SM Culture & Contents (48550) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SM Culture & Contents (South Korea)

Based on various researches at Oak Spring University , SM Culture & Contents is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , geopolitical disruptions, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of SM Culture & Contents

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SM Culture & Contents can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SM Culture & Contents, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SM Culture & Contents 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of SM Culture & Contents can be done for the following purposes –
1. Strategic planning of SM Culture & Contents
2. Improving business portfolio management of SM Culture & Contents
3. Assessing feasibility of the new initiative in South Korea
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SM Culture & Contents

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Strengths of SM Culture & Contents | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SM Culture & Contents are -

Effective Research and Development (R&D)

– SM Culture & Contents has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SM Culture & Contents staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– SM Culture & Contents has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of SM Culture & Contents have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to recruit top talent

– SM Culture & Contents is one of the leading players in the Business Services 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.

Organizational Resilience of SM Culture & Contents

– The covid-19 pandemic has put organizational resilience at the centre of everthing SM Culture & Contents does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Diverse revenue streams

– SM Culture & Contents is present in almost all the verticals within the Business Services industry. This has provided SM Culture & Contents 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.

Operational resilience

– The operational resilience strategy of SM Culture & Contents comprises – understanding the underlying the factors in the Business Services 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.

Low bargaining power of suppliers

– Suppliers of SM Culture & Contents in the Services sector have low bargaining power. SM Culture & Contents has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SM Culture & Contents to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of SM Culture & Contents in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Cross disciplinary teams

– Horizontal connected teams at the SM Culture & Contents 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 Business Services industry

– SM Culture & Contents is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- SM Culture & Contents 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 SM Culture & Contents is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SM Culture & Contents emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– SM Culture & Contents has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SM Culture & Contents 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.

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Weaknesses of SM Culture & Contents | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SM Culture & Contents are -

Increasing silos among functional specialists

– The organizational structure of SM Culture & Contents is dominated by functional specialists. It is not different from other players in the Business Services industry, but SM Culture & Contents needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SM Culture & Contents to focus more on services in the Business Services industry rather than just following the product oriented approach.

Products dominated business model

– Even though SM Culture & Contents has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SM Culture & Contents should strive to include more intangible value offerings along with its core products and services.

Capital Spending Reduction

– Even during the low interest decade, SM Culture & Contents 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 Business Services industry using digital technology.

Low market penetration in new markets

– Outside its home market of South Korea, SM Culture & Contents needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Workers concerns about automation

– As automation is fast increasing in the Business Services industry, SM Culture & Contents 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.

Need for greater diversity

– SM Culture & Contents has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow decision making process

– As mentioned earlier in the report, SM Culture & Contents has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. SM Culture & Contents even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

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 SM Culture & Contents supply chain. Even after few cautionary changes, SM Culture & Contents is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SM Culture & Contents vulnerable to further global disruptions in South East Asia.

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at SM Culture & Contents 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.

Lack of clear differentiation of SM Culture & Contents products

– To increase the profitability and margins on the products, SM Culture & Contents needs to provide more differentiated products than what it is currently offering in the marketplace.

Interest costs

– Compare to the competition, SM Culture & Contents 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.

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SM Culture & Contents Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of SM Culture & Contents are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SM Culture & Contents 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 SM Culture & Contents to hire the very best people irrespective of their geographical location.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. SM Culture & Contents can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help SM Culture & Contents to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SM Culture & Contents in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.

Manufacturing automation

– SM Culture & Contents can use the latest technology developments to improve its manufacturing and designing process in Business Services 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, SM Culture & Contents is facing challenges because of the dominance of functional experts in the organization. SM Culture & Contents can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– SM Culture & Contents can improve the customer journey of consumers in the Business Services 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SM Culture & Contents can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. SM Culture & Contents can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Creating value in data economy

– The success of analytics program of SM Culture & Contents has opened avenues for new revenue streams for the organization in Business Services industry. This can help SM Culture & Contents to build a more holistic ecosystem for SM Culture & Contents products in the Business Services 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 SM Culture & Contents to increase its market reach. SM Culture & Contents 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, SM Culture & Contents 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 SM Culture & Contents to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Loyalty marketing

– SM Culture & Contents 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.

Using analytics as competitive advantage

– SM Culture & Contents has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled SM Culture & Contents to build a competitive advantage using analytics. The analytics driven competitive advantage can help SM Culture & Contents to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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Threats SM Culture & Contents External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of SM Culture & Contents are -

Shortening product life cycle

– it is one of the major threat that SM Culture & Contents is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 SM Culture & Contents.

Increasing wage structure of SM Culture & Contents

– 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 SM Culture & Contents.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SM Culture & Contents may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.

Consumer confidence and its impact on SM Culture & Contents 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 Business Services industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– SM Culture & Contents has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, SM Culture & Contents needs to keep up with the evolution of technology in the Business Services 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

– SM Culture & Contents 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.

Regulatory challenges

– SM Culture & Contents 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 Business Services industry regulations.

Stagnating economy with rate increase

– SM Culture & Contents 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 Business Services industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents SM Culture & Contents with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.

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 SM Culture & Contents in the Business Services sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SM Culture & Contents can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– SM Culture & Contents 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. SM Culture & Contents can take advantage of this fund but it will also bring new competitors in the Business Services industry.

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Weighted SWOT Analysis of SM Culture & Contents Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SM Culture & Contents 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 SM Culture & Contents 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 SM Culture & Contents 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 SM Culture & Contents 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 SM Culture & Contents needs to make to build a sustainable competitive advantage.

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