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 – there is backlash against globalization, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, 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 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.
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.
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.
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.
Ability to lead change in Fabricated Plastic & Rubber
– Dong-A Hwa Sung is one of the leading players in the Fabricated Plastic & Rubber industry in South Korea. Over the years it has not only transformed the business landscape in the Fabricated Plastic & Rubber industry in South Korea but also across the existing markets. The ability to lead change has enabled Dong-A Hwa Sung in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Diverse revenue streams
– Dong-A Hwa Sung is present in almost all the verticals within the Fabricated Plastic & Rubber industry. This has provided Dong-A Hwa Sung 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.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For Dong-A Hwa Sung digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dong-A Hwa Sung 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.
Operational resilience
– The operational resilience strategy of Dong-A Hwa Sung comprises – understanding the underlying the factors in the Fabricated Plastic & Rubber 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 Dong-A Hwa Sung
– The covid-19 pandemic has put organizational resilience at the centre of everthing Dong-A Hwa Sung 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 Dong-A Hwa Sung 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.
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.
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 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 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.
Lack of clear differentiation of Dong-A Hwa Sung products
– To increase the profitability and margins on the products, Dong-A Hwa Sung needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Compensation and incentives
– The revenue per employee of Dong-A Hwa Sung is just above the Fabricated Plastic & Rubber industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dong-A Hwa Sung is slow explore the new channels of communication. These new channels of communication can help Dong-A Hwa Sung to provide better information regarding Fabricated Plastic & Rubber products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Dong-A Hwa Sung is one of the leading players in the Fabricated Plastic & Rubber industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Fabricated Plastic & Rubber industry in last five years.
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.
Capital Spending Reduction
– Even during the low interest decade, Dong-A Hwa Sung 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 Fabricated Plastic & Rubber industry using digital technology.
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.
Products dominated business model
– Even though Dong-A Hwa Sung has some of the most successful models in the Fabricated Plastic & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dong-A Hwa Sung should strive to include more intangible value offerings along with its core products and services.
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 -
Leveraging digital technologies
– Dong-A Hwa Sung 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.
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.
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.
Building a culture of innovation
– managers at Dong-A Hwa Sung 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 Fabricated Plastic & Rubber industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dong-A Hwa Sung 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 Dong-A Hwa Sung to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Dong-A Hwa Sung 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dong-A Hwa Sung can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Dong-A Hwa Sung to increase its market reach. Dong-A Hwa Sung 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.
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.
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.
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.
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.
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.
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 -
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. Dong-A Hwa Sung 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.
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.
High dependence on third party suppliers
– Dong-A Hwa Sung 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.
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.
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.
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.
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 Dong-A Hwa Sung business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dong-A Hwa Sung in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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.
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.
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.
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.
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.