Shinhan 2nd Special (203650) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shinhan 2nd Special (South Korea)
Based on various researches at Oak Spring University , Shinhan 2nd Special is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Shinhan 2nd Special
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shinhan 2nd Special can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shinhan 2nd Special, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shinhan 2nd Special 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 Shinhan 2nd Special can be done for the following purposes –
1. Strategic planning of Shinhan 2nd Special
2. Improving business portfolio management of Shinhan 2nd Special
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 Shinhan 2nd Special
Strengths of Shinhan 2nd Special | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shinhan 2nd Special are -
Highly skilled collaborators
– Shinhan 2nd Special 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 Shinhan 2nd Special have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Shinhan 2nd Special in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Shinhan 2nd Special 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 Shinhan 2nd Special 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 Shinhan 2nd Special
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shinhan 2nd Special does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Shinhan 2nd Special comprises – understanding the underlying the factors in the Misc. Financial Services 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.
Diverse revenue streams
– Shinhan 2nd Special is present in almost all the verticals within the Misc. Financial Services industry. This has provided Shinhan 2nd Special 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.
Analytics focus
– Shinhan 2nd Special 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.
Sustainable margins compare to other players in Misc. Financial Services industry
– Shinhan 2nd Special has clearly differentiated products in the market place. This has enabled Shinhan 2nd Special to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Shinhan 2nd Special to invest into research and development (R&D) and innovation.
Innovation driven organization
– Shinhan 2nd Special is one of the most innovative firm in Misc. Financial Services sector.
Ability to recruit top talent
– Shinhan 2nd Special 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.
Successful track record of launching new products
– Shinhan 2nd Special has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shinhan 2nd Special 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.
Weaknesses of Shinhan 2nd Special | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shinhan 2nd Special are -
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, Shinhan 2nd Special 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.
Need for greater diversity
– Shinhan 2nd Special 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 cash cycle compare to competitors
Shinhan 2nd Special 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.
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 Shinhan 2nd Special supply chain. Even after few cautionary changes, Shinhan 2nd Special is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shinhan 2nd Special vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Shinhan 2nd Special 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shinhan 2nd Special is slow explore the new channels of communication. These new channels of communication can help Shinhan 2nd Special 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.
Products dominated business model
– Even though Shinhan 2nd Special has some of the most successful models in the Misc. Financial Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shinhan 2nd Special should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Shinhan 2nd Special is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Shinhan 2nd Special needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shinhan 2nd Special to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
High dependence on Shinhan 2nd Special ‘s star products
– The top 2 products and services of Shinhan 2nd Special still accounts for major business revenue. This dependence on star products in Misc. Financial Services industry has resulted into insufficient focus on developing new products, even though Shinhan 2nd Special has relatively successful track record of launching new products.
Skills based hiring in Misc. Financial Services industry
– The stress on hiring functional specialists at Shinhan 2nd Special 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.
Ability to respond to the competition
– As the decision making is very deliberative at Shinhan 2nd Special, in the dynamic environment of Misc. Financial Services industry it has struggled to respond to the nimble upstart competition. Shinhan 2nd Special has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Shinhan 2nd Special Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shinhan 2nd Special are -
Creating value in data economy
– The success of analytics program of Shinhan 2nd Special has opened avenues for new revenue streams for the organization in Misc. Financial Services industry. This can help Shinhan 2nd Special to build a more holistic ecosystem for Shinhan 2nd Special products in the Misc. Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shinhan 2nd Special to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Shinhan 2nd Special to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Shinhan 2nd Special 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.
Loyalty marketing
– Shinhan 2nd Special 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shinhan 2nd Special 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shinhan 2nd Special can use these opportunities to build new business models that can help the communities that Shinhan 2nd Special operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
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. Shinhan 2nd Special 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. Shinhan 2nd Special 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shinhan 2nd Special can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Shinhan 2nd Special 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.
Manufacturing automation
– Shinhan 2nd Special 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.
Building a culture of innovation
– managers at Shinhan 2nd Special 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.
Better consumer reach
– The expansion of the 5G network will help Shinhan 2nd Special to increase its market reach. Shinhan 2nd Special 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shinhan 2nd Special in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Financial Services industry, and it will provide faster access to the consumers.
Threats Shinhan 2nd Special External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shinhan 2nd Special are -
Easy access to finance
– Easy access to finance in Misc. Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shinhan 2nd Special can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Shinhan 2nd Special with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the 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 Shinhan 2nd Special.
Environmental challenges
– Shinhan 2nd Special 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. Shinhan 2nd Special can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
Consumer confidence and its impact on Shinhan 2nd Special 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.
Stagnating economy with rate increase
– Shinhan 2nd Special 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.
Regulatory challenges
– Shinhan 2nd Special 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 Misc. Financial Services industry regulations.
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. Shinhan 2nd Special needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.
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 Shinhan 2nd Special in the Misc. Financial Services sector and impact the bottomline of the organization.
Increasing wage structure of Shinhan 2nd Special
– 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 Shinhan 2nd Special.
Shortening product life cycle
– it is one of the major threat that Shinhan 2nd Special is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shinhan 2nd Special 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.
High dependence on third party suppliers
– Shinhan 2nd Special 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.
Weighted SWOT Analysis of Shinhan 2nd Special Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shinhan 2nd Special 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 Shinhan 2nd Special 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 Shinhan 2nd Special 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 Shinhan 2nd Special 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 Shinhan 2nd Special needs to make to build a sustainable competitive advantage.
