Korea Petroleum Ind (4090) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Korea Petroleum Ind (South Korea)

Based on various researches at Oak Spring University , Korea Petroleum Ind is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, there is increasing trade war between United States & China, increasing energy prices, etc

---

---

---

---

Introduction to SWOT Analysis of Korea Petroleum Ind

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Korea Petroleum Ind can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Korea Petroleum Ind, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Korea Petroleum Ind 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 Korea Petroleum Ind can be done for the following purposes –
1. Strategic planning of Korea Petroleum Ind
2. Improving business portfolio management of Korea Petroleum Ind
3. Assessing feasibility of the new initiative in South Korea
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Korea Petroleum Ind

---

Strengths of Korea Petroleum Ind | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Korea Petroleum Ind are -

Strong track record of project management in the Constr. - Supplies & Fixtures industry

– Korea Petroleum Ind is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Training and development

– Korea Petroleum Ind has one of the best training and development program in Capital Goods 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

– Korea Petroleum Ind is present in almost all the verticals within the Constr. - Supplies & Fixtures industry. This has provided Korea Petroleum Ind 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.

Effective Research and Development (R&D)

– Korea Petroleum Ind has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Korea Petroleum Ind staying ahead in the Constr. - Supplies & Fixtures industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Sustainable margins compare to other players in Constr. - Supplies & Fixtures industry

– Korea Petroleum Ind has clearly differentiated products in the market place. This has enabled Korea Petroleum Ind to fetch slight price premium compare to the competitors in the Constr. - Supplies & Fixtures industry. The sustainable margins have also helped Korea Petroleum Ind to invest into research and development (R&D) and innovation.

Learning organization

- Korea Petroleum Ind 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 Petroleum Ind is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Korea Petroleum Ind emphasize – knowledge, initiative, and innovation.

Ability to lead change in Constr. - Supplies & Fixtures

– Korea Petroleum Ind is one of the leading players in the Constr. - Supplies & Fixtures industry in South Korea. Over the years it has not only transformed the business landscape in the Constr. - Supplies & Fixtures industry in South Korea but also across the existing markets. The ability to lead change has enabled Korea Petroleum Ind in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Korea Petroleum Ind 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 Constr. - Supplies & Fixtures 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.

High switching costs

– The high switching costs that Korea Petroleum Ind 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.

Superior customer experience

– The customer experience strategy of Korea Petroleum Ind in Constr. - Supplies & Fixtures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Korea Petroleum Ind has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Korea Petroleum Ind to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Organizational Resilience of Korea Petroleum Ind

– The covid-19 pandemic has put organizational resilience at the centre of everthing Korea Petroleum Ind does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

---

---

Weaknesses of Korea Petroleum Ind | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Korea Petroleum Ind are -

Skills based hiring in Constr. - Supplies & Fixtures industry

– The stress on hiring functional specialists at Korea Petroleum Ind 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 cash cycle compare to competitors

Korea Petroleum Ind has a high cash cycle compare to other players in the Constr. - Supplies & Fixtures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High operating costs

– Compare to the competitors, Korea Petroleum Ind has high operating costs in the Constr. - Supplies & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Korea Petroleum Ind lucrative customers.

Slow to strategic competitive environment developments

– As Korea Petroleum Ind is one of the leading players in the Constr. - Supplies & Fixtures industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Constr. - Supplies & Fixtures industry in last five years.

Products dominated business model

– Even though Korea Petroleum Ind has some of the most successful models in the Constr. - Supplies & Fixtures industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Korea Petroleum Ind should strive to include more intangible value offerings along with its core products and services.

Need for greater diversity

– Korea Petroleum Ind 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.

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 Korea Petroleum Ind supply chain. Even after few cautionary changes, Korea Petroleum Ind is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Korea Petroleum Ind vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the Constr. - Supplies & Fixtures industry, Korea Petroleum Ind 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Korea Petroleum Ind is slow explore the new channels of communication. These new channels of communication can help Korea Petroleum Ind to provide better information regarding Constr. - Supplies & Fixtures products and services. It can also build an online community to further reach out to potential customers.

Slow decision making process

– As mentioned earlier in the report, Korea Petroleum Ind has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Constr. - Supplies & Fixtures industry over the last five years. Korea Petroleum Ind even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

No frontier risks strategy

– From the 10K / annual statement of Korea Petroleum Ind, it seems that company is thinking out the frontier risks that can impact Constr. - Supplies & Fixtures 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.

---

Korea Petroleum Ind Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Korea Petroleum Ind are -

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 Petroleum Ind 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Korea Petroleum Ind can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Korea Petroleum Ind is facing challenges because of the dominance of functional experts in the organization. Korea Petroleum Ind can utilize new technology in the field of Constr. - Supplies & Fixtures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Building a culture of innovation

– managers at Korea Petroleum Ind 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 Constr. - Supplies & Fixtures industry.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Constr. - Supplies & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Korea Petroleum Ind 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. Korea Petroleum Ind 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.

Developing new processes and practices

– Korea Petroleum Ind can develop new processes and procedures in Constr. - Supplies & Fixtures 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.

Manufacturing automation

– Korea Petroleum Ind can use the latest technology developments to improve its manufacturing and designing process in Constr. - Supplies & Fixtures 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.

Learning at scale

– Online learning technologies has now opened space for Korea Petroleum Ind 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Korea Petroleum Ind 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 Petroleum Ind to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Korea Petroleum Ind can use these opportunities to build new business models that can help the communities that Korea Petroleum Ind operates in. Secondly it can use opportunities from government spending in Constr. - Supplies & Fixtures sector.

Using analytics as competitive advantage

– Korea Petroleum Ind has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Constr. - Supplies & Fixtures sector. This continuous investment in analytics has enabled Korea Petroleum Ind to build a competitive advantage using analytics. The analytics driven competitive advantage can help Korea Petroleum Ind to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Buying journey improvements

– Korea Petroleum Ind can improve the customer journey of consumers in the Constr. - Supplies & Fixtures 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Korea Petroleum Ind 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 Korea Petroleum Ind External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Korea Petroleum Ind are -

Technology acceleration in Forth Industrial Revolution

– Korea Petroleum Ind has witnessed rapid integration of technology during Covid-19 in the Constr. - Supplies & Fixtures industry. As one of the leading players in the industry, Korea Petroleum Ind needs to keep up with the evolution of technology in the Constr. - Supplies & Fixtures 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.

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 Petroleum Ind.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Korea Petroleum Ind 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 Korea Petroleum Ind prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents Korea Petroleum Ind with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Korea Petroleum Ind in Constr. - Supplies & Fixtures industry. The Constr. - Supplies & Fixtures 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.

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 Petroleum Ind needs to understand the core reasons impacting the Constr. - Supplies & Fixtures industry. This will help it in building a better workplace.

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 Korea Petroleum Ind business can come under increasing regulations regarding data privacy, data security, etc.

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 Petroleum Ind in the Constr. - Supplies & Fixtures sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Korea Petroleum Ind 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 Constr. - Supplies & Fixtures industry.

High dependence on third party suppliers

– Korea Petroleum Ind 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.

Increasing wage structure of Korea Petroleum Ind

– 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 Petroleum Ind.

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 Petroleum Ind 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 Petroleum Ind can take advantage of this fund but it will also bring new competitors in the Constr. - Supplies & Fixtures industry.

---

Weighted SWOT Analysis of Korea Petroleum Ind Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Korea Petroleum Ind 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 Petroleum Ind 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 Petroleum Ind 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 Petroleum Ind 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 Petroleum Ind needs to make to build a sustainable competitive advantage.

--- ---