SWOT Analysis / TOWS Matrix for NEPES Advanced Materials (South Korea)
Based on various researches at Oak Spring University , NEPES Advanced Materials is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing energy prices, supply chains are disrupted by pandemic , technology disruption, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of NEPES Advanced Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NEPES Advanced Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NEPES Advanced Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NEPES Advanced Materials 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 NEPES Advanced Materials can be done for the following purposes –
1. Strategic planning of NEPES Advanced Materials
2. Improving business portfolio management of NEPES Advanced Materials
3. Assessing feasibility of the new initiative in South Korea
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NEPES Advanced Materials
Strengths of NEPES Advanced Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NEPES Advanced Materials are -
Low bargaining power of suppliers
– Suppliers of NEPES Advanced Materials in the Basic Materials sector have low bargaining power. NEPES Advanced Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NEPES Advanced Materials to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– NEPES Advanced Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NEPES Advanced Materials 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.
Training and development
– NEPES Advanced Materials has one of the best training and development program in Basic Materials 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.
Digital Transformation in Chemicals - Plastics & Rubber industry
- digital transformation varies from industry to industry. For NEPES Advanced Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NEPES Advanced Materials 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.
Ability to lead change in Chemicals - Plastics & Rubber
– NEPES Advanced Materials is one of the leading players in the Chemicals - Plastics & Rubber industry in South Korea. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in South Korea but also across the existing markets. The ability to lead change has enabled NEPES Advanced Materials in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– NEPES Advanced Materials has clearly differentiated products in the market place. This has enabled NEPES Advanced Materials to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped NEPES Advanced Materials to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– NEPES Advanced Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NEPES Advanced Materials staying ahead in the Chemicals - Plastics & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– NEPES Advanced Materials 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 Chemicals - Plastics & Rubber 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.
Highly skilled collaborators
– NEPES Advanced Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemicals - Plastics & Rubber industry. Secondly the value chain collaborators of NEPES Advanced Materials have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Chemicals - Plastics & Rubber industry
– NEPES Advanced Materials is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that NEPES Advanced Materials 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
- NEPES Advanced Materials 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 NEPES Advanced Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NEPES Advanced Materials emphasize – knowledge, initiative, and innovation.
Weaknesses of NEPES Advanced Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NEPES Advanced Materials are -
Aligning sales with marketing
– From the outside it seems that NEPES Advanced Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at NEPES Advanced Materials can leverage the sales team experience to cultivate customer relationships as NEPES Advanced Materials is planning to shift buying processes online.
High bargaining power of channel partners in Chemicals - Plastics & Rubber industry
– because of the regulatory requirements in South Korea, NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, NEPES Advanced Materials is slow explore the new channels of communication. These new channels of communication can help NEPES Advanced Materials to provide better information regarding Chemicals - Plastics & Rubber products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, NEPES Advanced Materials has high operating costs in the Chemicals - Plastics & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract NEPES Advanced Materials lucrative customers.
Lack of clear differentiation of NEPES Advanced Materials products
– To increase the profitability and margins on the products, NEPES Advanced Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of NEPES Advanced Materials strategy
– From the outside it seems that the employees of NEPES Advanced Materials 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.
High dependence on NEPES Advanced Materials ‘s star products
– The top 2 products and services of NEPES Advanced Materials still accounts for major business revenue. This dependence on star products in Chemicals - Plastics & Rubber industry has resulted into insufficient focus on developing new products, even though NEPES Advanced Materials has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of NEPES Advanced Materials is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but NEPES Advanced Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NEPES Advanced Materials to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Chemicals - Plastics & Rubber industry, NEPES Advanced Materials 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.
Capital Spending Reduction
– Even during the low interest decade, NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at NEPES Advanced Materials, in the dynamic environment of Chemicals - Plastics & Rubber industry it has struggled to respond to the nimble upstart competition. NEPES Advanced Materials has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
NEPES Advanced Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NEPES Advanced Materials are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, NEPES Advanced Materials is facing challenges because of the dominance of functional experts in the organization. NEPES Advanced Materials can utilize new technology in the field of Chemicals - Plastics & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– NEPES Advanced Materials 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.
Better consumer reach
– The expansion of the 5G network will help NEPES Advanced Materials to increase its market reach. NEPES Advanced Materials 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.
Building a culture of innovation
– managers at NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry.
Buying journey improvements
– NEPES Advanced Materials can improve the customer journey of consumers in the Chemicals - Plastics & Rubber 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, NEPES Advanced Materials 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
– NEPES Advanced Materials can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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.
Using analytics as competitive advantage
– NEPES Advanced Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemicals - Plastics & Rubber sector. This continuous investment in analytics has enabled NEPES Advanced Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help NEPES Advanced Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. NEPES Advanced Materials can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of NEPES Advanced Materials has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help NEPES Advanced Materials to build a more holistic ecosystem for NEPES Advanced Materials products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NEPES Advanced Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemicals - Plastics & Rubber industry, and it will provide faster access to the consumers.
Developing new processes and practices
– NEPES Advanced Materials can develop new processes and procedures in Chemicals - Plastics & Rubber 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.
Use of Bitcoin and other crypto currencies for transactions in Chemicals - Plastics & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for NEPES Advanced Materials in the Chemicals - Plastics & Rubber industry. Now NEPES Advanced Materials can target international markets with far fewer capital restrictions requirements than the existing system.
Threats NEPES Advanced Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NEPES Advanced Materials are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NEPES Advanced Materials may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemicals - Plastics & Rubber sector.
Increasing wage structure of NEPES Advanced Materials
– 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 NEPES Advanced Materials.
High dependence on third party suppliers
– NEPES Advanced Materials 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.
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 NEPES Advanced Materials in the Chemicals - Plastics & Rubber sector and impact the bottomline 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 NEPES Advanced Materials in Chemicals - Plastics & Rubber industry. The Chemicals - Plastics & Rubber 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.
Consumer confidence and its impact on NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry and other sectors.
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.
Stagnating economy with rate increase
– NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry.
Regulatory challenges
– NEPES Advanced Materials 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 Chemicals - Plastics & Rubber industry regulations.
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 NEPES Advanced Materials business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– NEPES Advanced Materials 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. NEPES Advanced Materials can take advantage of this fund but it will also bring new competitors in the Chemicals - Plastics & Rubber industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, NEPES Advanced Materials 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 NEPES Advanced Materials prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents NEPES Advanced Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber sector.
Weighted SWOT Analysis of NEPES Advanced Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NEPES Advanced Materials 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 NEPES Advanced Materials 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 NEPES Advanced Materials 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 NEPES Advanced Materials 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 NEPES Advanced Materials needs to make to build a sustainable competitive advantage.