SWOT Analysis / TOWS Matrix for KPX Lifescience (South Korea)
Based on various researches at Oak Spring University , KPX Lifescience is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KPX Lifescience can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KPX Lifescience, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KPX Lifescience 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 KPX Lifescience can be done for the following purposes –
1. Strategic planning of KPX Lifescience
2. Improving business portfolio management of KPX Lifescience
3. Assessing feasibility of the new initiative in South Korea
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KPX Lifescience
Strengths of KPX Lifescience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of KPX Lifescience are -
Training and development
– KPX Lifescience has one of the best training and development program in Healthcare 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.
Innovation driven organization
– KPX Lifescience is one of the most innovative firm in Biotechnology & Drugs sector.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For KPX Lifescience digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. KPX Lifescience has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- KPX Lifescience 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 KPX Lifescience is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at KPX Lifescience emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– KPX Lifescience is one of the leading players in the Biotechnology & Drugs industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management in the Biotechnology & Drugs industry
– KPX Lifescience is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Biotechnology & Drugs
– KPX Lifescience is one of the leading players in the Biotechnology & Drugs industry in South Korea. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in South Korea but also across the existing markets. The ability to lead change has enabled KPX Lifescience in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of KPX Lifescience in the Healthcare sector have low bargaining power. KPX Lifescience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps KPX Lifescience to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– KPX Lifescience is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided KPX Lifescience 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 Biotechnology & Drugs industry
– KPX Lifescience has clearly differentiated products in the market place. This has enabled KPX Lifescience to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped KPX Lifescience to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– KPX Lifescience has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of KPX Lifescience have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– KPX Lifescience 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 Biotechnology & Drugs 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 KPX Lifescience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KPX Lifescience are -
Increasing silos among functional specialists
– The organizational structure of KPX Lifescience is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but KPX Lifescience needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help KPX Lifescience to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
High bargaining power of channel partners in Biotechnology & Drugs industry
– because of the regulatory requirements in South Korea, KPX Lifescience 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 Biotechnology & Drugs industry.
Low market penetration in new markets
– Outside its home market of South Korea, KPX Lifescience needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on KPX Lifescience ‘s star products
– The top 2 products and services of KPX Lifescience still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though KPX Lifescience has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, KPX Lifescience 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 decision making process
– As mentioned earlier in the report, KPX Lifescience has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. KPX Lifescience 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.
Aligning sales with marketing
– From the outside it seems that KPX Lifescience needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at KPX Lifescience can leverage the sales team experience to cultivate customer relationships as KPX Lifescience is planning to shift buying processes online.
Lack of clear differentiation of KPX Lifescience products
– To increase the profitability and margins on the products, KPX Lifescience needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, KPX Lifescience has high operating costs in the Biotechnology & Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract KPX Lifescience lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at KPX Lifescience, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. KPX Lifescience has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Biotechnology & Drugs industry
– The stress on hiring functional specialists at KPX Lifescience 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.
KPX Lifescience Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of KPX Lifescience are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, KPX Lifescience is facing challenges because of the dominance of functional experts in the organization. KPX Lifescience can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– KPX Lifescience can improve the customer journey of consumers in the Biotechnology & Drugs 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.
Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for KPX Lifescience in the Biotechnology & Drugs industry. Now KPX Lifescience can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for KPX Lifescience 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.
Better consumer reach
– The expansion of the 5G network will help KPX Lifescience to increase its market reach. KPX Lifescience 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, KPX Lifescience 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 KPX Lifescience 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 KPX Lifescience 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.
Creating value in data economy
– The success of analytics program of KPX Lifescience has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help KPX Lifescience to build a more holistic ecosystem for KPX Lifescience products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. KPX Lifescience can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. KPX Lifescience can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– KPX Lifescience 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.
Manufacturing automation
– KPX Lifescience can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & Drugs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for KPX Lifescience in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Threats KPX Lifescience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of KPX Lifescience are -
Increasing wage structure of KPX Lifescience
– 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 KPX Lifescience.
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 KPX Lifescience in the Biotechnology & Drugs sector and impact the bottomline of the organization.
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.
Regulatory challenges
– KPX Lifescience 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 Biotechnology & Drugs industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for KPX Lifescience in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, KPX Lifescience may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Environmental challenges
– KPX Lifescience 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. KPX Lifescience can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
Consumer confidence and its impact on KPX Lifescience 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 Biotechnology & Drugs industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, KPX Lifescience 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 KPX Lifescience prominent markets.
High dependence on third party suppliers
– KPX Lifescience 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.
Shortening product life cycle
– it is one of the major threat that KPX Lifescience is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 KPX Lifescience.
Technology acceleration in Forth Industrial Revolution
– KPX Lifescience has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, KPX Lifescience needs to keep up with the evolution of technology in the Biotechnology & Drugs sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of KPX Lifescience Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at KPX Lifescience 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 KPX Lifescience 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 KPX Lifescience 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 KPX Lifescience 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 KPX Lifescience needs to make to build a sustainable competitive advantage.