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Korea Electric Power Corporation SWOT Analysis / Matrix
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SWOT analysis is a vital strategic planning tool that can be used by Korea Electric Power Corporation managers to do a situational analysis of the company . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Korea Electric Power Corporation is facing in its current business environment.
The Korea Electric Power Corporation is one of the leading firms in its industry. Korea Electric Power Corporation maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.
The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Korea Electric Power Corporation to develop four types of strategies:
- SO (strengths-opportunities) Strategies
- WO (weaknesses-opportunities) Strategies
- ST (strengths-threats) Strategies
- WT (weaknesses-threats) Strategies
SWOT Matrix Strategies Objective
The central purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Korea Electric Power Corporation strengths, and eradicate its weaknesses.
Step by Step Guide to Korea Electric Power Corporation SWOT Analysis
Strengths of Korea Electric Power Corporation – Internal Strategic Factors
As one of the leading organizations in its industry, Korea Electric Power Corporation has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Korea Electric Power Corporation are –
- Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
- High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
- Highly skilled workforce through successful training and learning programs. Korea Electric Power Corporation is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
- Strong Brand Portfolio – Over the years Korea Electric Power Corporation has invested in building a strong brand portfolio. The SWOT analysis of Korea Electric Power Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
- Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
- Automation of activities brought consistency of quality to Korea Electric Power Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
- Superb Performance in New Markets – Korea Electric Power Corporation has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
- Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
Weakness of Korea Electric Power Corporation – Internal Strategic Factors
Weakness are the areas where Korea Electric Power Corporation can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.
- Investment in Research and Development is below the fastest growing players in the industry. Even though Korea Electric Power Corporation is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
- Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Korea Electric Power Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
- The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Korea Electric Power Corporation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Korea Electric Power Corporation needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
- The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
- Not highly successful at integrating firms with different work culture. As mentioned earlier even though Korea Electric Power Corporation is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
- Limited success outside core business – Even though Korea Electric Power Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Opportunities for Korea Electric Power Corporation – External Strategic Factors
- The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Korea Electric Power Corporation to increase its profitability.
- Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Korea Electric Power Corporation in other product categories.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Korea Electric Power Corporation an opportunity to enter a new emerging market.
- The new technology provides an opportunity to Korea Electric Power Corporation to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
- New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Korea Electric Power Corporation to drive home its advantage in new technology and gain market share in the new product category.
- Government green drive also opens an opportunity for procurement of Korea Electric Power Corporation products by the state as well as federal government contractors.
- Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Korea Electric Power Corporation to capture new customers and increase its market share.
- Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
Threats Korea Electric Power Corporation Facing - External Strategic Factors
- The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
- Imitation of the counterfeit and low quality product is also a threat to Korea Electric Power Corporation’s product especially in the emerging markets and low income markets.
- Liability laws in different countries are different and Korea Electric Power Corporation may be exposed to various liability claims given change in policies in those markets.
- No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
- New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
- Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Korea Electric Power Corporation
- Rising raw material can pose a threat to the Korea Electric Power Corporation profitability.
- Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
Limitations of SWOT Analysis for Korea Electric Power Corporation
Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.
- Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
- SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
- The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Korea Electric Power Corporation
- SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
- SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.
Weighted SWOT Analysis of Korea Electric Power Corporation
In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.
This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Korea Electric Power Corporation managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.
Limitation of Weighted SWOT analysis of Korea Electric Power Corporation
This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.
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SWOT Worksheet & Template
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References / Citations & Bibliography
- M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
- A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
- O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
- L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
- R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)