SWOT Analysis / TOWS Matrix for KB Autosys (South Korea)
Based on various researches at Oak Spring University , KB Autosys is operating in a macro-environment that has been destablized by – increasing energy prices, central banks are concerned over increasing inflation, there is backlash against globalization, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic ,
increasing commodity prices, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KB Autosys can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KB Autosys, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KB Autosys 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 KB Autosys can be done for the following purposes –
1. Strategic planning of KB Autosys
2. Improving business portfolio management of KB Autosys
3. Assessing feasibility of the new initiative in South Korea
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KB Autosys
Strengths of KB Autosys | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of KB Autosys are -
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For KB Autosys digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. KB Autosys 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
- KB Autosys 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 KB Autosys is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at KB Autosys emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that KB Autosys 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.
Ability to recruit top talent
– KB Autosys is one of the leading players in the Auto & Truck Parts 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.
Cross disciplinary teams
– Horizontal connected teams at the KB Autosys 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.
High brand equity
– KB Autosys has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled KB Autosys to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– KB Autosys has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. KB Autosys 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.
Superior customer experience
– The customer experience strategy of KB Autosys in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– KB Autosys is present in almost all the verticals within the Auto & Truck Parts industry. This has provided KB Autosys 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.
Operational resilience
– The operational resilience strategy of KB Autosys comprises – understanding the underlying the factors in the Auto & Truck Parts 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.
Organizational Resilience of KB Autosys
– The covid-19 pandemic has put organizational resilience at the centre of everthing KB Autosys 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 Auto & Truck Parts industry
– KB Autosys has clearly differentiated products in the market place. This has enabled KB Autosys to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped KB Autosys to invest into research and development (R&D) and innovation.
Weaknesses of KB Autosys | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KB Autosys are -
Aligning sales with marketing
– From the outside it seems that KB Autosys needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at KB Autosys can leverage the sales team experience to cultivate customer relationships as KB Autosys is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, KB Autosys 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 Auto & Truck Parts industry using digital technology.
High operating costs
– Compare to the competitors, KB Autosys has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract KB Autosys lucrative customers.
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 KB Autosys supply chain. Even after few cautionary changes, KB Autosys is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left KB Autosys vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of KB Autosys is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but KB Autosys needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help KB Autosys to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
High dependence on KB Autosys ‘s star products
– The top 2 products and services of KB Autosys still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though KB Autosys has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at KB Autosys, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. KB Autosys has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– KB Autosys 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.
Slow decision making process
– As mentioned earlier in the report, KB Autosys has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. KB Autosys 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.
Employees’ less understanding of KB Autosys strategy
– From the outside it seems that the employees of KB Autosys 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, KB Autosys is slow explore the new channels of communication. These new channels of communication can help KB Autosys to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
KB Autosys Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of KB Autosys are -
Low interest rates
– Even though inflation is raising its head in most developed economies, KB Autosys 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.
Building a culture of innovation
– managers at KB Autosys 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 Auto & Truck Parts industry.
Using analytics as competitive advantage
– KB Autosys has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled KB Autosys to build a competitive advantage using analytics. The analytics driven competitive advantage can help KB Autosys to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, KB Autosys can use these opportunities to build new business models that can help the communities that KB Autosys operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Better consumer reach
– The expansion of the 5G network will help KB Autosys to increase its market reach. KB Autosys 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects KB Autosys can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for KB Autosys 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 KB Autosys to hire the very best people irrespective of their geographical location.
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 KB Autosys 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 KB Autosys has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help KB Autosys to build a more holistic ecosystem for KB Autosys products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– KB Autosys can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Developing new processes and practices
– KB Autosys can develop new processes and procedures in Auto & Truck Parts 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for KB Autosys in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for KB Autosys 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.
Threats KB Autosys External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of KB Autosys are -
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 KB Autosys in the Auto & Truck Parts sector and impact the bottomline of the organization.
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 KB Autosys.
Stagnating economy with rate increase
– KB Autosys 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 Auto & Truck Parts industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for KB Autosys in Auto & Truck Parts industry. The Auto & Truck Parts 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.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. KB Autosys can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. KB Autosys 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents KB Autosys with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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. KB Autosys needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, KB Autosys 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 KB Autosys prominent markets.
Shortening product life cycle
– it is one of the major threat that KB Autosys is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, KB Autosys may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
Technology acceleration in Forth Industrial Revolution
– KB Autosys has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, KB Autosys needs to keep up with the evolution of technology in the Auto & Truck Parts 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 KB Autosys Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at KB Autosys 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 KB Autosys 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 KB Autosys 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 KB Autosys 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 KB Autosys needs to make to build a sustainable competitive advantage.