SWOT Analysis / TOWS Matrix for Organic Tea Cosmetics (South Korea)
Based on various researches at Oak Spring University , Organic Tea Cosmetics is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is backlash against globalization, supply chains are disrupted by pandemic , increasing commodity prices, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Organic Tea Cosmetics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Organic Tea Cosmetics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Organic Tea Cosmetics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Organic Tea Cosmetics 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 Organic Tea Cosmetics can be done for the following purposes –
1. Strategic planning of Organic Tea Cosmetics
2. Improving business portfolio management of Organic Tea Cosmetics
3. Assessing feasibility of the new initiative in South Korea
4. Making a Misc. Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Organic Tea Cosmetics
Strengths of Organic Tea Cosmetics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Organic Tea Cosmetics are -
High switching costs
– The high switching costs that Organic Tea Cosmetics 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.
Cross disciplinary teams
– Horizontal connected teams at the Organic Tea Cosmetics 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.
Learning organization
- Organic Tea Cosmetics 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 Organic Tea Cosmetics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Organic Tea Cosmetics emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Organic Tea Cosmetics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Financial Services industry. Secondly the value chain collaborators of Organic Tea Cosmetics have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Misc. Financial Services industry
– Organic Tea Cosmetics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Organic Tea Cosmetics is one of the most innovative firm in Misc. Financial Services sector.
Sustainable margins compare to other players in Misc. Financial Services industry
– Organic Tea Cosmetics has clearly differentiated products in the market place. This has enabled Organic Tea Cosmetics to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Organic Tea Cosmetics to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Organic Tea Cosmetics is one of the leading players in the Misc. Financial 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.
Analytics focus
– Organic Tea Cosmetics 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 Misc. Financial Services 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.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For Organic Tea Cosmetics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Organic Tea Cosmetics 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.
Organizational Resilience of Organic Tea Cosmetics
– The covid-19 pandemic has put organizational resilience at the centre of everthing Organic Tea Cosmetics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Organic Tea Cosmetics in the Financial sector have low bargaining power. Organic Tea Cosmetics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Organic Tea Cosmetics to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Organic Tea Cosmetics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Organic Tea Cosmetics are -
Lack of clear differentiation of Organic Tea Cosmetics products
– To increase the profitability and margins on the products, Organic Tea Cosmetics needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Organic Tea Cosmetics, in the dynamic environment of Misc. Financial Services industry it has struggled to respond to the nimble upstart competition. Organic Tea Cosmetics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Organic Tea Cosmetics strategy
– From the outside it seems that the employees of Organic Tea Cosmetics 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.
High operating costs
– Compare to the competitors, Organic Tea Cosmetics has high operating costs in the Misc. Financial Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Organic Tea Cosmetics lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Organic Tea Cosmetics 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 Misc. Financial Services industry using digital technology.
High cash cycle compare to competitors
Organic Tea Cosmetics has a high cash cycle compare to other players in the Misc. Financial Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Organic Tea Cosmetics is slow explore the new channels of communication. These new channels of communication can help Organic Tea Cosmetics to provide better information regarding Misc. Financial Services products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, Organic Tea Cosmetics 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 to strategic competitive environment developments
– As Organic Tea Cosmetics is one of the leading players in the Misc. Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Financial Services industry in last five years.
Need for greater diversity
– Organic Tea Cosmetics has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners in Misc. Financial Services industry
– because of the regulatory requirements in South Korea, Organic Tea Cosmetics 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 Misc. Financial Services industry.
Organic Tea Cosmetics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Organic Tea Cosmetics are -
Building a culture of innovation
– managers at Organic Tea Cosmetics 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 Misc. Financial Services industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Organic Tea Cosmetics can use these opportunities to build new business models that can help the communities that Organic Tea Cosmetics operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Organic Tea Cosmetics 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.
Loyalty marketing
– Organic Tea Cosmetics 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.
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. Organic Tea Cosmetics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Organic Tea Cosmetics is facing challenges because of the dominance of functional experts in the organization. Organic Tea Cosmetics can utilize new technology in the field of Misc. Financial Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Organic Tea Cosmetics can develop new processes and procedures in Misc. Financial 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Financial Services industry, but it has also influenced the consumer preferences. Organic Tea Cosmetics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Organic Tea Cosmetics 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. Organic Tea Cosmetics 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.
Manufacturing automation
– Organic Tea Cosmetics can use the latest technology developments to improve its manufacturing and designing process in Misc. Financial 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.
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 Organic Tea Cosmetics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Organic Tea Cosmetics 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 Organic Tea Cosmetics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Misc. Financial Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Organic Tea Cosmetics in the Misc. Financial Services industry. Now Organic Tea Cosmetics can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Organic Tea Cosmetics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Organic Tea Cosmetics are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Organic Tea Cosmetics 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 Organic Tea Cosmetics prominent markets.
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. Organic Tea Cosmetics needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Organic Tea Cosmetics 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Organic Tea Cosmetics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Financial Services 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 Organic Tea Cosmetics.
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 Organic Tea Cosmetics in the Misc. Financial Services sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Organic Tea Cosmetics in Misc. Financial Services industry. The Misc. Financial Services 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.
Stagnating economy with rate increase
– Organic Tea Cosmetics 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 Misc. Financial Services industry.
Consumer confidence and its impact on Organic Tea Cosmetics 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 Misc. Financial Services industry and other sectors.
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.
Shortening product life cycle
– it is one of the major threat that Organic Tea Cosmetics is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Organic Tea Cosmetics 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. Organic Tea Cosmetics can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
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. Organic Tea Cosmetics 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.
Weighted SWOT Analysis of Organic Tea Cosmetics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Organic Tea Cosmetics 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 Organic Tea Cosmetics 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 Organic Tea Cosmetics 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 Organic Tea Cosmetics 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 Organic Tea Cosmetics needs to make to build a sustainable competitive advantage.