Korea No.3 Special (222080) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Korea No.3 Special (South Korea)

Based on various researches at Oak Spring University , Korea No.3 Special is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing commodity prices, there is increasing trade war between United States & China, technology disruption, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing energy prices, etc

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Introduction to SWOT Analysis of Korea No.3 Special

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Korea No.3 Special can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Korea No.3 Special, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Korea No.3 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Korea No.3 Special can be done for the following purposes –
1. Strategic planning of Korea No.3 Special
2. Improving business portfolio management of Korea No.3 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 Korea No.3 Special

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Strengths of Korea No.3 Special | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Korea No.3 Special are -

Sustainable margins compare to other players in Misc. Financial Services industry

– Korea No.3 Special has clearly differentiated products in the market place. This has enabled Korea No.3 Special to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Korea No.3 Special to invest into research and development (R&D) and innovation.

Innovation driven organization

– Korea No.3 Special is one of the most innovative firm in Misc. Financial Services sector.

Effective Research and Development (R&D)

– Korea No.3 Special has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Korea No.3 Special staying ahead in the Misc. Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Korea No.3 Special in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Misc. Financial Services

– Korea No.3 Special is one of the leading players in the Misc. Financial Services industry in South Korea. Over the years it has not only transformed the business landscape in the Misc. Financial Services industry in South Korea but also across the existing markets. The ability to lead change has enabled Korea No.3 Special in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Korea No.3 Special has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Korea No.3 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.

High brand equity

– Korea No.3 Special has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Korea No.3 Special to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Operational resilience

– The operational resilience strategy of Korea No.3 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.

Low bargaining power of suppliers

– Suppliers of Korea No.3 Special in the Financial sector have low bargaining power. Korea No.3 Special has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Korea No.3 Special to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Misc. Financial Services industry

- digital transformation varies from industry to industry. For Korea No.3 Special digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Korea No.3 Special 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.

Diverse revenue streams

– Korea No.3 Special is present in almost all the verticals within the Misc. Financial Services industry. This has provided Korea No.3 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.

Learning organization

- Korea No.3 Special 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 Korea No.3 Special is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Korea No.3 Special emphasize – knowledge, initiative, and innovation.

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Weaknesses of Korea No.3 Special | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Korea No.3 Special are -

Interest costs

– Compare to the competition, Korea No.3 Special 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.

Low market penetration in new markets

– Outside its home market of South Korea, Korea No.3 Special needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Ability to respond to the competition

– As the decision making is very deliberative at Korea No.3 Special, in the dynamic environment of Misc. Financial Services industry it has struggled to respond to the nimble upstart competition. Korea No.3 Special has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Increasing silos among functional specialists

– The organizational structure of Korea No.3 Special is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Korea No.3 Special needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Korea No.3 Special to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.

High bargaining power of channel partners in Misc. Financial Services industry

– because of the regulatory requirements in South Korea, Korea No.3 Special 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.

Lack of clear differentiation of Korea No.3 Special products

– To increase the profitability and margins on the products, Korea No.3 Special needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– Korea No.3 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.

Employees’ less understanding of Korea No.3 Special strategy

– From the outside it seems that the employees of Korea No.3 Special 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, Korea No.3 Special 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 Korea No.3 Special lucrative customers.

Compensation and incentives

– The revenue per employee of Korea No.3 Special is just above the Misc. Financial Services 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.

Products dominated business model

– Even though Korea No.3 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. Korea No.3 Special should strive to include more intangible value offerings along with its core products and services.

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Korea No.3 Special Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Korea No.3 Special are -

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 Korea No.3 Special in the Misc. Financial Services industry. Now Korea No.3 Special can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– Korea No.3 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.

Developing new processes and practices

– Korea No.3 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Korea No.3 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.

Loyalty marketing

– Korea No.3 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Korea No.3 Special 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 Korea No.3 Special to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Low interest rates

– Even though inflation is raising its head in most developed economies, Korea No.3 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Korea No.3 Special is facing challenges because of the dominance of functional experts in the organization. Korea No.3 Special 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.

Learning at scale

– Online learning technologies has now opened space for Korea No.3 Special 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.

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 Korea No.3 Special 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.

Using analytics as competitive advantage

– Korea No.3 Special has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Financial Services sector. This continuous investment in analytics has enabled Korea No.3 Special to build a competitive advantage using analytics. The analytics driven competitive advantage can help Korea No.3 Special to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Korea No.3 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.

Leveraging digital technologies

– Korea No.3 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.

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Threats Korea No.3 Special External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Korea No.3 Special are -

High dependence on third party suppliers

– Korea No.3 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.

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. Korea No.3 Special needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Korea No.3 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.

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. Korea No.3 Special 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.

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 Korea No.3 Special in the Misc. Financial Services sector and impact the bottomline of the organization.

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. Korea No.3 Special can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Korea No.3 Special 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.

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 Korea No.3 Special.

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.

Environmental challenges

– Korea No.3 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. Korea No.3 Special can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.

Shortening product life cycle

– it is one of the major threat that Korea No.3 Special is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Korea No.3 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.

Increasing wage structure of Korea No.3 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 Korea No.3 Special.

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Weighted SWOT Analysis of Korea No.3 Special Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Korea No.3 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 Korea No.3 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 Korea No.3 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 Korea No.3 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 Korea No.3 Special needs to make to build a sustainable competitive advantage.

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