SWOT Analysis / TOWS Matrix for Hankuk Glass (South Korea)
Based on various researches at Oak Spring University , Hankuk Glass is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing commodity prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, geopolitical disruptions,
technology disruption, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hankuk Glass can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hankuk Glass, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hankuk Glass 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 Hankuk Glass can be done for the following purposes –
1. Strategic planning of Hankuk Glass
2. Improving business portfolio management of Hankuk Glass
3. Assessing feasibility of the new initiative in South Korea
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hankuk Glass
Strengths of Hankuk Glass | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hankuk Glass are -
Diverse revenue streams
– Hankuk Glass is present in almost all the verticals within the Constr. - Supplies & Fixtures industry. This has provided Hankuk Glass 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.
Cross disciplinary teams
– Horizontal connected teams at the Hankuk Glass 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.
High brand equity
– Hankuk Glass has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hankuk Glass to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Hankuk Glass is one of the leading players in the Constr. - Supplies & Fixtures 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 switching costs
– The high switching costs that Hankuk Glass 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.
Learning organization
- Hankuk Glass 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 Hankuk Glass is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hankuk Glass emphasize – knowledge, initiative, and innovation.
Training and development
– Hankuk Glass 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.
Strong track record of project management in the Constr. - Supplies & Fixtures industry
– Hankuk Glass is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Constr. - Supplies & Fixtures industry
- digital transformation varies from industry to industry. For Hankuk Glass digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hankuk Glass 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 Hankuk Glass in the Capital Goods sector have low bargaining power. Hankuk Glass has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hankuk Glass to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Hankuk Glass
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hankuk Glass does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Hankuk Glass 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 Constr. - Supplies & Fixtures 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.
Weaknesses of Hankuk Glass | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hankuk Glass are -
Products dominated business model
– Even though Hankuk Glass has some of the most successful models in the Constr. - Supplies & Fixtures industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hankuk Glass should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Hankuk Glass is dominated by functional specialists. It is not different from other players in the Constr. - Supplies & Fixtures industry, but Hankuk Glass needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hankuk Glass to focus more on services in the Constr. - Supplies & Fixtures industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Hankuk Glass is one of the leading players in the Constr. - Supplies & Fixtures industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Constr. - Supplies & Fixtures industry in last five years.
Low market penetration in new markets
– Outside its home market of South Korea, Hankuk Glass needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Hankuk Glass products
– To increase the profitability and margins on the products, Hankuk Glass needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Hankuk Glass 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.
Compensation and incentives
– The revenue per employee of Hankuk Glass is just above the Constr. - Supplies & Fixtures 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.
Need for greater diversity
– Hankuk Glass 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.
High operating costs
– Compare to the competitors, Hankuk Glass has high operating costs in the Constr. - Supplies & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hankuk Glass lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Hankuk Glass has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Constr. - Supplies & Fixtures industry using digital technology.
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 Hankuk Glass supply chain. Even after few cautionary changes, Hankuk Glass is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hankuk Glass vulnerable to further global disruptions in South East Asia.
Hankuk Glass Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hankuk Glass are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Constr. - Supplies & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hankuk Glass 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. Hankuk Glass 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hankuk Glass can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Hankuk Glass 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 Constr. - Supplies & Fixtures industry.
Leveraging digital technologies
– Hankuk Glass 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hankuk Glass 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 Hankuk Glass to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hankuk Glass can use these opportunities to build new business models that can help the communities that Hankuk Glass operates in. Secondly it can use opportunities from government spending in Constr. - Supplies & Fixtures sector.
Loyalty marketing
– Hankuk Glass 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hankuk Glass 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.
Manufacturing automation
– Hankuk Glass can use the latest technology developments to improve its manufacturing and designing process in Constr. - Supplies & Fixtures 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.
Better consumer reach
– The expansion of the 5G network will help Hankuk Glass to increase its market reach. Hankuk Glass 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.
Use of Bitcoin and other crypto currencies for transactions in Constr. - Supplies & Fixtures industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hankuk Glass in the Constr. - Supplies & Fixtures industry. Now Hankuk Glass can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Hankuk Glass has opened avenues for new revenue streams for the organization in Constr. - Supplies & Fixtures industry. This can help Hankuk Glass to build a more holistic ecosystem for Hankuk Glass products in the Constr. - Supplies & Fixtures industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hankuk Glass is facing challenges because of the dominance of functional experts in the organization. Hankuk Glass can utilize new technology in the field of Constr. - Supplies & Fixtures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Hankuk Glass External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hankuk Glass are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hankuk Glass 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 Hankuk Glass prominent markets.
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.
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 Hankuk Glass in the Constr. - Supplies & Fixtures sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Hankuk Glass is facing in Constr. - Supplies & Fixtures sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Hankuk Glass 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 Constr. - Supplies & Fixtures industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hankuk Glass in Constr. - Supplies & Fixtures industry. The Constr. - Supplies & Fixtures 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.
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 Hankuk Glass business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Hankuk Glass 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 Constr. - Supplies & Fixtures industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents Hankuk Glass with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures sector.
Increasing wage structure of Hankuk Glass
– 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 Hankuk Glass.
Technology acceleration in Forth Industrial Revolution
– Hankuk Glass has witnessed rapid integration of technology during Covid-19 in the Constr. - Supplies & Fixtures industry. As one of the leading players in the industry, Hankuk Glass needs to keep up with the evolution of technology in the Constr. - Supplies & Fixtures 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.
Easy access to finance
– Easy access to finance in Constr. - Supplies & Fixtures industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hankuk Glass 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. Hankuk Glass needs to understand the core reasons impacting the Constr. - Supplies & Fixtures industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Hankuk Glass Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hankuk Glass 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 Hankuk Glass 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 Hankuk Glass 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 Hankuk Glass 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 Hankuk Glass needs to make to build a sustainable competitive advantage.