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 – challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, 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, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
geopolitical disruptions, wage bills are increasing, 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 -
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.
High brand equity
– Daesung Holdin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daesung Holdin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Innovation driven organization
– Daesung Holdin is one of the most innovative firm in Computer Networks sector.
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.
Organizational Resilience of Daesung Holdin
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daesung Holdin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Daesung Holdin has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daesung Holdin staying ahead in the Computer Networks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Learning organization
- Daesung Holdin 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 Daesung Holdin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daesung Holdin emphasize – knowledge, initiative, and innovation.
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.
Weaknesses of Daesung Holdin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daesung Holdin are -
Ability to respond to the competition
– As the decision making is very deliberative at Daesung Holdin, in the dynamic environment of Computer Networks industry it has struggled to respond to the nimble upstart competition. Daesung Holdin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Daesung Holdin ‘s star products
– The top 2 products and services of Daesung Holdin still accounts for major business revenue. This dependence on star products in Computer Networks industry has resulted into insufficient focus on developing new products, even though Daesung Holdin has relatively successful track record of launching new products.
Employees’ less understanding of Daesung Holdin strategy
– From the outside it seems that the employees of Daesung Holdin 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 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.
Low market penetration in new markets
– Outside its home market of South Korea, Daesung Holdin needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Daesung Holdin products
– To increase the profitability and margins on the products, Daesung Holdin needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daesung Holdin is slow explore the new channels of communication. These new channels of communication can help Daesung Holdin to provide better information regarding Computer Networks products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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.
Daesung Holdin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daesung Holdin are -
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Networks industry, but it has also influenced the consumer preferences. Daesung Holdin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Daesung Holdin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Networks sector. This continuous investment in analytics has enabled Daesung Holdin to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daesung Holdin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daesung Holdin in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Networks industry, and it will provide faster access to the consumers.
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.
Developing new processes and practices
– Daesung Holdin can develop new processes and procedures in Computer Networks 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.
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.
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.
Building a culture of innovation
– managers at Daesung Holdin 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 Computer Networks industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daesung Holdin can use these opportunities to build new business models that can help the communities that Daesung Holdin operates in. Secondly it can use opportunities from government spending in Computer Networks sector.
Threats Daesung Holdin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daesung Holdin are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daesung Holdin in Computer Networks industry. The Computer Networks 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.
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.
High dependence on third party suppliers
– Daesung Holdin 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daesung Holdin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Networks sector.
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.
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 Daesung Holdin.
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.
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.
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.
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.
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.