SWOT Analysis / TOWS Matrix for Sambon Precision & Electronics (South Korea)
Based on various researches at Oak Spring University , Sambon Precision & Electronics is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, wage bills are increasing, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Sambon Precision & Electronics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sambon Precision & Electronics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sambon Precision & Electronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sambon Precision & Electronics 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 Sambon Precision & Electronics can be done for the following purposes –
1. Strategic planning of Sambon Precision & Electronics
2. Improving business portfolio management of Sambon Precision & Electronics
3. Assessing feasibility of the new initiative in South Korea
4. Making a Audio & Video Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sambon Precision & Electronics
Strengths of Sambon Precision & Electronics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sambon Precision & Electronics are -
Training and development
– Sambon Precision & Electronics has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Sambon Precision & Electronics is one of the most innovative firm in Audio & Video Equipment sector.
Strong track record of project management in the Audio & Video Equipment industry
– Sambon Precision & Electronics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Sambon Precision & Electronics 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.
Ability to recruit top talent
– Sambon Precision & Electronics is one of the leading players in the Audio & Video Equipment 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.
High switching costs
– The high switching costs that Sambon Precision & Electronics 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.
Successful track record of launching new products
– Sambon Precision & Electronics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sambon Precision & Electronics has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Sambon Precision & Electronics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sambon Precision & Electronics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Audio & Video Equipment industry
- digital transformation varies from industry to industry. For Sambon Precision & Electronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sambon Precision & Electronics 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.
Learning organization
- Sambon Precision & Electronics 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 Sambon Precision & Electronics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sambon Precision & Electronics emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Sambon Precision & Electronics in the Consumer Cyclical sector have low bargaining power. Sambon Precision & Electronics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sambon Precision & Electronics to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Sambon Precision & Electronics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Audio & Video Equipment industry. Secondly the value chain collaborators of Sambon Precision & Electronics have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Sambon Precision & Electronics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sambon Precision & Electronics are -
Increasing silos among functional specialists
– The organizational structure of Sambon Precision & Electronics is dominated by functional specialists. It is not different from other players in the Audio & Video Equipment industry, but Sambon Precision & Electronics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sambon Precision & Electronics to focus more on services in the Audio & Video Equipment industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Sambon Precision & Electronics, it seems that company is thinking out the frontier risks that can impact Audio & Video Equipment industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ less understanding of Sambon Precision & Electronics strategy
– From the outside it seems that the employees of Sambon Precision & Electronics 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.
Capital Spending Reduction
– Even during the low interest decade, Sambon Precision & Electronics 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 Audio & Video Equipment industry using digital technology.
High cash cycle compare to competitors
Sambon Precision & Electronics has a high cash cycle compare to other players in the Audio & Video Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Sambon Precision & Electronics is just above the Audio & Video Equipment 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.
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 Sambon Precision & Electronics supply chain. Even after few cautionary changes, Sambon Precision & Electronics is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sambon Precision & Electronics vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Sambon Precision & Electronics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Audio & Video Equipment industry have deep experience in developing customer relationships. Marketing department at Sambon Precision & Electronics can leverage the sales team experience to cultivate customer relationships as Sambon Precision & Electronics is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Sambon Precision & Electronics has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Audio & Video Equipment industry over the last five years. Sambon Precision & Electronics 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.
Slow to strategic competitive environment developments
– As Sambon Precision & Electronics is one of the leading players in the Audio & Video Equipment industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Audio & Video Equipment industry in last five years.
High operating costs
– Compare to the competitors, Sambon Precision & Electronics has high operating costs in the Audio & Video Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sambon Precision & Electronics lucrative customers.
Sambon Precision & Electronics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sambon Precision & Electronics are -
Building a culture of innovation
– managers at Sambon Precision & Electronics 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 Audio & Video Equipment industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sambon Precision & Electronics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Audio & Video Equipment industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sambon Precision & Electronics 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 Sambon Precision & Electronics to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Audio & Video Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sambon Precision & Electronics in the Audio & Video Equipment industry. Now Sambon Precision & Electronics can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sambon Precision & Electronics can use these opportunities to build new business models that can help the communities that Sambon Precision & Electronics operates in. Secondly it can use opportunities from government spending in Audio & Video Equipment sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Audio & Video Equipment industry, but it has also influenced the consumer preferences. Sambon Precision & Electronics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sambon Precision & Electronics 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 Sambon Precision & Electronics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Sambon Precision & Electronics to increase its market reach. Sambon Precision & Electronics 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.
Creating value in data economy
– The success of analytics program of Sambon Precision & Electronics has opened avenues for new revenue streams for the organization in Audio & Video Equipment industry. This can help Sambon Precision & Electronics to build a more holistic ecosystem for Sambon Precision & Electronics products in the Audio & Video Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Sambon Precision & Electronics 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sambon Precision & Electronics 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 Audio & Video Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sambon Precision & Electronics 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. Sambon Precision & Electronics 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.
Loyalty marketing
– Sambon Precision & Electronics 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.
Threats Sambon Precision & Electronics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sambon Precision & Electronics are -
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.
Consumer confidence and its impact on Sambon Precision & Electronics 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 Audio & Video Equipment industry and other sectors.
Increasing wage structure of Sambon Precision & Electronics
– 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 Sambon Precision & Electronics.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Audio & Video Equipment industry are lowering. It can presents Sambon Precision & Electronics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Audio & Video Equipment sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sambon Precision & Electronics in Audio & Video Equipment industry. The Audio & Video Equipment 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sambon Precision & Electronics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Audio & Video Equipment 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 Sambon Precision & Electronics.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sambon Precision & Electronics 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 Sambon Precision & Electronics prominent markets.
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 Sambon Precision & Electronics in the Audio & Video Equipment sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Sambon Precision & Electronics has witnessed rapid integration of technology during Covid-19 in the Audio & Video Equipment industry. As one of the leading players in the industry, Sambon Precision & Electronics needs to keep up with the evolution of technology in the Audio & Video Equipment 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.
Regulatory challenges
– Sambon Precision & Electronics 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 Audio & Video Equipment industry regulations.
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. Sambon Precision & Electronics 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.
Environmental challenges
– Sambon Precision & Electronics 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. Sambon Precision & Electronics can take advantage of this fund but it will also bring new competitors in the Audio & Video Equipment industry.
Weighted SWOT Analysis of Sambon Precision & Electronics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sambon Precision & Electronics 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 Sambon Precision & Electronics 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 Sambon Precision & Electronics 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 Sambon Precision & Electronics 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 Sambon Precision & Electronics needs to make to build a sustainable competitive advantage.