SWOT Analysis / TOWS Matrix for Dongkook Pharmaceutical (South Korea)
Based on various researches at Oak Spring University , Dongkook Pharmaceutical is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, challanges to central banks by blockchain based private currencies, technology disruption,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Dongkook Pharmaceutical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dongkook Pharmaceutical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dongkook Pharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dongkook Pharmaceutical 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 Dongkook Pharmaceutical can be done for the following purposes –
1. Strategic planning of Dongkook Pharmaceutical
2. Improving business portfolio management of Dongkook Pharmaceutical
3. Assessing feasibility of the new initiative in South Korea
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dongkook Pharmaceutical
Strengths of Dongkook Pharmaceutical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dongkook Pharmaceutical are -
Digital Transformation in Major Drugs industry
- digital transformation varies from industry to industry. For Dongkook Pharmaceutical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dongkook Pharmaceutical 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.
Learning organization
- Dongkook Pharmaceutical 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 Dongkook Pharmaceutical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dongkook Pharmaceutical emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Major Drugs industry
– Dongkook Pharmaceutical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Major Drugs industry
– Dongkook Pharmaceutical has clearly differentiated products in the market place. This has enabled Dongkook Pharmaceutical to fetch slight price premium compare to the competitors in the Major Drugs industry. The sustainable margins have also helped Dongkook Pharmaceutical to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Dongkook Pharmaceutical is present in almost all the verticals within the Major Drugs industry. This has provided Dongkook Pharmaceutical 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.
Effective Research and Development (R&D)
– Dongkook Pharmaceutical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dongkook Pharmaceutical staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Dongkook Pharmaceutical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Major Drugs industry. Secondly the value chain collaborators of Dongkook Pharmaceutical have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Dongkook Pharmaceutical 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.
Analytics focus
– Dongkook Pharmaceutical 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 Major Drugs 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.
High brand equity
– Dongkook Pharmaceutical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dongkook Pharmaceutical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Dongkook Pharmaceutical
– The covid-19 pandemic has put organizational resilience at the centre of everthing Dongkook Pharmaceutical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Dongkook Pharmaceutical 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.
Weaknesses of Dongkook Pharmaceutical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dongkook Pharmaceutical are -
Workers concerns about automation
– As automation is fast increasing in the Major Drugs industry, Dongkook Pharmaceutical 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.
Lack of clear differentiation of Dongkook Pharmaceutical products
– To increase the profitability and margins on the products, Dongkook Pharmaceutical needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Dongkook Pharmaceutical ‘s star products
– The top 2 products and services of Dongkook Pharmaceutical still accounts for major business revenue. This dependence on star products in Major Drugs industry has resulted into insufficient focus on developing new products, even though Dongkook Pharmaceutical has relatively successful track record of launching new products.
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 Dongkook Pharmaceutical supply chain. Even after few cautionary changes, Dongkook Pharmaceutical is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dongkook Pharmaceutical vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Dongkook Pharmaceutical needs to have more collaboration between its sales team and marketing team. Sales professionals in the Major Drugs industry have deep experience in developing customer relationships. Marketing department at Dongkook Pharmaceutical can leverage the sales team experience to cultivate customer relationships as Dongkook Pharmaceutical is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dongkook Pharmaceutical is slow explore the new channels of communication. These new channels of communication can help Dongkook Pharmaceutical to provide better information regarding Major Drugs products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Dongkook Pharmaceutical, it seems that company is thinking out the frontier risks that can impact Major Drugs 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.
Products dominated business model
– Even though Dongkook Pharmaceutical has some of the most successful models in the Major Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dongkook Pharmaceutical should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Dongkook Pharmaceutical is just above the Major Drugs 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.
Increasing silos among functional specialists
– The organizational structure of Dongkook Pharmaceutical is dominated by functional specialists. It is not different from other players in the Major Drugs industry, but Dongkook Pharmaceutical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dongkook Pharmaceutical to focus more on services in the Major Drugs industry rather than just following the product oriented approach.
Skills based hiring in Major Drugs industry
– The stress on hiring functional specialists at Dongkook Pharmaceutical 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.
Dongkook Pharmaceutical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dongkook Pharmaceutical are -
Developing new processes and practices
– Dongkook Pharmaceutical can develop new processes and procedures in Major Drugs 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Major Drugs industry, but it has also influenced the consumer preferences. Dongkook Pharmaceutical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Dongkook Pharmaceutical 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dongkook Pharmaceutical can use these opportunities to build new business models that can help the communities that Dongkook Pharmaceutical operates in. Secondly it can use opportunities from government spending in Major Drugs sector.
Better consumer reach
– The expansion of the 5G network will help Dongkook Pharmaceutical to increase its market reach. Dongkook Pharmaceutical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dongkook Pharmaceutical 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 Dongkook Pharmaceutical to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Dongkook Pharmaceutical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dongkook Pharmaceutical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dongkook Pharmaceutical 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 Dongkook Pharmaceutical to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dongkook Pharmaceutical 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
– Dongkook Pharmaceutical can use the latest technology developments to improve its manufacturing and designing process in Major Drugs 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.
Use of Bitcoin and other crypto currencies for transactions in Major Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Dongkook Pharmaceutical in the Major Drugs industry. Now Dongkook Pharmaceutical can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Dongkook Pharmaceutical 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 Major Drugs industry.
Threats Dongkook Pharmaceutical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dongkook Pharmaceutical are -
Increasing wage structure of Dongkook Pharmaceutical
– 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 Dongkook Pharmaceutical.
Environmental challenges
– Dongkook Pharmaceutical 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. Dongkook Pharmaceutical can take advantage of this fund but it will also bring new competitors in the Major Drugs industry.
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 Dongkook Pharmaceutical in the Major Drugs sector and impact the bottomline of the organization.
Regulatory challenges
– Dongkook Pharmaceutical 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 Major Drugs industry regulations.
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 Dongkook Pharmaceutical.
Shortening product life cycle
– it is one of the major threat that Dongkook Pharmaceutical is facing in Major Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Dongkook Pharmaceutical has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, Dongkook Pharmaceutical needs to keep up with the evolution of technology in the Major Drugs 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.
High dependence on third party suppliers
– Dongkook Pharmaceutical 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dongkook Pharmaceutical in Major Drugs industry. The Major Drugs 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.
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.
Consumer confidence and its impact on Dongkook Pharmaceutical 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 Major Drugs industry and other sectors.
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 Dongkook Pharmaceutical business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Dongkook Pharmaceutical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dongkook Pharmaceutical 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 Dongkook Pharmaceutical 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 Dongkook Pharmaceutical 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 Dongkook Pharmaceutical 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 Dongkook Pharmaceutical needs to make to build a sustainable competitive advantage.