SWOT Analysis / TOWS Matrix for Hansol Pns (South Korea)
Based on various researches at Oak Spring University , Hansol Pns is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hansol Pns can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hansol Pns, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hansol Pns 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 Hansol Pns can be done for the following purposes –
1. Strategic planning of Hansol Pns
2. Improving business portfolio management of Hansol Pns
3. Assessing feasibility of the new initiative in South Korea
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hansol Pns
Strengths of Hansol Pns | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hansol Pns are -
Ability to lead change in Office Supplies
– Hansol Pns is one of the leading players in the Office Supplies industry in South Korea. Over the years it has not only transformed the business landscape in the Office Supplies industry in South Korea but also across the existing markets. The ability to lead change has enabled Hansol Pns in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Hansol Pns in the Consumer/Non-Cyclical sector have low bargaining power. Hansol Pns has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hansol Pns to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Hansol Pns 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 Hansol Pns is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hansol Pns emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Hansol Pns comprises – understanding the underlying the factors in the Office Supplies 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.
Analytics focus
– Hansol Pns 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 Office Supplies 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.
Highly skilled collaborators
– Hansol Pns has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Supplies industry. Secondly the value chain collaborators of Hansol Pns have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Office Supplies industry
– Hansol Pns has clearly differentiated products in the market place. This has enabled Hansol Pns to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped Hansol Pns to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Hansol Pns 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.
Superior customer experience
– The customer experience strategy of Hansol Pns in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hansol Pns has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hansol Pns 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.
Digital Transformation in Office Supplies industry
- digital transformation varies from industry to industry. For Hansol Pns digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hansol Pns 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.
Ability to recruit top talent
– Hansol Pns is one of the leading players in the Office Supplies industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses of Hansol Pns | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hansol Pns are -
Lack of clear differentiation of Hansol Pns products
– To increase the profitability and margins on the products, Hansol Pns needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of South Korea, Hansol Pns needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hansol Pns is slow explore the new channels of communication. These new channels of communication can help Hansol Pns to provide better information regarding Office Supplies products and services. It can also build an online community to further reach out to potential customers.
High dependence on Hansol Pns ‘s star products
– The top 2 products and services of Hansol Pns still accounts for major business revenue. This dependence on star products in Office Supplies industry has resulted into insufficient focus on developing new products, even though Hansol Pns has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Hansol Pns is dominated by functional specialists. It is not different from other players in the Office Supplies industry, but Hansol Pns needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hansol Pns to focus more on services in the Office Supplies industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Hansol Pns has high operating costs in the Office Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hansol Pns lucrative customers.
Interest costs
– Compare to the competition, Hansol Pns 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.
Aligning sales with marketing
– From the outside it seems that Hansol Pns needs to have more collaboration between its sales team and marketing team. Sales professionals in the Office Supplies industry have deep experience in developing customer relationships. Marketing department at Hansol Pns can leverage the sales team experience to cultivate customer relationships as Hansol Pns is planning to shift buying processes online.
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 Hansol Pns supply chain. Even after few cautionary changes, Hansol Pns is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hansol Pns vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Hansol Pns 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.
High bargaining power of channel partners in Office Supplies industry
– because of the regulatory requirements in South Korea, Hansol Pns 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 Office Supplies industry.
Hansol Pns Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hansol Pns are -
Loyalty marketing
– Hansol Pns 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.
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. Hansol Pns can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hansol Pns 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 Hansol Pns 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.
Better consumer reach
– The expansion of the 5G network will help Hansol Pns to increase its market reach. Hansol Pns 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Office Supplies industry, but it has also influenced the consumer preferences. Hansol Pns can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hansol Pns is facing challenges because of the dominance of functional experts in the organization. Hansol Pns can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hansol Pns 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 Hansol Pns to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hansol Pns can use these opportunities to build new business models that can help the communities that Hansol Pns operates in. Secondly it can use opportunities from government spending in Office Supplies sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hansol Pns 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 Hansol Pns to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hansol Pns 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. Hansol Pns 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.
Developing new processes and practices
– Hansol Pns can develop new processes and procedures in Office Supplies 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hansol Pns can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Hansol Pns External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hansol Pns are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents Hansol Pns with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.
Shortening product life cycle
– it is one of the major threat that Hansol Pns is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Hansol Pns 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 Office Supplies industry and other sectors.
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 Hansol Pns business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hansol Pns may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Supplies sector.
Technology acceleration in Forth Industrial Revolution
– Hansol Pns has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, Hansol Pns needs to keep up with the evolution of technology in the Office Supplies 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.
Increasing wage structure of Hansol Pns
– 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 Hansol Pns.
Stagnating economy with rate increase
– Hansol Pns 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 Office Supplies industry.
Easy access to finance
– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hansol Pns can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Hansol Pns needs to understand the core reasons impacting the Office Supplies industry. This will help it in building a better workplace.
Environmental challenges
– Hansol Pns 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. Hansol Pns can take advantage of this fund but it will also bring new competitors in the Office Supplies 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. Hansol Pns 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Hansol Pns Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hansol Pns 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 Hansol Pns 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 Hansol Pns 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 Hansol Pns 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 Hansol Pns needs to make to build a sustainable competitive advantage.