Dongbang Trans (4140) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Dongbang Trans (South Korea)
Based on various researches at Oak Spring University , Dongbang Trans is operating in a macro-environment that has been destablized by – technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing commodity prices, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dongbang Trans can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dongbang Trans, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dongbang Trans 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 Dongbang Trans can be done for the following purposes –
1. Strategic planning of Dongbang Trans
2. Improving business portfolio management of Dongbang Trans
3. Assessing feasibility of the new initiative in South Korea
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dongbang Trans
Strengths of Dongbang Trans | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dongbang Trans are -
Learning organization
- Dongbang Trans 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 Dongbang Trans is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dongbang Trans emphasize – knowledge, initiative, and innovation.
Ability to lead change in Trucking
– Dongbang Trans is one of the leading players in the Trucking industry in South Korea. Over the years it has not only transformed the business landscape in the Trucking industry in South Korea but also across the existing markets. The ability to lead change has enabled Dongbang Trans in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Dongbang Trans comprises – understanding the underlying the factors in the Trucking 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.
Diverse revenue streams
– Dongbang Trans is present in almost all the verticals within the Trucking industry. This has provided Dongbang Trans 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.
Training and development
– Dongbang Trans has one of the best training and development program in Transportation 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.
Highly skilled collaborators
– Dongbang Trans has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Dongbang Trans have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Dongbang Trans has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dongbang Trans staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Dongbang Trans 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 switching costs
– The high switching costs that Dongbang Trans 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.
Low bargaining power of suppliers
– Suppliers of Dongbang Trans in the Transportation sector have low bargaining power. Dongbang Trans has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dongbang Trans to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Dongbang Trans has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dongbang Trans 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.
Ability to recruit top talent
– Dongbang Trans is one of the leading players in the Trucking 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.
Weaknesses of Dongbang Trans | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dongbang Trans are -
Lack of clear differentiation of Dongbang Trans products
– To increase the profitability and margins on the products, Dongbang Trans needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Dongbang Trans is dominated by functional specialists. It is not different from other players in the Trucking industry, but Dongbang Trans needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dongbang Trans to focus more on services in the Trucking industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Dongbang Trans 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 Trucking industry using digital technology.
High cash cycle compare to competitors
Dongbang Trans has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Dongbang Trans supply chain. Even after few cautionary changes, Dongbang Trans is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dongbang Trans vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Dongbang Trans, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. Dongbang Trans has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Dongbang Trans has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Trucking industry over the last five years. Dongbang Trans 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.
Compensation and incentives
– The revenue per employee of Dongbang Trans is just above the Trucking 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, Dongbang Trans is slow explore the new channels of communication. These new channels of communication can help Dongbang Trans to provide better information regarding Trucking products and services. It can also build an online community to further reach out to potential customers.
High dependence on Dongbang Trans ‘s star products
– The top 2 products and services of Dongbang Trans still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though Dongbang Trans has relatively successful track record of launching new products.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Dongbang Trans 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.
Dongbang Trans Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dongbang Trans are -
Building a culture of innovation
– managers at Dongbang Trans 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 Trucking industry.
Better consumer reach
– The expansion of the 5G network will help Dongbang Trans to increase its market reach. Dongbang Trans 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dongbang Trans can use these opportunities to build new business models that can help the communities that Dongbang Trans operates in. Secondly it can use opportunities from government spending in Trucking sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dongbang Trans 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 Dongbang Trans 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 Dongbang Trans to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Dongbang Trans 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.
Creating value in data economy
– The success of analytics program of Dongbang Trans has opened avenues for new revenue streams for the organization in Trucking industry. This can help Dongbang Trans to build a more holistic ecosystem for Dongbang Trans products in the Trucking 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, Dongbang Trans 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 Dongbang Trans to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Dongbang Trans 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.
Using analytics as competitive advantage
– Dongbang Trans has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled Dongbang Trans to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dongbang Trans to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Dongbang Trans can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dongbang Trans 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.
Manufacturing automation
– Dongbang Trans can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.
Threats Dongbang Trans External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dongbang Trans are -
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.
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 Dongbang Trans in the Trucking sector and impact the bottomline of the organization.
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 Dongbang Trans business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Dongbang Trans.
Stagnating economy with rate increase
– Dongbang Trans 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 Trucking industry.
Consumer confidence and its impact on Dongbang Trans 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 Trucking industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Dongbang Trans with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
Environmental challenges
– Dongbang Trans 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. Dongbang Trans can take advantage of this fund but it will also bring new competitors in the Trucking industry.
Technology acceleration in Forth Industrial Revolution
– Dongbang Trans has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Dongbang Trans needs to keep up with the evolution of technology in the Trucking 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.
High dependence on third party suppliers
– Dongbang Trans 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.
Regulatory challenges
– Dongbang Trans 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 Trucking industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Dongbang Trans may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Weighted SWOT Analysis of Dongbang Trans Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dongbang Trans 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 Dongbang Trans 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 Dongbang Trans 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 Dongbang Trans 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 Dongbang Trans needs to make to build a sustainable competitive advantage.