Oriental Precision & Eng (14940) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Oriental Precision & Eng (South Korea)

Based on various researches at Oak Spring University , Oriental Precision & Eng is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, talent flight as more people leaving formal jobs, increasing commodity prices, wage bills are increasing, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Oriental Precision & Eng

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Oriental Precision & Eng can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oriental Precision & Eng, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oriental Precision & Eng 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Oriental Precision & Eng can be done for the following purposes –
1. Strategic planning of Oriental Precision & Eng
2. Improving business portfolio management of Oriental Precision & Eng
3. Assessing feasibility of the new initiative in South Korea
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oriental Precision & Eng

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Strengths of Oriental Precision & Eng | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Oriental Precision & Eng are -

Cross disciplinary teams

– Horizontal connected teams at the Oriental Precision & Eng 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.

Operational resilience

– The operational resilience strategy of Oriental Precision & Eng comprises – understanding the underlying the factors in the Construction Services 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.

Ability to recruit top talent

– Oriental Precision & Eng is one of the leading players in the Construction Services 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

– Oriental Precision & Eng has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Oriental Precision & Eng have helped the firm to develop new products and bring them quickly to the marketplace.

Training and development

– Oriental Precision & Eng has one of the best training and development program in Capital Goods 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 Construction Services industry

– Oriental Precision & Eng has clearly differentiated products in the market place. This has enabled Oriental Precision & Eng to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Oriental Precision & Eng to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Oriental Precision & Eng in the Capital Goods sector have low bargaining power. Oriental Precision & Eng has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oriental Precision & Eng to manage not only supply disruptions but also source products at highly competitive prices.

Learning organization

- Oriental Precision & Eng 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 Oriental Precision & Eng is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Oriental Precision & Eng emphasize – knowledge, initiative, and innovation.

High brand equity

– Oriental Precision & Eng has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oriental Precision & Eng to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Strong track record of project management in the Construction Services industry

– Oriental Precision & Eng is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Effective Research and Development (R&D)

– Oriental Precision & Eng has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Oriental Precision & Eng staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Digital Transformation in Construction Services industry

- digital transformation varies from industry to industry. For Oriental Precision & Eng digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oriental Precision & Eng 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.

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Weaknesses of Oriental Precision & Eng | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Oriental Precision & Eng are -

Slow to strategic competitive environment developments

– As Oriental Precision & Eng is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.

Need for greater diversity

– Oriental Precision & Eng has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at Oriental Precision & Eng 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.

High bargaining power of channel partners in Construction Services industry

– because of the regulatory requirements in South Korea, Oriental Precision & Eng 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 Construction Services industry.

Lack of clear differentiation of Oriental Precision & Eng products

– To increase the profitability and margins on the products, Oriental Precision & Eng needs to provide more differentiated products than what it is currently offering in the marketplace.

Compensation and incentives

– The revenue per employee of Oriental Precision & Eng is just above the Construction Services 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.

Aligning sales with marketing

– From the outside it seems that Oriental Precision & Eng needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Oriental Precision & Eng can leverage the sales team experience to cultivate customer relationships as Oriental Precision & Eng is planning to shift buying processes online.

High dependence on Oriental Precision & Eng ‘s star products

– The top 2 products and services of Oriental Precision & Eng still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Oriental Precision & Eng has relatively successful track record of launching new products.

High cash cycle compare to competitors

Oriental Precision & Eng has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

No frontier risks strategy

– From the 10K / annual statement of Oriental Precision & Eng, it seems that company is thinking out the frontier risks that can impact Construction Services 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 Oriental Precision & Eng has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Oriental Precision & Eng should strive to include more intangible value offerings along with its core products and services.

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Oriental Precision & Eng Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Oriental Precision & Eng are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oriental Precision & Eng 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 Oriental Precision & Eng to hire the very best people irrespective of their geographical location.

Learning at scale

– Online learning technologies has now opened space for Oriental Precision & Eng 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.

Manufacturing automation

– Oriental Precision & Eng can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.

Better consumer reach

– The expansion of the 5G network will help Oriental Precision & Eng to increase its market reach. Oriental Precision & Eng 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Oriental Precision & Eng 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 Oriental Precision & Eng to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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. Oriental Precision & Eng can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Oriental Precision & Eng in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oriental Precision & Eng 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. Oriental Precision & Eng 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.

Using analytics as competitive advantage

– Oriental Precision & Eng has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Oriental Precision & Eng to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oriental Precision & Eng 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 Oriental Precision & Eng 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 Construction Services industry.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Oriental Precision & Eng is facing challenges because of the dominance of functional experts in the organization. Oriental Precision & Eng can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Oriental Precision & Eng 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, Oriental Precision & Eng 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.

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Threats Oriental Precision & Eng External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Oriental Precision & Eng are -

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 Oriental Precision & Eng.

Technology acceleration in Forth Industrial Revolution

– Oriental Precision & Eng has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Oriental Precision & Eng needs to keep up with the evolution of technology in the Construction Services 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Oriental Precision & Eng with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.

Shortening product life cycle

– it is one of the major threat that Oriental Precision & Eng is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Oriental Precision & Eng 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 Oriental Precision & Eng

– 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 Oriental Precision & Eng.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Oriental Precision & Eng 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 Oriental Precision & Eng prominent markets.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Oriental Precision & Eng may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.

Environmental challenges

– Oriental Precision & Eng 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. Oriental Precision & Eng can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

Consumer confidence and its impact on Oriental Precision & Eng 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 Construction Services industry and other sectors.

Easy access to finance

– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oriental Precision & Eng can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Stagnating economy with rate increase

– Oriental Precision & Eng 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 Construction Services industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Oriental Precision & Eng in Construction Services industry. The Construction Services 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.

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Weighted SWOT Analysis of Oriental Precision & Eng Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Oriental Precision & Eng 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 Oriental Precision & Eng 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 Oriental Precision & Eng 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 Oriental Precision & Eng 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 Oriental Precision & Eng needs to make to build a sustainable competitive advantage.

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