Sejin Heavy Industries Co Ltd (75580) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sejin Heavy Industries Co Ltd (South Korea)

Based on various researches at Oak Spring University , Sejin Heavy Industries Co Ltd is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing energy prices, talent flight as more people leaving formal jobs, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Sejin Heavy Industries Co Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sejin Heavy Industries Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sejin Heavy Industries Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd can be done for the following purposes –
1. Strategic planning of Sejin Heavy Industries Co Ltd
2. Improving business portfolio management of Sejin Heavy Industries Co Ltd
3. Assessing feasibility of the new initiative in South Korea
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sejin Heavy Industries Co Ltd

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Strengths of Sejin Heavy Industries Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sejin Heavy Industries Co Ltd are -

Operational resilience

– The operational resilience strategy of Sejin Heavy Industries Co Ltd comprises – understanding the underlying the factors in the Water Transportation 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.

Ability to recruit top talent

– Sejin Heavy Industries Co Ltd is one of the leading players in the Water Transportation 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.

Learning organization

- Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sejin Heavy Industries Co Ltd emphasize – knowledge, initiative, and innovation.

Digital Transformation in Water Transportation industry

- digital transformation varies from industry to industry. For Sejin Heavy Industries Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sejin Heavy Industries Co Ltd 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.

Strong track record of project management in the Water Transportation industry

– Sejin Heavy Industries Co Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Sejin Heavy Industries Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Transportation industry. Secondly the value chain collaborators of Sejin Heavy Industries Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Sejin Heavy Industries Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sejin Heavy Industries Co Ltd staying ahead in the Water Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Sejin Heavy Industries Co Ltd is present in almost all the verticals within the Water Transportation industry. This has provided Sejin Heavy Industries Co Ltd 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.

High switching costs

– The high switching costs that Sejin Heavy Industries Co Ltd 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.

Low bargaining power of suppliers

– Suppliers of Sejin Heavy Industries Co Ltd in the Transportation sector have low bargaining power. Sejin Heavy Industries Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sejin Heavy Industries Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Sejin Heavy Industries Co Ltd has one of the best training and development program in Transportation 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.

Sustainable margins compare to other players in Water Transportation industry

– Sejin Heavy Industries Co Ltd has clearly differentiated products in the market place. This has enabled Sejin Heavy Industries Co Ltd to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Sejin Heavy Industries Co Ltd to invest into research and development (R&D) and innovation.

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Weaknesses of Sejin Heavy Industries Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sejin Heavy Industries Co Ltd are -

High dependence on Sejin Heavy Industries Co Ltd ‘s star products

– The top 2 products and services of Sejin Heavy Industries Co Ltd still accounts for major business revenue. This dependence on star products in Water Transportation industry has resulted into insufficient focus on developing new products, even though Sejin Heavy Industries Co Ltd has relatively successful track record of launching new products.

Low market penetration in new markets

– Outside its home market of South Korea, Sejin Heavy Industries Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High cash cycle compare to competitors

Sejin Heavy Industries Co Ltd has a high cash cycle compare to other players in the Water Transportation industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High operating costs

– Compare to the competitors, Sejin Heavy Industries Co Ltd has high operating costs in the Water Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sejin Heavy Industries Co Ltd lucrative customers.

Products dominated business model

– Even though Sejin Heavy Industries Co Ltd has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sejin Heavy Industries Co Ltd should strive to include more intangible value offerings along with its core products and services.

Ability to respond to the competition

– As the decision making is very deliberative at Sejin Heavy Industries Co Ltd, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Sejin Heavy Industries Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Interest costs

– Compare to the competition, Sejin Heavy Industries Co Ltd 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 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 Sejin Heavy Industries Co Ltd supply chain. Even after few cautionary changes, Sejin Heavy Industries Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sejin Heavy Industries Co Ltd vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Sejin Heavy Industries Co Ltd, it seems that company is thinking out the frontier risks that can impact Water Transportation 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sejin Heavy Industries Co Ltd is slow explore the new channels of communication. These new channels of communication can help Sejin Heavy Industries Co Ltd to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.

Capital Spending Reduction

– Even during the low interest decade, Sejin Heavy Industries Co Ltd 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 Water Transportation industry using digital technology.

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Sejin Heavy Industries Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sejin Heavy Industries Co Ltd are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Sejin Heavy Industries Co Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Transportation industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Sejin Heavy Industries Co Ltd has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Sejin Heavy Industries Co Ltd to build a more holistic ecosystem for Sejin Heavy Industries Co Ltd products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd to increase its market reach. Sejin Heavy Industries Co Ltd 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sejin Heavy Industries Co Ltd can use these opportunities to build new business models that can help the communities that Sejin Heavy Industries Co Ltd operates in. Secondly it can use opportunities from government spending in Water Transportation sector.

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. Sejin Heavy Industries Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Sejin Heavy Industries Co Ltd 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.

Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sejin Heavy Industries Co Ltd in the Water Transportation industry. Now Sejin Heavy Industries Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– Sejin Heavy Industries Co Ltd can improve the customer journey of consumers in the Water Transportation 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.

Developing new processes and practices

– Sejin Heavy Industries Co Ltd can develop new processes and procedures in Water Transportation 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Sejin Heavy Industries Co Ltd 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Water Transportation industry, but it has also influenced the consumer preferences. Sejin Heavy Industries Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Leveraging digital technologies

– Sejin Heavy Industries Co Ltd can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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Threats Sejin Heavy Industries Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sejin Heavy Industries Co Ltd are -

Technology acceleration in Forth Industrial Revolution

– Sejin Heavy Industries Co Ltd has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Sejin Heavy Industries Co Ltd needs to keep up with the evolution of technology in the Water Transportation 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.

Increasing wage structure of Sejin Heavy Industries Co Ltd

– 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 Sejin Heavy Industries Co Ltd.

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. Sejin Heavy Industries Co Ltd 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.

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.

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 Sejin Heavy Industries Co Ltd.

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 Sejin Heavy Industries Co Ltd 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 Water Transportation industry and other sectors.

Shortening product life cycle

– it is one of the major threat that Sejin Heavy Industries Co Ltd is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd prominent markets.

Environmental challenges

– Sejin Heavy Industries Co Ltd 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. Sejin Heavy Industries Co Ltd can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.

High dependence on third party suppliers

– Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd in the Water Transportation sector and impact the bottomline of the organization.

Regulatory challenges

– Sejin Heavy Industries Co Ltd 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 Water Transportation industry regulations.

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Weighted SWOT Analysis of Sejin Heavy Industries Co Ltd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd 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 Sejin Heavy Industries Co Ltd needs to make to build a sustainable competitive advantage.

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