Eomji House (224810) SWOT Analysis / TOWS Matrix / MBA Resources
Business Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Eomji House (South Korea)
Based on various researches at Oak Spring University , Eomji House is operating in a macro-environment that has been destablized by – 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%, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing energy prices, increasing household debt because of falling income levels,
competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Eomji House can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eomji House, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eomji House 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 Eomji House can be done for the following purposes –
1. Strategic planning of Eomji House
2. Improving business portfolio management of Eomji House
3. Assessing feasibility of the new initiative in South Korea
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eomji House
Strengths of Eomji House | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eomji House are -
High switching costs
– The high switching costs that Eomji House 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.
Training and development
– Eomji House has one of the best training and development program in Services 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.
Effective Research and Development (R&D)
– Eomji House has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Eomji House staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Eomji House in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Eomji House 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 Eomji House is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Eomji House emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Eomji House is present in almost all the verticals within the Business Services industry. This has provided Eomji House a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Eomji House has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eomji House 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.
Low bargaining power of suppliers
– Suppliers of Eomji House in the Services sector have low bargaining power. Eomji House has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eomji House to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Business Services industry
– Eomji House has clearly differentiated products in the market place. This has enabled Eomji House to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped Eomji House to invest into research and development (R&D) and innovation.
Organizational Resilience of Eomji House
– The covid-19 pandemic has put organizational resilience at the centre of everthing Eomji House does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Business Services
– Eomji House is one of the leading players in the Business Services industry in South Korea. Over the years it has not only transformed the business landscape in the Business Services industry in South Korea but also across the existing markets. The ability to lead change has enabled Eomji House in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Eomji House has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Eomji House have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Eomji House | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eomji House are -
Capital Spending Reduction
– Even during the low interest decade, Eomji House 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 Business Services industry using digital technology.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in South Korea, Eomji House 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 Business Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Eomji House, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. Eomji House has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of South Korea, Eomji House needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Eomji House is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Need for greater diversity
– Eomji House 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.
Lack of clear differentiation of Eomji House products
– To increase the profitability and margins on the products, Eomji House needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Eomji House has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Eomji House should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Business Services industry, Eomji House 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.
Increasing silos among functional specialists
– The organizational structure of Eomji House is dominated by functional specialists. It is not different from other players in the Business Services industry, but Eomji House needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eomji House to focus more on services in the Business Services industry rather than just following the product oriented approach.
High dependence on Eomji House ‘s star products
– The top 2 products and services of Eomji House still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Eomji House has relatively successful track record of launching new products.
Eomji House Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Eomji House are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eomji House is facing challenges because of the dominance of functional experts in the organization. Eomji House can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Eomji House has opened avenues for new revenue streams for the organization in Business Services industry. This can help Eomji House to build a more holistic ecosystem for Eomji House products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eomji House 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 Eomji House to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Eomji House has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled Eomji House to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eomji House 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 Eomji House to increase its market reach. Eomji House 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.
Developing new processes and practices
– Eomji House can develop new processes and procedures in Business Services 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 Eomji House 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 Eomji House 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.
Building a culture of innovation
– managers at Eomji House 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 Business Services industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eomji House can use these opportunities to build new business models that can help the communities that Eomji House operates in. Secondly it can use opportunities from government spending in Business Services sector.
Learning at scale
– Online learning technologies has now opened space for Eomji House 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eomji House 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 Eomji House 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. Eomji House can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Eomji House External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Eomji House are -
Shortening product life cycle
– it is one of the major threat that Eomji House is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Eomji House 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.
Stagnating economy with rate increase
– Eomji House 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 Business Services industry.
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 Eomji House in the Business Services sector and impact the bottomline of the organization.
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 Eomji House.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Eomji House may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eomji House 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 Eomji House prominent markets.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eomji House can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents Eomji House with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.
Regulatory challenges
– Eomji House 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 Business Services industry regulations.
Environmental challenges
– Eomji House 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. Eomji House can take advantage of this fund but it will also bring new competitors in the Business Services industry.
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. Eomji House needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Consumer confidence and its impact on Eomji House 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 Business Services industry and other sectors.
Weighted SWOT Analysis of Eomji House Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Eomji House 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 Eomji House 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 Eomji House 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 Eomji House 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 Eomji House needs to make to build a sustainable competitive advantage.