SWOT Analysis / TOWS Matrix for Sam-A Aluminiu (South Korea)
Based on various researches at Oak Spring University , Sam-A Aluminiu is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, wage bills are increasing, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, 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 Sam-A Aluminiu can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sam-A Aluminiu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sam-A Aluminiu 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 Sam-A Aluminiu can be done for the following purposes –
1. Strategic planning of Sam-A Aluminiu
2. Improving business portfolio management of Sam-A Aluminiu
3. Assessing feasibility of the new initiative in South Korea
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sam-A Aluminiu
Strengths of Sam-A Aluminiu | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sam-A Aluminiu are -
Learning organization
- Sam-A Aluminiu 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 Sam-A Aluminiu is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sam-A Aluminiu emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Sam-A Aluminiu has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Sam-A Aluminiu have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Sam-A Aluminiu digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sam-A Aluminiu 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.
Effective Research and Development (R&D)
– Sam-A Aluminiu has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sam-A Aluminiu staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Sam-A Aluminiu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sam-A Aluminiu 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.
Organizational Resilience of Sam-A Aluminiu
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sam-A Aluminiu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Sam-A Aluminiu 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.
High switching costs
– The high switching costs that Sam-A Aluminiu 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
– Sam-A Aluminiu is one of the leading players in the Misc. Fabricated Products 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.
Ability to lead change in Misc. Fabricated Products
– Sam-A Aluminiu is one of the leading players in the Misc. Fabricated Products industry in South Korea. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in South Korea but also across the existing markets. The ability to lead change has enabled Sam-A Aluminiu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Misc. Fabricated Products industry
– Sam-A Aluminiu is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Sam-A Aluminiu has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sam-A Aluminiu to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Sam-A Aluminiu | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sam-A Aluminiu are -
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in South Korea, Sam-A Aluminiu 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 Misc. Fabricated Products industry.
Ability to respond to the competition
– As the decision making is very deliberative at Sam-A Aluminiu, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Sam-A Aluminiu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Sam-A Aluminiu ‘s star products
– The top 2 products and services of Sam-A Aluminiu still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Sam-A Aluminiu has relatively successful track record of launching new products.
Lack of clear differentiation of Sam-A Aluminiu products
– To increase the profitability and margins on the products, Sam-A Aluminiu needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Sam-A Aluminiu is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
Interest costs
– Compare to the competition, Sam-A Aluminiu 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Fabricated Products industry, Sam-A Aluminiu 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.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at Sam-A Aluminiu 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, Sam-A Aluminiu is slow explore the new channels of communication. These new channels of communication can help Sam-A Aluminiu to provide better information regarding Misc. Fabricated Products products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Sam-A Aluminiu, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
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 Sam-A Aluminiu supply chain. Even after few cautionary changes, Sam-A Aluminiu is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sam-A Aluminiu vulnerable to further global disruptions in South East Asia.
Sam-A Aluminiu Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sam-A Aluminiu are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sam-A Aluminiu 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. Sam-A Aluminiu 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sam-A Aluminiu is facing challenges because of the dominance of functional experts in the organization. Sam-A Aluminiu can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sam-A Aluminiu can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Sam-A Aluminiu 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sam-A Aluminiu 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 Sam-A Aluminiu 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, Sam-A Aluminiu 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.
Using analytics as competitive advantage
– Sam-A Aluminiu has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Sam-A Aluminiu to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sam-A Aluminiu 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, Sam-A Aluminiu can use these opportunities to build new business models that can help the communities that Sam-A Aluminiu operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
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. Sam-A Aluminiu can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Sam-A Aluminiu 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sam-A Aluminiu 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 Sam-A Aluminiu to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Sam-A Aluminiu 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 Misc. Fabricated Products industry.
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sam-A Aluminiu in the Misc. Fabricated Products industry. Now Sam-A Aluminiu can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Sam-A Aluminiu External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sam-A Aluminiu are -
Increasing wage structure of Sam-A Aluminiu
– 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 Sam-A Aluminiu.
Environmental challenges
– Sam-A Aluminiu 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. Sam-A Aluminiu can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
High dependence on third party suppliers
– Sam-A Aluminiu 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.
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 Sam-A Aluminiu business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sam-A Aluminiu 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 Misc. Fabricated Products industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sam-A Aluminiu 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 Sam-A Aluminiu prominent markets.
Regulatory challenges
– Sam-A Aluminiu 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 Misc. Fabricated Products industry regulations.
Consumer confidence and its impact on Sam-A Aluminiu 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 Misc. Fabricated Products industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Sam-A Aluminiu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products 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. Sam-A Aluminiu needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
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 Sam-A Aluminiu.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sam-A Aluminiu in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Shortening product life cycle
– it is one of the major threat that Sam-A Aluminiu is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Sam-A Aluminiu Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sam-A Aluminiu 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 Sam-A Aluminiu 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 Sam-A Aluminiu 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 Sam-A Aluminiu 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 Sam-A Aluminiu needs to make to build a sustainable competitive advantage.
