SWOT Analysis / TOWS Matrix for Hanwha Timewor (South Korea)
Based on various researches at Oak Spring University , Hanwha Timewor is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing energy prices, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
wage bills are increasing, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hanwha Timewor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hanwha Timewor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hanwha Timewor 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 Hanwha Timewor can be done for the following purposes –
1. Strategic planning of Hanwha Timewor
2. Improving business portfolio management of Hanwha Timewor
3. Assessing feasibility of the new initiative in South Korea
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hanwha Timewor
Strengths of Hanwha Timewor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hanwha Timewor are -
Sustainable margins compare to other players in Retail (Department & Discount) industry
– Hanwha Timewor has clearly differentiated products in the market place. This has enabled Hanwha Timewor to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped Hanwha Timewor to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Hanwha Timewor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hanwha Timewor 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.
Ability to lead change in Retail (Department & Discount)
– Hanwha Timewor is one of the leading players in the Retail (Department & Discount) industry in South Korea. Over the years it has not only transformed the business landscape in the Retail (Department & Discount) industry in South Korea but also across the existing markets. The ability to lead change has enabled Hanwha Timewor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Hanwha Timewor has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Department & Discount) industry. Secondly the value chain collaborators of Hanwha Timewor have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Hanwha Timewor in the Services sector have low bargaining power. Hanwha Timewor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hanwha Timewor to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Hanwha Timewor has one of the best training and development program in Services 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 Retail (Department & Discount) industry
- digital transformation varies from industry to industry. For Hanwha Timewor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hanwha Timewor 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
– Hanwha Timewor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hanwha Timewor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Hanwha Timewor 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 Retail (Department & Discount) 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.
Strong track record of project management in the Retail (Department & Discount) industry
– Hanwha Timewor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Hanwha Timewor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hanwha Timewor staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Hanwha Timewor
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hanwha Timewor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Hanwha Timewor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hanwha Timewor are -
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 Hanwha Timewor supply chain. Even after few cautionary changes, Hanwha Timewor is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hanwha Timewor vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Hanwha Timewor is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but Hanwha Timewor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hanwha Timewor to focus more on services in the Retail (Department & Discount) industry rather than just following the product oriented approach.
Lack of clear differentiation of Hanwha Timewor products
– To increase the profitability and margins on the products, Hanwha Timewor needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Hanwha Timewor has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Department & Discount) industry over the last five years. Hanwha Timewor 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.
Ability to respond to the competition
– As the decision making is very deliberative at Hanwha Timewor, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. Hanwha Timewor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Hanwha Timewor ‘s star products
– The top 2 products and services of Hanwha Timewor still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though Hanwha Timewor has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Hanwha Timewor 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.
High bargaining power of channel partners in Retail (Department & Discount) industry
– because of the regulatory requirements in South Korea, Hanwha Timewor 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 Retail (Department & Discount) industry.
No frontier risks strategy
– From the 10K / annual statement of Hanwha Timewor, it seems that company is thinking out the frontier risks that can impact Retail (Department & Discount) 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.
Low market penetration in new markets
– Outside its home market of South Korea, Hanwha Timewor needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Retail (Department & Discount) industry
– The stress on hiring functional specialists at Hanwha Timewor 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.
Hanwha Timewor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hanwha Timewor are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Hanwha Timewor 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.
Learning at scale
– Online learning technologies has now opened space for Hanwha Timewor to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hanwha Timewor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Department & Discount) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hanwha Timewor 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. Hanwha Timewor 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hanwha Timewor in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Department & Discount) industry, and it will provide faster access to the consumers.
Loyalty marketing
– Hanwha Timewor 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
– Hanwha Timewor has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled Hanwha Timewor to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hanwha Timewor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hanwha Timewor 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 Hanwha Timewor to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Retail (Department & Discount) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hanwha Timewor in the Retail (Department & Discount) industry. Now Hanwha Timewor can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Hanwha Timewor can use the latest technology developments to improve its manufacturing and designing process in Retail (Department & Discount) 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 Hanwha Timewor has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help Hanwha Timewor to build a more holistic ecosystem for Hanwha Timewor products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hanwha Timewor is facing challenges because of the dominance of functional experts in the organization. Hanwha Timewor can utilize new technology in the field of Retail (Department & Discount) 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, Hanwha Timewor 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 Hanwha Timewor 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 Hanwha Timewor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hanwha Timewor are -
Technology acceleration in Forth Industrial Revolution
– Hanwha Timewor has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, Hanwha Timewor needs to keep up with the evolution of technology in the Retail (Department & Discount) 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.
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 Hanwha Timewor in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Increasing wage structure of Hanwha Timewor
– 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 Hanwha Timewor.
Shortening product life cycle
– it is one of the major threat that Hanwha Timewor is facing in Retail (Department & Discount) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Hanwha Timewor 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 Retail (Department & Discount) industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hanwha Timewor in Retail (Department & Discount) industry. The Retail (Department & Discount) 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hanwha Timewor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Department & Discount) sector.
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 Hanwha Timewor.
Environmental challenges
– Hanwha Timewor 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. Hanwha Timewor can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hanwha Timewor 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 Hanwha Timewor 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents Hanwha Timewor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
Weighted SWOT Analysis of Hanwha Timewor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hanwha Timewor 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 Hanwha Timewor 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 Hanwha Timewor 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 Hanwha Timewor 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 Hanwha Timewor needs to make to build a sustainable competitive advantage.