Daegu Dept Sto (6370) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Daegu Dept Sto (South Korea)

Based on various researches at Oak Spring University , Daegu Dept Sto is operating in a macro-environment that has been destablized by – increasing commodity prices, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing energy prices, etc

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Introduction to SWOT Analysis of Daegu Dept Sto

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

Strengths of Daegu Dept Sto | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Daegu Dept Sto are -

Strong track record of project management in the Retail (Department & Discount) industry

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

Learning organization

- Daegu Dept Sto 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 Daegu Dept Sto is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daegu Dept Sto emphasize – knowledge, initiative, and innovation.

Training and development

– Daegu Dept Sto has one of the best training and development program in Services 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.

Cross disciplinary teams

– Horizontal connected teams at the Daegu Dept Sto are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Digital Transformation in Retail (Department & Discount) industry

- digital transformation varies from industry to industry. For Daegu Dept Sto digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daegu Dept Sto 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.

Organizational Resilience of Daegu Dept Sto

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

Analytics focus

– Daegu Dept Sto 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 Retail (Department & Discount) 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.

Superior customer experience

– The customer experience strategy of Daegu Dept Sto in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Daegu Dept Sto is one of the most innovative firm in Retail (Department & Discount) sector.

Low bargaining power of suppliers

– Suppliers of Daegu Dept Sto in the Services sector have low bargaining power. Daegu Dept Sto has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daegu Dept Sto to manage not only supply disruptions but also source products at highly competitive prices.

Sustainable margins compare to other players in Retail (Department & Discount) industry

– Daegu Dept Sto has clearly differentiated products in the market place. This has enabled Daegu Dept Sto to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped Daegu Dept Sto to invest into research and development (R&D) and innovation.

High switching costs

– The high switching costs that Daegu Dept Sto has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Weaknesses of Daegu Dept Sto | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Daegu Dept Sto are -

Interest costs

– Compare to the competition, Daegu Dept Sto 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.

Aligning sales with marketing

– From the outside it seems that Daegu Dept Sto needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at Daegu Dept Sto can leverage the sales team experience to cultivate customer relationships as Daegu Dept Sto is planning to shift buying processes online.

Capital Spending Reduction

– Even during the low interest decade, Daegu Dept Sto 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 Retail (Department & Discount) industry using digital technology.

Slow decision making process

– As mentioned earlier in the report, Daegu Dept Sto has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Department & Discount) industry over the last five years. Daegu Dept Sto 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.

Lack of clear differentiation of Daegu Dept Sto products

– To increase the profitability and margins on the products, Daegu Dept Sto needs to provide more differentiated products than what it is currently offering in the marketplace.

High bargaining power of channel partners in Retail (Department & Discount) industry

– because of the regulatory requirements in South Korea, Daegu Dept Sto 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 Retail (Department & Discount) industry.

Compensation and incentives

– The revenue per employee of Daegu Dept Sto is just above the Retail (Department & Discount) 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.

Employees’ less understanding of Daegu Dept Sto strategy

– From the outside it seems that the employees of Daegu Dept Sto 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 Daegu Dept Sto ‘s star products

– The top 2 products and services of Daegu Dept Sto still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though Daegu Dept Sto has relatively successful track record of launching new products.

Slow to strategic competitive environment developments

– As Daegu Dept Sto is one of the leading players in the Retail (Department & Discount) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Department & Discount) industry in last five years.

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

Daegu Dept Sto Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Daegu Dept Sto are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Daegu Dept Sto 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Daegu Dept Sto in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Department & Discount) industry, and it will provide faster access to the consumers.

Using analytics as competitive advantage

– Daegu Dept Sto has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled Daegu Dept Sto to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daegu Dept Sto 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 Retail (Department & Discount) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daegu Dept Sto 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. Daegu Dept Sto 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.

Reforming the budgeting process

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

Building a culture of innovation

– managers at Daegu Dept Sto 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 Retail (Department & Discount) industry.

Leveraging digital technologies

– Daegu Dept Sto 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daegu Dept Sto can use these opportunities to build new business models that can help the communities that Daegu Dept Sto operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.

Loyalty marketing

– Daegu Dept Sto 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.

Learning at scale

– Online learning technologies has now opened space for Daegu Dept Sto to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Manufacturing automation

– Daegu Dept Sto can use the latest technology developments to improve its manufacturing and designing process in Retail (Department & Discount) 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 Retail (Department & Discount) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daegu Dept Sto in the Retail (Department & Discount) industry. Now Daegu Dept Sto can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– Daegu Dept Sto can improve the customer journey of consumers in the Retail (Department & Discount) 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.

Threats Daegu Dept Sto External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Daegu Dept Sto are -

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. Daegu Dept Sto 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.

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 Daegu Dept Sto business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daegu Dept Sto can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Daegu Dept Sto has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, Daegu Dept Sto needs to keep up with the evolution of technology in the Retail (Department & Discount) 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.

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. Daegu Dept Sto needs to understand the core reasons impacting the Retail (Department & Discount) industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Daegu Dept Sto 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 Retail (Department & Discount) industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Daegu Dept Sto 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 Daegu Dept Sto prominent markets.

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 Daegu Dept Sto.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Daegu Dept Sto in Retail (Department & Discount) industry. The Retail (Department & Discount) 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.

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.

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 Daegu Dept Sto in the Retail (Department & Discount) sector and impact the bottomline of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents Daegu Dept Sto with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Daegu Dept Sto may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Department & Discount) sector.

Weighted SWOT Analysis of Daegu Dept Sto Template, Example

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

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