Seong An (11300) SWOT Analysis / TOWS Matrix / MBA Resources
Textiles - Non Apparel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Seong An (South Korea)
Based on various researches at Oak Spring University , Seong An is operating in a macro-environment that has been destablized by – there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, 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 Seong An can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seong An, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seong An 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 Seong An can be done for the following purposes –
1. Strategic planning of Seong An
2. Improving business portfolio management of Seong An
3. Assessing feasibility of the new initiative in South Korea
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Seong An
Strengths of Seong An | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seong An are -
Low bargaining power of suppliers
– Suppliers of Seong An in the Consumer Cyclical sector have low bargaining power. Seong An has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seong An to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Seong An 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.
Analytics focus
– Seong An is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Textiles - Non Apparel industry. The technology infrastructure of South Korea is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy of Seong An comprises – understanding the underlying the factors in the Textiles - Non Apparel 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.
Successful track record of launching new products
– Seong An has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seong An 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.
Learning organization
- Seong An 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 Seong An is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Seong An emphasize – knowledge, initiative, and innovation.
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For Seong An digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Seong An 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.
Innovation driven organization
– Seong An is one of the most innovative firm in Textiles - Non Apparel sector.
Training and development
– Seong An has one of the best training and development program in Consumer Cyclical 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.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Seong An has clearly differentiated products in the market place. This has enabled Seong An to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Seong An to invest into research and development (R&D) and innovation.
High brand equity
– Seong An has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Seong An to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Seong An 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.
Weaknesses of Seong An | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seong An are -
High dependence on Seong An ‘s star products
– The top 2 products and services of Seong An still accounts for major business revenue. This dependence on star products in Textiles - Non Apparel industry has resulted into insufficient focus on developing new products, even though Seong An has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Seong An 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.
No frontier risks strategy
– From the 10K / annual statement of Seong An, it seems that company is thinking out the frontier risks that can impact Textiles - Non Apparel 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.
Increasing silos among functional specialists
– The organizational structure of Seong An is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Seong An needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Seong An to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Seong An is slow explore the new channels of communication. These new channels of communication can help Seong An to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of South Korea, Seong An needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Seong An has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Seong An should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Seong An, in the dynamic environment of Textiles - Non Apparel industry it has struggled to respond to the nimble upstart competition. Seong An has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Seong An products
– To increase the profitability and margins on the products, Seong An needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Seong An has high operating costs in the Textiles - Non Apparel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Seong An lucrative customers.
Employees’ less understanding of Seong An strategy
– From the outside it seems that the employees of Seong An 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.
Seong An Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Seong An are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Seong An 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. Seong An 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seong An in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Textiles - Non Apparel industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Seong An 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Seong An can use these opportunities to build new business models that can help the communities that Seong An operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Developing new processes and practices
– Seong An can develop new processes and procedures in Textiles - Non Apparel 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Seong An 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 Seong An to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Seong An can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seong An can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Seong An 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.
Manufacturing automation
– Seong An can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non Apparel 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.
Learning at scale
– Online learning technologies has now opened space for Seong An 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.
Creating value in data economy
– The success of analytics program of Seong An has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Seong An to build a more holistic ecosystem for Seong An products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Seong An in the Textiles - Non Apparel industry. Now Seong An can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Seong An External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Seong An are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seong An 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 Seong An prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Seong An with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
Regulatory challenges
– Seong An 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 Textiles - Non Apparel industry regulations.
Consumer confidence and its impact on Seong An 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 Textiles - Non Apparel industry and other sectors.
Environmental challenges
– Seong An 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. Seong An can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
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.
Stagnating economy with rate increase
– Seong An 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 Textiles - Non Apparel industry.
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. Seong An 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.
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. Seong An needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Seong An may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
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 Seong An in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Seong An is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Seong An 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.
Weighted SWOT Analysis of Seong An Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Seong An 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 Seong An 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 Seong An 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 Seong An 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 Seong An needs to make to build a sustainable competitive advantage.
