SWOT Analysis / TOWS Matrix for Daewon Pharm (South Korea)
Based on various researches at Oak Spring University , Daewon Pharm is operating in a macro-environment that has been destablized by – increasing energy prices, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daewon Pharm can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daewon Pharm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daewon Pharm 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 Daewon Pharm can be done for the following purposes –
1. Strategic planning of Daewon Pharm
2. Improving business portfolio management of Daewon Pharm
3. Assessing feasibility of the new initiative in South Korea
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daewon Pharm
Strengths of Daewon Pharm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daewon Pharm are -
Operational resilience
– The operational resilience strategy of Daewon Pharm comprises – understanding the underlying the factors in the Biotechnology & Drugs 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.
Successful track record of launching new products
– Daewon Pharm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daewon Pharm 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.
Effective Research and Development (R&D)
– Daewon Pharm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daewon Pharm staying ahead in the Biotechnology & Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Daewon Pharm is one of the leading players in the Biotechnology & Drugs 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.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– Daewon Pharm has clearly differentiated products in the market place. This has enabled Daewon Pharm to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Daewon Pharm to invest into research and development (R&D) and innovation.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Daewon Pharm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daewon Pharm 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.
High brand equity
– Daewon Pharm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daewon Pharm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Biotechnology & Drugs
– Daewon Pharm is one of the leading players in the Biotechnology & Drugs industry in South Korea. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in South Korea but also across the existing markets. The ability to lead change has enabled Daewon Pharm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Daewon Pharm has one of the best training and development program in Healthcare 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.
Cross disciplinary teams
– Horizontal connected teams at the Daewon Pharm 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.
Strong track record of project management in the Biotechnology & Drugs industry
– Daewon Pharm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Daewon Pharm is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Daewon Pharm 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.
Weaknesses of Daewon Pharm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daewon Pharm are -
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, Daewon Pharm 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.
Increasing silos among functional specialists
– The organizational structure of Daewon Pharm is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Daewon Pharm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daewon Pharm to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of South Korea, Daewon Pharm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Daewon Pharm needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Daewon Pharm can leverage the sales team experience to cultivate customer relationships as Daewon Pharm is planning to shift buying processes online.
High bargaining power of channel partners in Biotechnology & Drugs industry
– because of the regulatory requirements in South Korea, Daewon Pharm 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 Biotechnology & Drugs industry.
High operating costs
– Compare to the competitors, Daewon Pharm has high operating costs in the Biotechnology & Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Daewon Pharm lucrative customers.
Lack of clear differentiation of Daewon Pharm products
– To increase the profitability and margins on the products, Daewon Pharm needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Daewon Pharm ‘s star products
– The top 2 products and services of Daewon Pharm still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though Daewon Pharm has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Daewon Pharm is just above the Biotechnology & 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.
Interest costs
– Compare to the competition, Daewon Pharm 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.
Ability to respond to the competition
– As the decision making is very deliberative at Daewon Pharm, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Daewon Pharm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Daewon Pharm Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daewon Pharm are -
Manufacturing automation
– Daewon Pharm can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & 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.
Buying journey improvements
– Daewon Pharm can improve the customer journey of consumers in the Biotechnology & Drugs 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
– Daewon Pharm 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daewon Pharm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Daewon Pharm 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.
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. Daewon Pharm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daewon Pharm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Daewon Pharm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Daewon Pharm has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Daewon Pharm to build a more holistic ecosystem for Daewon Pharm products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Daewon Pharm to increase its market reach. Daewon Pharm 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.
Using analytics as competitive advantage
– Daewon Pharm has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Daewon Pharm to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daewon Pharm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daewon Pharm is facing challenges because of the dominance of functional experts in the organization. Daewon Pharm can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Daewon Pharm 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.
Threats Daewon Pharm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daewon Pharm are -
Shortening product life cycle
– it is one of the major threat that Daewon Pharm is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Daewon Pharm 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 Biotechnology & Drugs industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daewon Pharm 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 Daewon Pharm 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.
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 Daewon Pharm business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Daewon Pharm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daewon Pharm in Biotechnology & Drugs industry. The Biotechnology & 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.
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. Daewon Pharm 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.
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 Daewon Pharm.
Regulatory challenges
– Daewon Pharm 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 Biotechnology & Drugs industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daewon Pharm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Easy access to finance
– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daewon Pharm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Daewon Pharm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daewon Pharm 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 Daewon Pharm 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 Daewon Pharm 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 Daewon Pharm 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 Daewon Pharm needs to make to build a sustainable competitive advantage.
