SWOT Analysis / TOWS Matrix for Samchuly Bicycle (South Korea)
Based on various researches at Oak Spring University , Samchuly Bicycle is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing commodity prices, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, technology disruption,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Samchuly Bicycle can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samchuly Bicycle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samchuly Bicycle 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 Samchuly Bicycle can be done for the following purposes –
1. Strategic planning of Samchuly Bicycle
2. Improving business portfolio management of Samchuly Bicycle
3. Assessing feasibility of the new initiative in South Korea
4. Making a Recreational Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samchuly Bicycle
Strengths of Samchuly Bicycle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samchuly Bicycle are -
Low bargaining power of suppliers
– Suppliers of Samchuly Bicycle in the Consumer Cyclical sector have low bargaining power. Samchuly Bicycle has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Samchuly Bicycle to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Recreational Products
– Samchuly Bicycle is one of the leading players in the Recreational Products industry in South Korea. Over the years it has not only transformed the business landscape in the Recreational Products industry in South Korea but also across the existing markets. The ability to lead change has enabled Samchuly Bicycle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Samchuly Bicycle comprises – understanding the underlying the factors in the Recreational Products 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.
Digital Transformation in Recreational Products industry
- digital transformation varies from industry to industry. For Samchuly Bicycle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samchuly Bicycle 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.
High switching costs
– The high switching costs that Samchuly Bicycle 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.
Analytics focus
– Samchuly Bicycle 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 Recreational Products 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.
Organizational Resilience of Samchuly Bicycle
– The covid-19 pandemic has put organizational resilience at the centre of everthing Samchuly Bicycle does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Recreational Products industry
– Samchuly Bicycle has clearly differentiated products in the market place. This has enabled Samchuly Bicycle to fetch slight price premium compare to the competitors in the Recreational Products industry. The sustainable margins have also helped Samchuly Bicycle to invest into research and development (R&D) and innovation.
Strong track record of project management in the Recreational Products industry
– Samchuly Bicycle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Samchuly Bicycle in Recreational Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Samchuly Bicycle has one of the best training and development program in Consumer Cyclical 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.
Successful track record of launching new products
– Samchuly Bicycle has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samchuly Bicycle 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.
Weaknesses of Samchuly Bicycle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samchuly Bicycle are -
Products dominated business model
– Even though Samchuly Bicycle has some of the most successful models in the Recreational Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Samchuly Bicycle should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Samchuly Bicycle 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.
Low market penetration in new markets
– Outside its home market of South Korea, Samchuly Bicycle needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Samchuly Bicycle is slow explore the new channels of communication. These new channels of communication can help Samchuly Bicycle to provide better information regarding Recreational Products products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Samchuly Bicycle strategy
– From the outside it seems that the employees of Samchuly Bicycle 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.
Capital Spending Reduction
– Even during the low interest decade, Samchuly Bicycle 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 Recreational Products industry using digital technology.
Lack of clear differentiation of Samchuly Bicycle products
– To increase the profitability and margins on the products, Samchuly Bicycle needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Recreational Products industry
– The stress on hiring functional specialists at Samchuly Bicycle 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 Samchuly Bicycle ‘s star products
– The top 2 products and services of Samchuly Bicycle still accounts for major business revenue. This dependence on star products in Recreational Products industry has resulted into insufficient focus on developing new products, even though Samchuly Bicycle has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Samchuly Bicycle is dominated by functional specialists. It is not different from other players in the Recreational Products industry, but Samchuly Bicycle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samchuly Bicycle to focus more on services in the Recreational Products industry rather than just following the product 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 Samchuly Bicycle supply chain. Even after few cautionary changes, Samchuly Bicycle is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Samchuly Bicycle vulnerable to further global disruptions in South East Asia.
Samchuly Bicycle Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Samchuly Bicycle are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Samchuly Bicycle is facing challenges because of the dominance of functional experts in the organization. Samchuly Bicycle can utilize new technology in the field of Recreational Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samchuly Bicycle in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Products industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Samchuly Bicycle 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 Samchuly Bicycle to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Samchuly Bicycle to increase its market reach. Samchuly Bicycle 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.
Loyalty marketing
– Samchuly Bicycle 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.
Manufacturing automation
– Samchuly Bicycle can use the latest technology developments to improve its manufacturing and designing process in Recreational Products 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.
Leveraging digital technologies
– Samchuly Bicycle 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.
Developing new processes and practices
– Samchuly Bicycle can develop new processes and procedures in Recreational Products 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Samchuly Bicycle can use these opportunities to build new business models that can help the communities that Samchuly Bicycle operates in. Secondly it can use opportunities from government spending in Recreational Products sector.
Use of Bitcoin and other crypto currencies for transactions in Recreational Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Samchuly Bicycle in the Recreational Products industry. Now Samchuly Bicycle can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Samchuly Bicycle has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Products sector. This continuous investment in analytics has enabled Samchuly Bicycle to build a competitive advantage using analytics. The analytics driven competitive advantage can help Samchuly Bicycle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Samchuly Bicycle 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Recreational Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Samchuly Bicycle 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. Samchuly Bicycle 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.
Threats Samchuly Bicycle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Samchuly Bicycle are -
Shortening product life cycle
– it is one of the major threat that Samchuly Bicycle is facing in Recreational Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Samchuly Bicycle 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 Recreational Products industry and other sectors.
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 Samchuly Bicycle in the Recreational Products sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Samchuly Bicycle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Products sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Samchuly Bicycle 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 Samchuly Bicycle prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Recreational Products industry are lowering. It can presents Samchuly Bicycle with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Products sector.
Technology acceleration in Forth Industrial Revolution
– Samchuly Bicycle has witnessed rapid integration of technology during Covid-19 in the Recreational Products industry. As one of the leading players in the industry, Samchuly Bicycle needs to keep up with the evolution of technology in the Recreational Products 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 Samchuly Bicycle.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Samchuly Bicycle in Recreational Products industry. The Recreational Products 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.
Regulatory challenges
– Samchuly Bicycle needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Recreational Products industry regulations.
High dependence on third party suppliers
– Samchuly Bicycle 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.
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 Samchuly Bicycle business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Samchuly Bicycle 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. Samchuly Bicycle can take advantage of this fund but it will also bring new competitors in the Recreational Products industry.
Weighted SWOT Analysis of Samchuly Bicycle Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Samchuly Bicycle 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 Samchuly Bicycle 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 Samchuly Bicycle 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 Samchuly Bicycle 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 Samchuly Bicycle needs to make to build a sustainable competitive advantage.