SWOT Analysis / TOWS Matrix for Daesung Holdin (South Korea)
Based on various researches at Oak Spring University , Daesung Holdin is operating in a macro-environment that has been destablized by – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daesung Holdin can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daesung Holdin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daesung Holdin 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 Daesung Holdin can be done for the following purposes –
1. Strategic planning of Daesung Holdin
2. Improving business portfolio management of Daesung Holdin
3. Assessing feasibility of the new initiative in South Korea
4. Making a Computer Networks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daesung Holdin
Strengths of Daesung Holdin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daesung Holdin are -
Highly skilled collaborators
– Daesung Holdin has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Networks industry. Secondly the value chain collaborators of Daesung Holdin have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Daesung Holdin is one of the leading players in the Computer Networks 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.
Low bargaining power of suppliers
– Suppliers of Daesung Holdin in the Technology sector have low bargaining power. Daesung Holdin has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daesung Holdin to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Computer Networks industry
- digital transformation varies from industry to industry. For Daesung Holdin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daesung Holdin 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.
Strong track record of project management in the Computer Networks industry
– Daesung Holdin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Daesung Holdin in Computer Networks 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 Daesung Holdin 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.
Training and development
– Daesung Holdin has one of the best training and development program in Technology 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.
Diverse revenue streams
– Daesung Holdin is present in almost all the verticals within the Computer Networks industry. This has provided Daesung Holdin 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
– Daesung Holdin 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 Computer Networks 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.
Ability to lead change in Computer Networks
– Daesung Holdin is one of the leading players in the Computer Networks industry in South Korea. Over the years it has not only transformed the business landscape in the Computer Networks industry in South Korea but also across the existing markets. The ability to lead change has enabled Daesung Holdin 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 Computer Networks industry
– Daesung Holdin has clearly differentiated products in the market place. This has enabled Daesung Holdin to fetch slight price premium compare to the competitors in the Computer Networks industry. The sustainable margins have also helped Daesung Holdin to invest into research and development (R&D) and innovation.
Weaknesses of Daesung Holdin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daesung Holdin are -
Workers concerns about automation
– As automation is fast increasing in the Computer Networks industry, Daesung Holdin 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.
High operating costs
– Compare to the competitors, Daesung Holdin has high operating costs in the Computer Networks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Daesung Holdin lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Daesung Holdin is dominated by functional specialists. It is not different from other players in the Computer Networks industry, but Daesung Holdin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daesung Holdin to focus more on services in the Computer Networks industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Daesung Holdin, it seems that company is thinking out the frontier risks that can impact Computer Networks 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.
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 Daesung Holdin supply chain. Even after few cautionary changes, Daesung Holdin is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daesung Holdin vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Computer Networks industry
– because of the regulatory requirements in South Korea, Daesung Holdin 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 Computer Networks industry.
High cash cycle compare to competitors
Daesung Holdin has a high cash cycle compare to other players in the Computer Networks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Daesung Holdin is just above the Computer Networks 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 Daesung Holdin has some of the most successful models in the Computer Networks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Daesung Holdin should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Daesung Holdin 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.
Capital Spending Reduction
– Even during the low interest decade, Daesung Holdin 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 Computer Networks industry using digital technology.
Daesung Holdin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daesung Holdin are -
Leveraging digital technologies
– Daesung Holdin 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.
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. Daesung Holdin can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daesung Holdin is facing challenges because of the dominance of functional experts in the organization. Daesung Holdin can utilize new technology in the field of Computer Networks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Daesung Holdin has opened avenues for new revenue streams for the organization in Computer Networks industry. This can help Daesung Holdin to build a more holistic ecosystem for Daesung Holdin products in the Computer Networks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Daesung Holdin to increase its market reach. Daesung Holdin 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daesung Holdin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Daesung Holdin 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.
Manufacturing automation
– Daesung Holdin can use the latest technology developments to improve its manufacturing and designing process in Computer Networks 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Networks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daesung Holdin 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. Daesung Holdin 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daesung Holdin 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 Daesung Holdin to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Daesung Holdin can improve the customer journey of consumers in the Computer Networks 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.
Learning at scale
– Online learning technologies has now opened space for Daesung Holdin 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Daesung Holdin 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.
Threats Daesung Holdin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daesung Holdin are -
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 Daesung Holdin in the Computer Networks sector and impact the bottomline of the organization.
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 Daesung Holdin business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Daesung Holdin has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, Daesung Holdin needs to keep up with the evolution of technology in the Computer Networks sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Daesung Holdin 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. Daesung Holdin can take advantage of this fund but it will also bring new competitors in the Computer Networks industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daesung Holdin 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 Daesung Holdin prominent markets.
Increasing wage structure of Daesung Holdin
– 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 Daesung Holdin.
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. Daesung Holdin 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.
Shortening product life cycle
– it is one of the major threat that Daesung Holdin is facing in Computer Networks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Daesung Holdin needs to understand the core reasons impacting the Computer Networks industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daesung Holdin 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 Computer Networks industry are lowering. It can presents Daesung Holdin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Networks sector.
Consumer confidence and its impact on Daesung Holdin 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 Computer Networks industry and other sectors.
Weighted SWOT Analysis of Daesung Holdin Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daesung Holdin 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 Daesung Holdin 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 Daesung Holdin 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 Daesung Holdin 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 Daesung Holdin needs to make to build a sustainable competitive advantage.