SWOT Analysis / TOWS Matrix for Jeju Semiconductor (South Korea)
Based on various researches at Oak Spring University , Jeju Semiconductor is operating in a macro-environment that has been destablized by – wage bills are increasing, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Jeju Semiconductor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jeju Semiconductor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jeju Semiconductor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jeju Semiconductor 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 Jeju Semiconductor can be done for the following purposes –
1. Strategic planning of Jeju Semiconductor
2. Improving business portfolio management of Jeju Semiconductor
3. Assessing feasibility of the new initiative in South Korea
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jeju Semiconductor
Strengths of Jeju Semiconductor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jeju Semiconductor are -
Analytics focus
– Jeju Semiconductor 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 Semiconductors 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.
Effective Research and Development (R&D)
– Jeju Semiconductor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Jeju Semiconductor staying ahead in the Semiconductors 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
– Jeju Semiconductor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jeju Semiconductor 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.
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For Jeju Semiconductor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jeju Semiconductor 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.
Ability to recruit top talent
– Jeju Semiconductor is one of the leading players in the Semiconductors 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.
Superior customer experience
– The customer experience strategy of Jeju Semiconductor in Semiconductors industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Semiconductors
– Jeju Semiconductor is one of the leading players in the Semiconductors industry in South Korea. Over the years it has not only transformed the business landscape in the Semiconductors industry in South Korea but also across the existing markets. The ability to lead change has enabled Jeju Semiconductor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Semiconductors industry
– Jeju Semiconductor has clearly differentiated products in the market place. This has enabled Jeju Semiconductor to fetch slight price premium compare to the competitors in the Semiconductors industry. The sustainable margins have also helped Jeju Semiconductor to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Jeju Semiconductor in the Technology sector have low bargaining power. Jeju Semiconductor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jeju Semiconductor to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Jeju Semiconductor 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 Jeju Semiconductor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jeju Semiconductor emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Jeju Semiconductor is present in almost all the verticals within the Semiconductors industry. This has provided Jeju Semiconductor 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.
High switching costs
– The high switching costs that Jeju Semiconductor 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.
Weaknesses of Jeju Semiconductor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jeju Semiconductor are -
Increasing silos among functional specialists
– The organizational structure of Jeju Semiconductor is dominated by functional specialists. It is not different from other players in the Semiconductors industry, but Jeju Semiconductor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jeju Semiconductor to focus more on services in the Semiconductors industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Jeju Semiconductor 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 Semiconductors industry using digital technology.
Lack of clear differentiation of Jeju Semiconductor products
– To increase the profitability and margins on the products, Jeju Semiconductor needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Jeju Semiconductor is one of the leading players in the Semiconductors industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Semiconductors industry in last five years.
Products dominated business model
– Even though Jeju Semiconductor has some of the most successful models in the Semiconductors industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Jeju Semiconductor should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of South Korea, Jeju Semiconductor needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Jeju Semiconductor is just above the Semiconductors 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.
High cash cycle compare to competitors
Jeju Semiconductor has a high cash cycle compare to other players in the Semiconductors industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Jeju Semiconductor 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.
Ability to respond to the competition
– As the decision making is very deliberative at Jeju Semiconductor, in the dynamic environment of Semiconductors industry it has struggled to respond to the nimble upstart competition. Jeju Semiconductor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Jeju Semiconductor ‘s star products
– The top 2 products and services of Jeju Semiconductor still accounts for major business revenue. This dependence on star products in Semiconductors industry has resulted into insufficient focus on developing new products, even though Jeju Semiconductor has relatively successful track record of launching new products.
Jeju Semiconductor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jeju Semiconductor are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Jeju Semiconductor 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jeju Semiconductor 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 Jeju Semiconductor to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Jeju Semiconductor to increase its market reach. Jeju Semiconductor 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.
Buying journey improvements
– Jeju Semiconductor can improve the customer journey of consumers in the Semiconductors industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Jeju Semiconductor can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Jeju Semiconductor 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 Semiconductors industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Semiconductors industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jeju Semiconductor 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. Jeju Semiconductor 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.
Creating value in data economy
– The success of analytics program of Jeju Semiconductor has opened avenues for new revenue streams for the organization in Semiconductors industry. This can help Jeju Semiconductor to build a more holistic ecosystem for Jeju Semiconductor products in the Semiconductors industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Jeju Semiconductor can develop new processes and procedures in Semiconductors 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
– Jeju Semiconductor 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jeju Semiconductor in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Semiconductors industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Jeju Semiconductor 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.
Manufacturing automation
– Jeju Semiconductor can use the latest technology developments to improve its manufacturing and designing process in Semiconductors 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.
Threats Jeju Semiconductor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jeju Semiconductor are -
Consumer confidence and its impact on Jeju Semiconductor 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 Semiconductors industry and other sectors.
Regulatory challenges
– Jeju Semiconductor 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 Semiconductors industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jeju Semiconductor in Semiconductors industry. The Semiconductors 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 Jeju Semiconductor.
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 Jeju Semiconductor in the Semiconductors sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Jeju Semiconductor is facing in Semiconductors sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jeju Semiconductor 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 Jeju Semiconductor prominent markets.
Stagnating economy with rate increase
– Jeju Semiconductor 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 Semiconductors industry.
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 Jeju Semiconductor business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Semiconductors industry are lowering. It can presents Jeju Semiconductor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Semiconductors sector.
Easy access to finance
– Easy access to finance in Semiconductors industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jeju Semiconductor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Jeju Semiconductor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor needs to make to build a sustainable competitive advantage.