East Asia Holdings Investment (900110) SWOT Analysis / TOWS Matrix / MBA Resources
Footwear
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for East Asia Holdings Investment (South Korea)
Based on various researches at Oak Spring University , East Asia Holdings Investment is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, technology disruption,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of East Asia Holdings Investment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that East Asia Holdings Investment can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the East Asia Holdings Investment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which East Asia Holdings Investment 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 East Asia Holdings Investment can be done for the following purposes –
1. Strategic planning of East Asia Holdings Investment
2. Improving business portfolio management of East Asia Holdings Investment
3. Assessing feasibility of the new initiative in South Korea
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of East Asia Holdings Investment
Strengths of East Asia Holdings Investment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of East Asia Holdings Investment are -
Organizational Resilience of East Asia Holdings Investment
– The covid-19 pandemic has put organizational resilience at the centre of everthing East Asia Holdings Investment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of East Asia Holdings Investment in the Consumer Cyclical sector have low bargaining power. East Asia Holdings Investment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps East Asia Holdings Investment to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– East Asia Holdings Investment has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – East Asia Holdings Investment staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Footwear industry
– East Asia Holdings Investment has clearly differentiated products in the market place. This has enabled East Asia Holdings Investment to fetch slight price premium compare to the competitors in the Footwear industry. The sustainable margins have also helped East Asia Holdings Investment to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the East Asia Holdings Investment 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 East Asia Holdings Investment 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.
Successful track record of launching new products
– East Asia Holdings Investment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. East Asia Holdings Investment 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.
Highly skilled collaborators
– East Asia Holdings Investment has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Footwear industry. Secondly the value chain collaborators of East Asia Holdings Investment have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– East Asia Holdings Investment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled East Asia Holdings Investment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– East Asia Holdings Investment is one of the most innovative firm in Footwear sector.
Training and development
– East Asia Holdings Investment 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.
Operational resilience
– The operational resilience strategy of East Asia Holdings Investment comprises – understanding the underlying the factors in the Footwear 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.
Weaknesses of East Asia Holdings Investment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of East Asia Holdings Investment are -
Products dominated business model
– Even though East Asia Holdings Investment has some of the most successful models in the Footwear industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. East Asia Holdings Investment should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, East Asia Holdings Investment is slow explore the new channels of communication. These new channels of communication can help East Asia Holdings Investment to provide better information regarding Footwear 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 East Asia Holdings Investment, it seems that company is thinking out the frontier risks that can impact Footwear 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.
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at East Asia Holdings Investment 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.
Low market penetration in new markets
– Outside its home market of South Korea, East Asia Holdings Investment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on East Asia Holdings Investment ‘s star products
– The top 2 products and services of East Asia Holdings Investment still accounts for major business revenue. This dependence on star products in Footwear industry has resulted into insufficient focus on developing new products, even though East Asia Holdings Investment has relatively successful track record of launching new products.
High cash cycle compare to competitors
East Asia Holdings Investment has a high cash cycle compare to other players in the Footwear industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Footwear industry, East Asia Holdings Investment 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.
Ability to respond to the competition
– As the decision making is very deliberative at East Asia Holdings Investment, in the dynamic environment of Footwear industry it has struggled to respond to the nimble upstart competition. East Asia Holdings Investment has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 East Asia Holdings Investment supply chain. Even after few cautionary changes, East Asia Holdings Investment is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left East Asia Holdings Investment vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, East Asia Holdings Investment 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 Footwear industry using digital technology.
East Asia Holdings Investment Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of East Asia Holdings Investment are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, East Asia Holdings Investment is facing challenges because of the dominance of functional experts in the organization. East Asia Holdings Investment can utilize new technology in the field of Footwear industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, East Asia Holdings Investment 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.
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 East Asia Holdings Investment 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Footwear industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. East Asia Holdings Investment 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. East Asia Holdings Investment 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Footwear industry, but it has also influenced the consumer preferences. East Asia Holdings Investment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, East Asia Holdings Investment can use these opportunities to build new business models that can help the communities that East Asia Holdings Investment operates in. Secondly it can use opportunities from government spending in Footwear sector.
Using analytics as competitive advantage
– East Asia Holdings Investment has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Footwear sector. This continuous investment in analytics has enabled East Asia Holdings Investment to build a competitive advantage using analytics. The analytics driven competitive advantage can help East Asia Holdings Investment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help East Asia Holdings Investment to increase its market reach. East Asia Holdings Investment 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for East Asia Holdings Investment in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Footwear industry, and it will provide faster access to the consumers.
Loyalty marketing
– East Asia Holdings Investment 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects East Asia Holdings Investment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– East Asia Holdings Investment can use the latest technology developments to improve its manufacturing and designing process in Footwear 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.
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. East Asia Holdings Investment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats East Asia Holdings Investment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of East Asia Holdings Investment are -
Environmental challenges
– East Asia Holdings Investment 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. East Asia Holdings Investment can take advantage of this fund but it will also bring new competitors in the Footwear industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for East Asia Holdings Investment in Footwear industry. The Footwear 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.
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 East Asia Holdings Investment business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Footwear industry are lowering. It can presents East Asia Holdings Investment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Footwear sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, East Asia Holdings Investment 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 East Asia Holdings Investment prominent markets.
Technology acceleration in Forth Industrial Revolution
– East Asia Holdings Investment has witnessed rapid integration of technology during Covid-19 in the Footwear industry. As one of the leading players in the industry, East Asia Holdings Investment needs to keep up with the evolution of technology in the Footwear 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.
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.
Shortening product life cycle
– it is one of the major threat that East Asia Holdings Investment is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– East Asia Holdings Investment 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.
Easy access to finance
– Easy access to finance in Footwear industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. East Asia Holdings Investment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– East Asia Holdings Investment 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 Footwear industry regulations.
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 East Asia Holdings Investment in the Footwear sector and impact the bottomline of the organization.
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. East Asia Holdings Investment needs to understand the core reasons impacting the Footwear industry. This will help it in building a better workplace.
Weighted SWOT Analysis of East Asia Holdings Investment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at East Asia Holdings Investment 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 East Asia Holdings Investment 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 East Asia Holdings Investment 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 East Asia Holdings Investment 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 East Asia Holdings Investment needs to make to build a sustainable competitive advantage.