Shinhan 3rd Special Purpose (257730) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shinhan 3rd Special Purpose (South Korea)
Based on various researches at Oak Spring University , Shinhan 3rd Special Purpose is operating in a macro-environment that has been destablized by – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, technology disruption, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Shinhan 3rd Special Purpose
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shinhan 3rd Special Purpose can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shinhan 3rd Special Purpose, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose can be done for the following purposes –
1. Strategic planning of Shinhan 3rd Special Purpose
2. Improving business portfolio management of Shinhan 3rd Special Purpose
3. Assessing feasibility of the new initiative in South Korea
4. Making a Misc. Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shinhan 3rd Special Purpose
Strengths of Shinhan 3rd Special Purpose | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shinhan 3rd Special Purpose are -
Sustainable margins compare to other players in Misc. Financial Services industry
– Shinhan 3rd Special Purpose has clearly differentiated products in the market place. This has enabled Shinhan 3rd Special Purpose to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Shinhan 3rd Special Purpose to invest into research and development (R&D) and innovation.
Learning organization
- Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shinhan 3rd Special Purpose emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Shinhan 3rd Special Purpose has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shinhan 3rd Special Purpose staying ahead in the Misc. Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Shinhan 3rd Special Purpose
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose in the Financial sector have low bargaining power. Shinhan 3rd Special Purpose has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shinhan 3rd Special Purpose to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Misc. Financial Services
– Shinhan 3rd Special Purpose is one of the leading players in the Misc. Financial Services industry in South Korea. Over the years it has not only transformed the business landscape in the Misc. Financial Services industry in South Korea but also across the existing markets. The ability to lead change has enabled Shinhan 3rd Special Purpose in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For Shinhan 3rd Special Purpose digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shinhan 3rd Special Purpose 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.
Cross disciplinary teams
– Horizontal connected teams at the Shinhan 3rd Special Purpose 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.
Successful track record of launching new products
– Shinhan 3rd Special Purpose has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shinhan 3rd Special Purpose 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.
Training and development
– Shinhan 3rd Special Purpose has one of the best training and development program in Financial 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.
Ability to recruit top talent
– Shinhan 3rd Special Purpose is one of the leading players in the Misc. Financial 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.
Innovation driven organization
– Shinhan 3rd Special Purpose is one of the most innovative firm in Misc. Financial Services sector.
Weaknesses of Shinhan 3rd Special Purpose | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shinhan 3rd Special Purpose are -
Lack of clear differentiation of Shinhan 3rd Special Purpose products
– To increase the profitability and margins on the products, Shinhan 3rd Special Purpose needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Shinhan 3rd Special Purpose is one of the leading players in the Misc. Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Financial Services industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shinhan 3rd Special Purpose is slow explore the new channels of communication. These new channels of communication can help Shinhan 3rd Special Purpose to provide better information regarding Misc. Financial Services products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Misc. Financial Services industry
– The stress on hiring functional specialists at Shinhan 3rd Special Purpose 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, Shinhan 3rd Special Purpose needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Shinhan 3rd Special Purpose is just above the Misc. Financial 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.
High cash cycle compare to competitors
Shinhan 3rd Special Purpose has a high cash cycle compare to other players in the Misc. Financial 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.
Capital Spending Reduction
– Even during the low interest decade, Shinhan 3rd Special Purpose 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 Misc. Financial Services industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Shinhan 3rd Special Purpose, it seems that company is thinking out the frontier risks that can impact Misc. Financial 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.
Increasing silos among functional specialists
– The organizational structure of Shinhan 3rd Special Purpose is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Shinhan 3rd Special Purpose needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shinhan 3rd Special Purpose to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Shinhan 3rd Special Purpose 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.
Shinhan 3rd Special Purpose Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shinhan 3rd Special Purpose are -
Creating value in data economy
– The success of analytics program of Shinhan 3rd Special Purpose has opened avenues for new revenue streams for the organization in Misc. Financial Services industry. This can help Shinhan 3rd Special Purpose to build a more holistic ecosystem for Shinhan 3rd Special Purpose products in the Misc. Financial 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 Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shinhan 3rd Special Purpose 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. Shinhan 3rd Special Purpose 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.
Building a culture of innovation
– managers at Shinhan 3rd Special Purpose 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 Misc. Financial Services industry.
Using analytics as competitive advantage
– Shinhan 3rd Special Purpose has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Financial Services sector. This continuous investment in analytics has enabled Shinhan 3rd Special Purpose to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shinhan 3rd Special Purpose to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Misc. Financial Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shinhan 3rd Special Purpose in the Misc. Financial Services industry. Now Shinhan 3rd Special Purpose can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Shinhan 3rd Special Purpose 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.
Learning at scale
– Online learning technologies has now opened space for Shinhan 3rd Special Purpose 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, Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose 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.
Developing new processes and practices
– Shinhan 3rd Special Purpose can develop new processes and procedures in Misc. Financial 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shinhan 3rd Special Purpose is facing challenges because of the dominance of functional experts in the organization. Shinhan 3rd Special Purpose can utilize new technology in the field of Misc. Financial Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Shinhan 3rd Special Purpose External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shinhan 3rd Special Purpose are -
Increasing wage structure of Shinhan 3rd Special Purpose
– 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 Shinhan 3rd Special Purpose.
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 Shinhan 3rd Special Purpose business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Shinhan 3rd Special Purpose 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 Misc. Financial Services industry regulations.
Environmental challenges
– Shinhan 3rd Special Purpose 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. Shinhan 3rd Special Purpose can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
Stagnating economy with rate increase
– Shinhan 3rd Special Purpose 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 Misc. Financial Services industry.
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.
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 Shinhan 3rd Special Purpose in the Misc. Financial 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 Shinhan 3rd Special Purpose.
Technology acceleration in Forth Industrial Revolution
– Shinhan 3rd Special Purpose has witnessed rapid integration of technology during Covid-19 in the Misc. Financial Services industry. As one of the leading players in the industry, Shinhan 3rd Special Purpose needs to keep up with the evolution of technology in the Misc. Financial 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shinhan 3rd Special Purpose in Misc. Financial Services industry. The Misc. Financial 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.
Consumer confidence and its impact on Shinhan 3rd Special Purpose 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 Misc. Financial Services industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Shinhan 3rd Special Purpose with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Financial Services sector.
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.
Weighted SWOT Analysis of Shinhan 3rd Special Purpose Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose 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 Shinhan 3rd Special Purpose needs to make to build a sustainable competitive advantage.