Home Center Hlds (60560) SWOT Analysis / TOWS Matrix / MBA Resources
Construction - Raw Materials
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Home Center Hlds (South Korea)
Based on various researches at Oak Spring University , Home Center Hlds is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, 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 Home Center Hlds can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Home Center Hlds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Home Center Hlds 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 Home Center Hlds can be done for the following purposes –
1. Strategic planning of Home Center Hlds
2. Improving business portfolio management of Home Center Hlds
3. Assessing feasibility of the new initiative in South Korea
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Home Center Hlds
Strengths of Home Center Hlds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Home Center Hlds are -
High brand equity
– Home Center Hlds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Home Center Hlds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Home Center Hlds is present in almost all the verticals within the Construction - Raw Materials industry. This has provided Home Center Hlds 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.
Strong track record of project management in the Construction - Raw Materials industry
– Home Center Hlds is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Construction - Raw Materials industry
- digital transformation varies from industry to industry. For Home Center Hlds digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Home Center Hlds 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.
Low bargaining power of suppliers
– Suppliers of Home Center Hlds in the Capital Goods sector have low bargaining power. Home Center Hlds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Home Center Hlds to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Home Center Hlds has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Home Center Hlds staying ahead in the Construction - Raw Materials industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Home Center Hlds has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Home Center Hlds 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.
Learning organization
- Home Center Hlds 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 Home Center Hlds is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Home Center Hlds emphasize – knowledge, initiative, and innovation.
Training and development
– Home Center Hlds 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.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Home Center Hlds has clearly differentiated products in the market place. This has enabled Home Center Hlds to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Home Center Hlds to invest into research and development (R&D) and innovation.
Analytics focus
– Home Center Hlds 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 Construction - Raw Materials 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.
Highly skilled collaborators
– Home Center Hlds has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction - Raw Materials industry. Secondly the value chain collaborators of Home Center Hlds have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Home Center Hlds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Home Center Hlds are -
Interest costs
– Compare to the competition, Home Center Hlds 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.
Ability to respond to the competition
– As the decision making is very deliberative at Home Center Hlds, in the dynamic environment of Construction - Raw Materials industry it has struggled to respond to the nimble upstart competition. Home Center Hlds has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Home Center Hlds supply chain. Even after few cautionary changes, Home Center Hlds is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Home Center Hlds vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Home Center Hlds is just above the Construction - Raw Materials 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.
Lack of clear differentiation of Home Center Hlds products
– To increase the profitability and margins on the products, Home Center Hlds needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Home Center Hlds is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Home Center Hlds needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Home Center Hlds to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of South Korea, Home Center Hlds needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Home Center Hlds is slow explore the new channels of communication. These new channels of communication can help Home Center Hlds to provide better information regarding Construction - Raw Materials products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Home Center Hlds needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction - Raw Materials industry have deep experience in developing customer relationships. Marketing department at Home Center Hlds can leverage the sales team experience to cultivate customer relationships as Home Center Hlds is planning to shift buying processes online.
Employees’ less understanding of Home Center Hlds strategy
– From the outside it seems that the employees of Home Center Hlds 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.
No frontier risks strategy
– From the 10K / annual statement of Home Center Hlds, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.
Home Center Hlds Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Home Center Hlds are -
Learning at scale
– Online learning technologies has now opened space for Home Center Hlds 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction - Raw Materials industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Home Center Hlds 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. Home Center Hlds 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.
Use of Bitcoin and other crypto currencies for transactions in Construction - Raw Materials industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Home Center Hlds in the Construction - Raw Materials industry. Now Home Center Hlds can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Home Center Hlds 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.
Leveraging digital technologies
– Home Center Hlds 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Home Center Hlds 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 Home Center Hlds 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 Home Center Hlds to increase its market reach. Home Center Hlds 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.
Loyalty marketing
– Home Center Hlds 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.
Building a culture of innovation
– managers at Home Center Hlds 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 Construction - Raw Materials industry.
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. Home Center Hlds can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Home Center Hlds has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Home Center Hlds to build a competitive advantage using analytics. The analytics driven competitive advantage can help Home Center Hlds to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Home Center Hlds can use these opportunities to build new business models that can help the communities that Home Center Hlds operates in. Secondly it can use opportunities from government spending in Construction - Raw Materials sector.
Creating value in data economy
– The success of analytics program of Home Center Hlds has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Home Center Hlds to build a more holistic ecosystem for Home Center Hlds products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Home Center Hlds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Home Center Hlds are -
Easy access to finance
– Easy access to finance in Construction - Raw Materials industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Home Center Hlds can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Home Center Hlds 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 Home Center Hlds prominent markets.
Regulatory challenges
– Home Center Hlds 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 - Raw Materials industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Home Center Hlds 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 - Raw Materials sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Home Center Hlds in Construction - Raw Materials industry. The Construction - Raw Materials 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.
Environmental challenges
– Home Center Hlds 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. Home Center Hlds can take advantage of this fund but it will also bring new competitors in the Construction - Raw Materials industry.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Home Center Hlds business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Home Center Hlds with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
Increasing wage structure of Home Center Hlds
– 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 Home Center Hlds.
Shortening product life cycle
– it is one of the major threat that Home Center Hlds is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Home Center Hlds 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 - Raw Materials industry.
Weighted SWOT Analysis of Home Center Hlds Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Home Center Hlds 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 Home Center Hlds 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 Home Center Hlds 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 Home Center Hlds 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 Home Center Hlds needs to make to build a sustainable competitive advantage.