SWOT Analysis / TOWS Matrix for Halla Holdings Corp (South Korea)
Based on various researches at Oak Spring University , Halla Holdings Corp is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, geopolitical disruptions, technology disruption, there is backlash against globalization, talent flight as more people leaving formal jobs,
increasing commodity prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Halla Holdings Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Halla Holdings Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Halla Holdings Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Halla Holdings Corp 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 Halla Holdings Corp can be done for the following purposes –
1. Strategic planning of Halla Holdings Corp
2. Improving business portfolio management of Halla Holdings Corp
3. Assessing feasibility of the new initiative in South Korea
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Halla Holdings Corp
Strengths of Halla Holdings Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Halla Holdings Corp are -
Highly skilled collaborators
– Halla Holdings Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Halla Holdings Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Halla Holdings Corp has one of the best training and development program in Consumer Cyclical 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.
Successful track record of launching new products
– Halla Holdings Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Halla Holdings Corp 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.
High brand equity
– Halla Holdings Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Halla Holdings Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Halla Holdings Corp in the Consumer Cyclical sector have low bargaining power. Halla Holdings Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Halla Holdings Corp to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Halla Holdings Corp in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Halla Holdings Corp is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Halla Holdings Corp 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)
– Halla Holdings Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Halla Holdings Corp staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Halla Holdings Corp 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 Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Halla Holdings Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Halla Holdings Corp 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.
Organizational Resilience of Halla Holdings Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Halla Holdings Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Halla Holdings Corp 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 Halla Holdings Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Halla Holdings Corp emphasize – knowledge, initiative, and innovation.
Weaknesses of Halla Holdings Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Halla Holdings Corp are -
No frontier risks strategy
– From the 10K / annual statement of Halla Holdings Corp, it seems that company is thinking out the frontier risks that can impact Auto & Truck Parts 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.
Employees’ less understanding of Halla Holdings Corp strategy
– From the outside it seems that the employees of Halla Holdings Corp 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.
Products dominated business model
– Even though Halla Holdings Corp has some of the most successful models in the Auto & Truck Parts industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Halla Holdings Corp should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Halla Holdings Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Halla Holdings Corp can leverage the sales team experience to cultivate customer relationships as Halla Holdings Corp is planning to shift buying processes online.
High cash cycle compare to competitors
Halla Holdings Corp has a high cash cycle compare to other players in the Auto & Truck Parts 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 Auto & Truck Parts industry
– The stress on hiring functional specialists at Halla Holdings Corp 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.
Ability to respond to the competition
– As the decision making is very deliberative at Halla Holdings Corp, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Halla Holdings Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Halla Holdings Corp 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 Auto & Truck Parts industry using digital technology.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in South Korea, Halla Holdings Corp is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Auto & Truck Parts industry.
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 Halla Holdings Corp supply chain. Even after few cautionary changes, Halla Holdings Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Halla Holdings Corp vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Halla Holdings Corp is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Halla Holdings Corp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Halla Holdings Corp to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Halla Holdings Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Halla Holdings Corp are -
Leveraging digital technologies
– Halla Holdings Corp 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.
Developing new processes and practices
– Halla Holdings Corp can develop new processes and procedures in Auto & Truck Parts 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.
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. Halla Holdings Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Halla Holdings Corp can improve the customer journey of consumers in the Auto & Truck Parts 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Halla Holdings Corp 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 Halla Holdings Corp 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, Halla Holdings Corp can use these opportunities to build new business models that can help the communities that Halla Holdings Corp operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Halla Holdings Corp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Halla Holdings Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Halla Holdings Corp can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Creating value in data economy
– The success of analytics program of Halla Holdings Corp has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Halla Holdings Corp to build a more holistic ecosystem for Halla Holdings Corp products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Halla Holdings Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Halla Holdings Corp is facing challenges because of the dominance of functional experts in the organization. Halla Holdings Corp can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Halla Holdings Corp 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 Halla Holdings Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Halla Holdings Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Halla Holdings Corp are -
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 Halla Holdings Corp.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Halla Holdings Corp 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. Halla Holdings Corp needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
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 Halla Holdings Corp business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Halla Holdings Corp
– 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 Halla Holdings Corp.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Halla Holdings Corp in Auto & Truck Parts industry. The Auto & Truck Parts 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.
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 Halla Holdings Corp in the Auto & Truck Parts sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Halla Holdings Corp can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Auto & Truck Parts industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Halla Holdings Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Halla Holdings Corp 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 Halla Holdings Corp prominent markets.
High dependence on third party suppliers
– Halla Holdings Corp 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.
Environmental challenges
– Halla Holdings Corp 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. Halla Holdings Corp can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Weighted SWOT Analysis of Halla Holdings Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Halla Holdings Corp 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 Halla Holdings Corp 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 Halla Holdings Corp 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 Halla Holdings Corp 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 Halla Holdings Corp needs to make to build a sustainable competitive advantage.