SWOT Analysis / TOWS Matrix for Dong-A Hwa Sung (South Korea)
Based on various researches at Oak Spring University , Dong-A Hwa Sung is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
increasing household debt because of falling income levels, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dong-A Hwa Sung can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dong-A Hwa Sung, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dong-A Hwa Sung 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 Dong-A Hwa Sung can be done for the following purposes –
1. Strategic planning of Dong-A Hwa Sung
2. Improving business portfolio management of Dong-A Hwa Sung
3. Assessing feasibility of the new initiative in South Korea
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dong-A Hwa Sung
Strengths of Dong-A Hwa Sung | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dong-A Hwa Sung are -
High switching costs
– The high switching costs that Dong-A Hwa Sung 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.
High brand equity
– Dong-A Hwa Sung has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dong-A Hwa Sung to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Dong-A Hwa Sung is one of the leading players in the Fabricated Plastic & Rubber 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.
Training and development
– Dong-A Hwa Sung has one of the best training and development program in Basic Materials 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.
Strong track record of project management in the Fabricated Plastic & Rubber industry
– Dong-A Hwa Sung is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Fabricated Plastic & Rubber industry
– Dong-A Hwa Sung has clearly differentiated products in the market place. This has enabled Dong-A Hwa Sung to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped Dong-A Hwa Sung to invest into research and development (R&D) and innovation.
Learning organization
- Dong-A Hwa Sung 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 Dong-A Hwa Sung is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dong-A Hwa Sung emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Dong-A Hwa Sung has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dong-A Hwa Sung staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Dong-A Hwa Sung in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Dong-A Hwa Sung is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Low bargaining power of suppliers
– Suppliers of Dong-A Hwa Sung in the Basic Materials sector have low bargaining power. Dong-A Hwa Sung has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dong-A Hwa Sung to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Dong-A Hwa Sung has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fabricated Plastic & Rubber industry. Secondly the value chain collaborators of Dong-A Hwa Sung have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Dong-A Hwa Sung | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dong-A Hwa Sung are -
High cash cycle compare to competitors
Dong-A Hwa Sung has a high cash cycle compare to other players in the Fabricated Plastic & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Fabricated Plastic & Rubber industry, Dong-A Hwa Sung 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.
Employees’ less understanding of Dong-A Hwa Sung strategy
– From the outside it seems that the employees of Dong-A Hwa Sung 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 bargaining power of channel partners in Fabricated Plastic & Rubber industry
– because of the regulatory requirements in South Korea, Dong-A Hwa Sung 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 Fabricated Plastic & Rubber industry.
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 Dong-A Hwa Sung supply chain. Even after few cautionary changes, Dong-A Hwa Sung is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dong-A Hwa Sung vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Dong-A Hwa Sung, it seems that company is thinking out the frontier risks that can impact Fabricated Plastic & Rubber industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative at Dong-A Hwa Sung, in the dynamic environment of Fabricated Plastic & Rubber industry it has struggled to respond to the nimble upstart competition. Dong-A Hwa Sung has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Dong-A Hwa Sung is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but Dong-A Hwa Sung needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dong-A Hwa Sung to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Dong-A Hwa Sung needs to have more collaboration between its sales team and marketing team. Sales professionals in the Fabricated Plastic & Rubber industry have deep experience in developing customer relationships. Marketing department at Dong-A Hwa Sung can leverage the sales team experience to cultivate customer relationships as Dong-A Hwa Sung is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Dong-A Hwa Sung has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fabricated Plastic & Rubber industry over the last five years. Dong-A Hwa Sung 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.
High operating costs
– Compare to the competitors, Dong-A Hwa Sung has high operating costs in the Fabricated Plastic & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dong-A Hwa Sung lucrative customers.
Dong-A Hwa Sung Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dong-A Hwa Sung are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Fabricated Plastic & Rubber industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dong-A Hwa Sung 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. Dong-A Hwa Sung 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.
Developing new processes and practices
– Dong-A Hwa Sung can develop new processes and procedures in Fabricated Plastic & Rubber 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Fabricated Plastic & Rubber industry, but it has also influenced the consumer preferences. Dong-A Hwa Sung can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Dong-A Hwa Sung has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fabricated Plastic & Rubber sector. This continuous investment in analytics has enabled Dong-A Hwa Sung to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dong-A Hwa Sung to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Dong-A Hwa Sung can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Dong-A Hwa Sung can improve the customer journey of consumers in the Fabricated Plastic & Rubber 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.
Creating value in data economy
– The success of analytics program of Dong-A Hwa Sung has opened avenues for new revenue streams for the organization in Fabricated Plastic & Rubber industry. This can help Dong-A Hwa Sung to build a more holistic ecosystem for Dong-A Hwa Sung products in the Fabricated Plastic & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dong-A Hwa Sung 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 Dong-A Hwa Sung to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dong-A Hwa Sung 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dong-A Hwa Sung can use these opportunities to build new business models that can help the communities that Dong-A Hwa Sung operates in. Secondly it can use opportunities from government spending in Fabricated Plastic & Rubber sector.
Manufacturing automation
– Dong-A Hwa Sung can use the latest technology developments to improve its manufacturing and designing process in Fabricated Plastic & Rubber 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.
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 Dong-A Hwa Sung 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.
Use of Bitcoin and other crypto currencies for transactions in Fabricated Plastic & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Dong-A Hwa Sung in the Fabricated Plastic & Rubber industry. Now Dong-A Hwa Sung can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Dong-A Hwa Sung External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dong-A Hwa Sung 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 Dong-A Hwa Sung in the Fabricated Plastic & Rubber sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Dong-A Hwa Sung with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
Shortening product life cycle
– it is one of the major threat that Dong-A Hwa Sung is facing in Fabricated Plastic & Rubber 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, Dong-A Hwa Sung may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fabricated Plastic & Rubber sector.
Environmental challenges
– Dong-A Hwa Sung 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. Dong-A Hwa Sung can take advantage of this fund but it will also bring new competitors in the Fabricated Plastic & Rubber industry.
Easy access to finance
– Easy access to finance in Fabricated Plastic & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dong-A Hwa Sung can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Dong-A Hwa Sung.
Stagnating economy with rate increase
– Dong-A Hwa Sung 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 Fabricated Plastic & Rubber industry.
Increasing wage structure of Dong-A Hwa Sung
– 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 Dong-A Hwa Sung.
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. Dong-A Hwa Sung needs to understand the core reasons impacting the Fabricated Plastic & Rubber industry. This will help it in building a better workplace.
Regulatory challenges
– Dong-A Hwa Sung 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 Fabricated Plastic & Rubber industry regulations.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dong-A Hwa Sung 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 Dong-A Hwa Sung prominent markets.
Weighted SWOT Analysis of Dong-A Hwa Sung Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dong-A Hwa Sung 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 Dong-A Hwa Sung 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 Dong-A Hwa Sung 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 Dong-A Hwa Sung 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 Dong-A Hwa Sung needs to make to build a sustainable competitive advantage.
