SWOT Analysis / TOWS Matrix for Daesung Eltec (South Korea)
Based on various researches at Oak Spring University , Daesung Eltec is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing energy prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daesung Eltec can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daesung Eltec, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daesung Eltec operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Daesung Eltec can be done for the following purposes –
1. Strategic planning of Daesung Eltec
2. Improving business portfolio management of Daesung Eltec
3. Assessing feasibility of the new initiative in South Korea
4. Making a Audio & Video Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daesung Eltec
Strengths of Daesung Eltec | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daesung Eltec are -
Digital Transformation in Audio & Video Equipment industry
- digital transformation varies from industry to industry. For Daesung Eltec digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daesung Eltec 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.
Diverse revenue streams
– Daesung Eltec is present in almost all the verticals within the Audio & Video Equipment industry. This has provided Daesung Eltec 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.
Innovation driven organization
– Daesung Eltec is one of the most innovative firm in Audio & Video Equipment sector.
Strong track record of project management in the Audio & Video Equipment industry
– Daesung Eltec is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Daesung Eltec has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Audio & Video Equipment industry. Secondly the value chain collaborators of Daesung Eltec have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Daesung Eltec 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.
Effective Research and Development (R&D)
– Daesung Eltec has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daesung Eltec staying ahead in the Audio & Video Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Daesung Eltec
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daesung Eltec does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Daesung Eltec 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.
Learning organization
- Daesung Eltec is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Daesung Eltec is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daesung Eltec emphasize – knowledge, initiative, and innovation.
Ability to lead change in Audio & Video Equipment
– Daesung Eltec is one of the leading players in the Audio & Video Equipment industry in South Korea. Over the years it has not only transformed the business landscape in the Audio & Video Equipment industry in South Korea but also across the existing markets. The ability to lead change has enabled Daesung Eltec in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Daesung Eltec 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 Audio & Video Equipment industry. The technology infrastructure of South Korea is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses of Daesung Eltec | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daesung Eltec are -
High dependence on Daesung Eltec ‘s star products
– The top 2 products and services of Daesung Eltec still accounts for major business revenue. This dependence on star products in Audio & Video Equipment industry has resulted into insufficient focus on developing new products, even though Daesung Eltec has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Daesung Eltec is dominated by functional specialists. It is not different from other players in the Audio & Video Equipment industry, but Daesung Eltec needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daesung Eltec to focus more on services in the Audio & Video Equipment industry rather than just following the product oriented approach.
Employees’ less understanding of Daesung Eltec strategy
– From the outside it seems that the employees of Daesung Eltec 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, Daesung Eltec 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 Audio & Video Equipment industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Audio & Video Equipment industry, Daesung Eltec 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.
Low market penetration in new markets
– Outside its home market of South Korea, Daesung Eltec needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Daesung Eltec 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.
Interest costs
– Compare to the competition, Daesung Eltec 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.
Slow to strategic competitive environment developments
– As Daesung Eltec is one of the leading players in the Audio & Video Equipment industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Audio & Video Equipment industry in last five years.
Skills based hiring in Audio & Video Equipment industry
– The stress on hiring functional specialists at Daesung Eltec 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daesung Eltec is slow explore the new channels of communication. These new channels of communication can help Daesung Eltec to provide better information regarding Audio & Video Equipment products and services. It can also build an online community to further reach out to potential customers.
Daesung Eltec Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daesung Eltec are -
Learning at scale
– Online learning technologies has now opened space for Daesung Eltec 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daesung Eltec in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Audio & Video Equipment industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Daesung Eltec has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Audio & Video Equipment sector. This continuous investment in analytics has enabled Daesung Eltec to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daesung Eltec to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daesung Eltec can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Daesung Eltec to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Daesung Eltec 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 Audio & Video Equipment industry.
Buying journey improvements
– Daesung Eltec can improve the customer journey of consumers in the Audio & Video Equipment 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daesung Eltec can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Daesung Eltec can develop new processes and procedures in Audio & Video Equipment 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Daesung Eltec 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.
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. Daesung Eltec can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Daesung Eltec can use the latest technology developments to improve its manufacturing and designing process in Audio & Video Equipment 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Audio & Video Equipment industry, but it has also influenced the consumer preferences. Daesung Eltec can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Daesung Eltec 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.
Threats Daesung Eltec External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daesung Eltec are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Daesung Eltec business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Daesung Eltec 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 Audio & Video Equipment industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daesung Eltec in Audio & Video Equipment industry. The Audio & Video Equipment 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, Daesung Eltec may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Audio & Video Equipment sector.
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.
Technology acceleration in Forth Industrial Revolution
– Daesung Eltec has witnessed rapid integration of technology during Covid-19 in the Audio & Video Equipment industry. As one of the leading players in the industry, Daesung Eltec needs to keep up with the evolution of technology in the Audio & Video Equipment 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.
Regulatory challenges
– Daesung Eltec 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 Audio & Video Equipment industry regulations.
High dependence on third party suppliers
– Daesung Eltec 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Daesung Eltec needs to understand the core reasons impacting the Audio & Video Equipment industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Audio & Video Equipment industry are lowering. It can presents Daesung Eltec with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Audio & Video Equipment sector.
Shortening product life cycle
– it is one of the major threat that Daesung Eltec is facing in Audio & Video Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daesung Eltec 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 Daesung Eltec 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 Daesung Eltec.
Weighted SWOT Analysis of Daesung Eltec Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daesung Eltec needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Daesung Eltec is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Daesung Eltec is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Daesung Eltec to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Daesung Eltec needs to make to build a sustainable competitive advantage.