kor is one of the leading players in the Investment Services 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.

High brand equity

– Yuanta Sec Kor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yuanta Sec Kor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Strong track record of project management in the Investment Services industry

– Yuanta Sec Kor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– Yuanta Sec Kor is one of the most innovative firm in Investment Services sector.

Effective Research and Development (R&D)

– Yuanta Sec Kor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Yuanta Sec Kor staying ahead in the Investment Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Sustainable margins compare to other players in Investment Services industry

– Yuanta Sec Kor has clearly differentiated products in the market place. This has enabled Yuanta Sec Kor to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped Yuanta Sec Kor to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Yuanta Sec Kor has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Investment Services industry. Secondly the value chain collaborators of Yuanta Sec Kor have helped the firm to develop new products and bring them quickly to the marketplace.

Successful track record of launching new products

– Yuanta Sec Kor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yuanta Sec Kor 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.

Diverse revenue streams

– Yuanta Sec Kor is present in almost all the verticals within the Investment Services industry. This has provided Yuanta Sec Kor 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.

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Weaknesses of Yuanta Sec Kor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Yuanta Sec Kor are -

Need for greater diversity

– Yuanta Sec Kor 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.

Interest costs

– Compare to the competition, Yuanta Sec Kor 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.

Aligning sales with marketing

– From the outside it seems that Yuanta Sec Kor needs to have more collaboration between its sales team and marketing team. Sales professionals in the Investment Services industry have deep experience in developing customer relationships. Marketing department at Yuanta Sec Kor can leverage the sales team experience to cultivate customer relationships as Yuanta Sec Kor is planning to shift buying processes online.

Increasing silos among functional specialists

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

Ability to respond to the competition

– As the decision making is very deliberative at Yuanta Sec Kor, in the dynamic environment of Investment Services industry it has struggled to respond to the nimble upstart competition. Yuanta Sec Kor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Lack of clear differentiation of Yuanta Sec Kor products

– To increase the profitability and margins on the products, Yuanta Sec Kor needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow decision making process

– As mentioned earlier in the report, Yuanta Sec Kor has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Investment Services industry over the last five years. Yuanta Sec Kor 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.

No frontier risks strategy

– From the 10K / annual statement of Yuanta Sec Kor, it seems that company is thinking out the frontier risks that can impact Investment Services 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.

Skills based hiring in Investment Services industry

– The stress on hiring functional specialists at Yuanta Sec Kor 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 Yuanta Sec Kor ‘s star products

– The top 2 products and services of Yuanta Sec Kor still accounts for major business revenue. This dependence on star products in Investment Services industry has resulted into insufficient focus on developing new products, even though Yuanta Sec Kor has relatively successful track record of launching new products.

Compensation and incentives

– The revenue per employee of Yuanta Sec Kor is just above the Investment Services 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.

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Yuanta Sec Kor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Yuanta Sec Kor are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yuanta Sec Kor 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 Yuanta Sec Kor to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yuanta Sec Kor can use these opportunities to build new business models that can help the communities that Yuanta Sec Kor operates in. Secondly it can use opportunities from government spending in Investment Services sector.

Use of Bitcoin and other crypto currencies for transactions in Investment Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Yuanta Sec Kor in the Investment Services industry. Now Yuanta Sec Kor can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Yuanta Sec Kor can develop new processes and procedures in Investment Services 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Yuanta Sec Kor 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 Yuanta Sec Kor to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Yuanta Sec Kor has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Yuanta Sec Kor to build a more holistic ecosystem for Yuanta Sec Kor products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Low interest rates

– Even though inflation is raising its head in most developed economies, Yuanta Sec Kor 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Yuanta Sec Kor 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. Yuanta Sec Kor 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

– Yuanta Sec Kor 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.

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. Yuanta Sec Kor can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Yuanta Sec Kor 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 Investment Services industry.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Investment Services industry, but it has also influenced the consumer preferences. Yuanta Sec Kor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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Threats Yuanta Sec Kor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Yuanta Sec Kor 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. Yuanta Sec Kor 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.

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 Yuanta Sec Kor in the Investment Services sector and impact the bottomline 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. Yuanta Sec Kor needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Yuanta Sec Kor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Investment Services sector.

High dependence on third party suppliers

– Yuanta Sec Kor 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.

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 Yuanta Sec Kor business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Yuanta Sec Kor

– 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 Yuanta Sec Kor.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Yuanta Sec Kor in Investment Services industry. The Investment Services 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Yuanta Sec Kor 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 Yuanta Sec Kor prominent markets.

Easy access to finance

– Easy access to finance in Investment Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Yuanta Sec Kor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Yuanta Sec Kor has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Yuanta Sec Kor needs to keep up with the evolution of technology in the Investment Services 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.

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.

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.

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Weighted SWOT Analysis of Yuanta Sec Kor Template, Example

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

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