SWOT Analysis / TOWS Matrix for Halla Eng&Cons (South Korea)
Based on various researches at Oak Spring University , Halla Eng&Cons is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Halla Eng&Cons can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Halla Eng&Cons, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Halla Eng&Cons 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 Halla Eng&Cons can be done for the following purposes –
1. Strategic planning of Halla Eng&Cons
2. Improving business portfolio management of Halla Eng&Cons
3. Assessing feasibility of the new initiative in South Korea
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Halla Eng&Cons
Strengths of Halla Eng&Cons | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Halla Eng&Cons are -
Effective Research and Development (R&D)
– Halla Eng&Cons has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Halla Eng&Cons staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Halla Eng&Cons has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Halla Eng&Cons to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Construction Services
– Halla Eng&Cons is one of the leading players in the Construction Services industry in South Korea. Over the years it has not only transformed the business landscape in the Construction Services industry in South Korea but also across the existing markets. The ability to lead change has enabled Halla Eng&Cons in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Halla Eng&Cons has one of the best training and development program in Capital Goods 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.
High switching costs
– The high switching costs that Halla Eng&Cons 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.
Ability to recruit top talent
– Halla Eng&Cons is one of the leading players in the Construction 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.
Cross disciplinary teams
– Horizontal connected teams at the Halla Eng&Cons 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.
Organizational Resilience of Halla Eng&Cons
– The covid-19 pandemic has put organizational resilience at the centre of everthing Halla Eng&Cons does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Halla Eng&Cons has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Halla Eng&Cons have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Halla Eng&Cons is one of the most innovative firm in Construction Services sector.
Strong track record of project management in the Construction Services industry
– Halla Eng&Cons is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Halla Eng&Cons in the Capital Goods sector have low bargaining power. Halla Eng&Cons has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Halla Eng&Cons to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Halla Eng&Cons | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Halla Eng&Cons are -
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in South Korea, Halla Eng&Cons 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 Construction Services industry.
Interest costs
– Compare to the competition, Halla Eng&Cons 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 Halla Eng&Cons ‘s star products
– The top 2 products and services of Halla Eng&Cons still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Halla Eng&Cons has relatively successful track record of launching new products.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Halla Eng&Cons 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Halla Eng&Cons is slow explore the new channels of communication. These new channels of communication can help Halla Eng&Cons to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Halla Eng&Cons is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
Lack of clear differentiation of Halla Eng&Cons products
– To increase the profitability and margins on the products, Halla Eng&Cons needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Halla Eng&Cons 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.
Slow decision making process
– As mentioned earlier in the report, Halla Eng&Cons has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Halla Eng&Cons 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.
No frontier risks strategy
– From the 10K / annual statement of Halla Eng&Cons, it seems that company is thinking out the frontier risks that can impact Construction Services 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 Halla Eng&Cons strategy
– From the outside it seems that the employees of Halla Eng&Cons 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.
Halla Eng&Cons Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Halla Eng&Cons are -
Learning at scale
– Online learning technologies has now opened space for Halla Eng&Cons 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Halla Eng&Cons can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Halla Eng&Cons 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.
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 Halla Eng&Cons 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.
Leveraging digital technologies
– Halla Eng&Cons 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.
Using analytics as competitive advantage
– Halla Eng&Cons has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Halla Eng&Cons to build a competitive advantage using analytics. The analytics driven competitive advantage can help Halla Eng&Cons to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Halla Eng&Cons is facing challenges because of the dominance of functional experts in the organization. Halla Eng&Cons can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Halla Eng&Cons has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Halla Eng&Cons to build a more holistic ecosystem for Halla Eng&Cons products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Halla Eng&Cons can use these opportunities to build new business models that can help the communities that Halla Eng&Cons operates in. Secondly it can use opportunities from government spending in Construction Services 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. Halla Eng&Cons can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Halla Eng&Cons can use the latest technology developments to improve its manufacturing and designing process in Construction 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.
Developing new processes and practices
– Halla Eng&Cons can develop new processes and procedures in Construction Services 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, Halla Eng&Cons 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.
Threats Halla Eng&Cons External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Halla Eng&Cons are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Halla Eng&Cons may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
Stagnating economy with rate increase
– Halla Eng&Cons 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 Construction Services industry.
Environmental challenges
– Halla Eng&Cons 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. Halla Eng&Cons can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Halla Eng&Cons needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Halla Eng&Cons can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Halla Eng&Cons 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.
Shortening product life cycle
– it is one of the major threat that Halla Eng&Cons is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Halla Eng&Cons with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
Technology acceleration in Forth Industrial Revolution
– Halla Eng&Cons has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Halla Eng&Cons needs to keep up with the evolution of technology in the Construction 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.
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 Halla Eng&Cons in the Construction Services sector and impact the bottomline of the organization.
Regulatory challenges
– Halla Eng&Cons 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 Construction Services industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Halla Eng&Cons 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 Halla Eng&Cons prominent markets.
Weighted SWOT Analysis of Halla Eng&Cons Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Halla Eng&Cons 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 Halla Eng&Cons 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 Halla Eng&Cons 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 Halla Eng&Cons 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 Halla Eng&Cons needs to make to build a sustainable competitive advantage.