SKCS (224020) SWOT Analysis / TOWS Matrix / MBA Resources
Photography
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SKCS (South Korea)
Based on various researches at Oak Spring University , SKCS is operating in a macro-environment that has been destablized by – there is backlash against globalization, 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%, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SKCS can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SKCS, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SKCS 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 SKCS can be done for the following purposes –
1. Strategic planning of SKCS
2. Improving business portfolio management of SKCS
3. Assessing feasibility of the new initiative in South Korea
4. Making a Photography sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SKCS
Strengths of SKCS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SKCS are -
Diverse revenue streams
– SKCS is present in almost all the verticals within the Photography industry. This has provided SKCS 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.
Operational resilience
– The operational resilience strategy of SKCS comprises – understanding the underlying the factors in the Photography 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.
Cross disciplinary teams
– Horizontal connected teams at the SKCS 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.
Highly skilled collaborators
– SKCS has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Photography industry. Secondly the value chain collaborators of SKCS have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– SKCS 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.
Superior customer experience
– The customer experience strategy of SKCS in Photography industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– SKCS is one of the leading players in the Photography 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.
Effective Research and Development (R&D)
– SKCS has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SKCS staying ahead in the Photography industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– SKCS has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SKCS 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.
Strong track record of project management in the Photography industry
– SKCS is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that SKCS 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.
Innovation driven organization
– SKCS is one of the most innovative firm in Photography sector.
Weaknesses of SKCS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SKCS are -
High operating costs
– Compare to the competitors, SKCS has high operating costs in the Photography industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SKCS lucrative customers.
Need for greater diversity
– SKCS 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.
Capital Spending Reduction
– Even during the low interest decade, SKCS 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 Photography industry using digital technology.
High cash cycle compare to competitors
SKCS has a high cash cycle compare to other players in the Photography industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of South Korea, SKCS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 SKCS supply chain. Even after few cautionary changes, SKCS is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SKCS vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, SKCS 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.
Slow to strategic competitive environment developments
– As SKCS is one of the leading players in the Photography industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Photography industry in last five years.
Compensation and incentives
– The revenue per employee of SKCS is just above the Photography industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– From the outside it seems that SKCS needs to have more collaboration between its sales team and marketing team. Sales professionals in the Photography industry have deep experience in developing customer relationships. Marketing department at SKCS can leverage the sales team experience to cultivate customer relationships as SKCS is planning to shift buying processes online.
Lack of clear differentiation of SKCS products
– To increase the profitability and margins on the products, SKCS needs to provide more differentiated products than what it is currently offering in the marketplace.
SKCS Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SKCS are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for SKCS in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Photography industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Photography industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SKCS in the Photography industry. Now SKCS can target international markets with far fewer capital restrictions requirements than the existing system.
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 SKCS 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.
Leveraging digital technologies
– SKCS can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Photography industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SKCS 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. SKCS 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SKCS can use these opportunities to build new business models that can help the communities that SKCS operates in. Secondly it can use opportunities from government spending in Photography sector.
Loyalty marketing
– SKCS 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, SKCS 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 SKCS to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– SKCS can improve the customer journey of consumers in the Photography industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects SKCS can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at SKCS 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 Photography industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Photography industry, but it has also influenced the consumer preferences. SKCS can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help SKCS to increase its market reach. SKCS 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.
Threats SKCS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SKCS are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Photography industry are lowering. It can presents SKCS with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Photography sector.
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. SKCS needs to understand the core reasons impacting the Photography industry. This will help it in building a better workplace.
High dependence on third party suppliers
– SKCS 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.
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 SKCS in the Photography sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Photography industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SKCS can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SKCS in Photography industry. The Photography 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 SKCS 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 Photography industry and other sectors.
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.
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 SKCS business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that SKCS is facing in Photography sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– SKCS 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. SKCS can take advantage of this fund but it will also bring new competitors in the Photography industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SKCS 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 SKCS prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SKCS may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Photography sector.
Weighted SWOT Analysis of SKCS Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SKCS 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 SKCS 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 SKCS 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 SKCS 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 SKCS needs to make to build a sustainable competitive advantage.