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 – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
technology disruption, geopolitical disruptions, 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 -
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.
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.
Operational resilience
– The operational resilience strategy of Daesung Holdin comprises – understanding the underlying the factors in the Computer Networks 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.
Successful track record of launching new products
– Daesung Holdin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daesung Holdin 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.
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 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.
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.
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.
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.
Innovation driven organization
– Daesung Holdin is one of the most innovative firm in Computer Networks sector.
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.
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.
Weaknesses of Daesung Holdin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daesung Holdin are -
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 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.
Skills based hiring in Computer Networks industry
– The stress on hiring functional specialists at Daesung Holdin 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.
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.
Aligning sales with marketing
– From the outside it seems that Daesung Holdin needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Networks industry have deep experience in developing customer relationships. Marketing department at Daesung Holdin can leverage the sales team experience to cultivate customer relationships as Daesung Holdin is planning to shift buying processes online.
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.
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.
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.
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.
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.
Daesung Holdin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daesung Holdin are -
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.
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.
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.
Loyalty marketing
– Daesung Holdin 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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daesung Holdin 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 Daesung Holdin to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Use of Bitcoin and other crypto currencies for transactions in Computer Networks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daesung Holdin in the Computer Networks industry. Now Daesung Holdin can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Daesung Holdin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daesung Holdin are -
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.
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 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.
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.
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.
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.
Stagnating economy with rate increase
– Daesung Holdin 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 Computer Networks industry.
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.
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.
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.
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.
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.
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.
