Luks Group Vietnam (366) SWOT Analysis / TOWS Matrix / MBA Resources
Construction - Raw Materials
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Luks Group Vietnam (Hong Kong)
Based on various researches at Oak Spring University , Luks Group Vietnam is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, geopolitical disruptions, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
increasing commodity prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Luks Group Vietnam
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Luks Group Vietnam can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luks Group Vietnam, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luks Group Vietnam 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 Luks Group Vietnam can be done for the following purposes –
1. Strategic planning of Luks Group Vietnam
2. Improving business portfolio management of Luks Group Vietnam
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Luks Group Vietnam
Strengths of Luks Group Vietnam | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luks Group Vietnam are -
Strong track record of project management in the Construction - Raw Materials industry
– Luks Group Vietnam is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Luks Group Vietnam 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.
Effective Research and Development (R&D)
– Luks Group Vietnam has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Luks Group Vietnam staying ahead in the Construction - Raw Materials industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Luks Group Vietnam
– The covid-19 pandemic has put organizational resilience at the centre of everthing Luks Group Vietnam does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Luks Group Vietnam 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 Construction - Raw Materials industry. The technology infrastructure of Hong Kong 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.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Luks Group Vietnam has clearly differentiated products in the market place. This has enabled Luks Group Vietnam to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Luks Group Vietnam to invest into research and development (R&D) and innovation.
Innovation driven organization
– Luks Group Vietnam is one of the most innovative firm in Construction - Raw Materials sector.
Operational resilience
– The operational resilience strategy of Luks Group Vietnam comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
Low bargaining power of suppliers
– Suppliers of Luks Group Vietnam in the Capital Goods sector have low bargaining power. Luks Group Vietnam has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Luks Group Vietnam to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Luks Group Vietnam has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Luks Group Vietnam to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Luks Group Vietnam in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Luks Group Vietnam has one of the best training and development program in Capital Goods 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.
Weaknesses of Luks Group Vietnam | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Luks Group Vietnam are -
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in Hong Kong, Luks Group Vietnam 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 Construction - Raw Materials industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Luks Group Vietnam is slow explore the new channels of communication. These new channels of communication can help Luks Group Vietnam to provide better information regarding Construction - Raw Materials products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Luks Group Vietnam is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Luks Group Vietnam needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Luks Group Vietnam to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Luks Group Vietnam has high operating costs in the Construction - Raw Materials industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Luks Group Vietnam lucrative customers.
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 Luks Group Vietnam supply chain. Even after few cautionary changes, Luks Group Vietnam is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Luks Group Vietnam vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Luks Group Vietnam, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.
High cash cycle compare to competitors
Luks Group Vietnam has a high cash cycle compare to other players in the Construction - Raw Materials industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Luks Group Vietnam 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.
Skills based hiring in Construction - Raw Materials industry
– The stress on hiring functional specialists at Luks Group Vietnam 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.
Workers concerns about automation
– As automation is fast increasing in the Construction - Raw Materials industry, Luks Group Vietnam 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.
Lack of clear differentiation of Luks Group Vietnam products
– To increase the profitability and margins on the products, Luks Group Vietnam needs to provide more differentiated products than what it is currently offering in the marketplace.
Luks Group Vietnam Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Luks Group Vietnam are -
Manufacturing automation
– Luks Group Vietnam can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Luks Group Vietnam 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 Luks Group Vietnam to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Luks Group Vietnam 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.
Leveraging digital technologies
– Luks Group Vietnam 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.
Using analytics as competitive advantage
– Luks Group Vietnam has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Luks Group Vietnam to build a competitive advantage using analytics. The analytics driven competitive advantage can help Luks Group Vietnam to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Luks Group Vietnam 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.
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 Luks Group Vietnam 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.
Creating value in data economy
– The success of analytics program of Luks Group Vietnam has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Luks Group Vietnam to build a more holistic ecosystem for Luks Group Vietnam products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Luks Group Vietnam is facing challenges because of the dominance of functional experts in the organization. Luks Group Vietnam can utilize new technology in the field of Construction - Raw Materials industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Luks Group Vietnam in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction - Raw Materials industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Luks Group Vietnam can develop new processes and procedures in Construction - Raw Materials 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.
Building a culture of innovation
– managers at Luks Group Vietnam 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 Construction - Raw Materials industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Luks Group Vietnam 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.
Threats Luks Group Vietnam External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Luks Group Vietnam are -
Technology acceleration in Forth Industrial Revolution
– Luks Group Vietnam has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Luks Group Vietnam needs to keep up with the evolution of technology in the Construction - Raw Materials 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.
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 Luks Group Vietnam in the Construction - Raw Materials sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Luks Group Vietnam is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Luks Group Vietnam 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 Construction - Raw Materials 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 Luks Group Vietnam business can come under increasing regulations regarding data privacy, data security, etc.
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. Luks Group Vietnam needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
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. Luks Group Vietnam 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Luks Group Vietnam with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
Environmental challenges
– Luks Group Vietnam 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. Luks Group Vietnam can take advantage of this fund but it will also bring new competitors in the Construction - Raw Materials industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Luks Group Vietnam may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Luks Group Vietnam in Construction - Raw Materials industry. The Construction - Raw Materials 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.
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 Luks Group Vietnam.
Weighted SWOT Analysis of Luks Group Vietnam Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Luks Group Vietnam 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 Luks Group Vietnam 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 Luks Group Vietnam 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 Luks Group Vietnam 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 Luks Group Vietnam needs to make to build a sustainable competitive advantage.