Daewoo Engineering and Construction Company

Strength

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Weakness

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Opportunity

1. Opening global opportunities through integrating planning, finance, and technology: Urban projects have been used by Daewoo E&C as a doorway into the global market. Vietnam’s Star Lake City, being built by Daewoo is Korea’s first private-led overseas urban development project. This project is being developed over an area of 186 ha and is the first such urban development project that is being handled solely by the company right from planning and financing to construction and sales. The project site is expected to have vast importance once completed with all the major political, industrial, diplomatic activities within the region being held here. It will also be the region’s largest residential center. Once this project is completed, Daewoo E&C aims at expanding further by starting urban development projects in emerging countries with high growth potential.

2. Urbanization - A major driver of infrastructure spending: The World Bank uses infrastructure as a marker for declaring an erstwhile low- and middle-income country as an emerging or developing nation. The World Bank set aside $26 billion for infrastructure financing in 2011, making it 43% of its total commitments. While 3.5 billion people, constituting 50% of the world’s population currently live in cities, it is expected that by 2030, this figure will have risen to 5 billion, around 60% of the total population. This increased population will place in a demand for infrastructure investments like railroads, highways, bridges, ports, airports, water, power, energy and telecommunications. This will be a great opportunity for companies in the contractor and supplier business. This is especially so as experts have forecast that the industry is likely to see more than $40 trillion dollars being invested for the development of urban infrastructure in the next 20 years. Daewoo E&C too can use this chance for growth as it is well placed to make use of this opportunity with its past experience in infrastructure segments.

Threat

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Political

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Economic

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Social

1. Decline in population of Japan translates to lower revenue in Japan: Panasonic and other homegrown Japanese companies such as Sony, Sharp, Toshiba and other have seen a decline in their business on their own home turf, a reason that contributes to this decline in business is that Japan is suffering a cultural malaise where in the major population of Japan has aversion to human contact in a society dominated by technology, this leads to an extremely low birth rates in Japan because of which Japan is experiencing an irreversible decline in its population, Japan’s population peaked in 2010 at 128 million and since then it has been on a steady decline, Japan is also one of the very few countries to have a negative population growth (-0.1%). Because of this declining population the growth of Panasonic has stagnated severely in their own home country which contributes a significant portion of their international revenues.

2. High average age of Japanese population and high labor cost: Besides the issue of declining population, the average age of Japanese citizen is around 48 years one of the highest in the world whereas average age of India’s population is expected to reach around 29 years by the year 2020. Because of such high average age of population, Japan is seeing a decline in overall expenditure, Last year Japan’s GDP growth rate was around 1% and to make matters worse the labor costs in the country are extremely high which makes it worrisome for companies like Panasonic to increase their revenues within the country and also the high operational cost that the company has to bear due to high labor cost to operate in Japan. Over the years Panasonic has seen decrease in the percentage of the revenues that their Japan’s operations contribute compared to their global revenues.

Technological

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Legal

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Environmental

1. Innovative construction for sustainable environmental development: In order to facilitate the sustainable development of global human society, it is necessary to make investments that will initiate active steps within the environmental industry. It has made significant investments for innovation in technology that will provide for future energy generation and supply. In South Korea, the company has emerged as a leader in the construction of innovative water treatment facilities, like sewage treatment, water purification plants and sewage pipeline. The Daewoo Nutrient Removal (DNR) sewage treatment system is an example of the ecofriendly designs developed by the company. Using this technology, Daewoo has started work on shifting all treatment facilities underground and building parks in its place, thus helping improve public amenities. Significant inroads have also been made in the green energy business through the innovation of New Excellent Technologies and patents which is enabling it to complete biogas power generation projects. The Jeju solar power generation project is another notable project completed by the company. Investments in solar power, wind power and other forward-looking businesses have also been made.

2. Carbon Capture and Utilization - Transforming global warming emissions into resources: The DECO2 (Daewoo Elimination of CO2) technology is a fantastic Carbon Capture, Utilization, and Storage (CCUS) system that uses several methods to remove CO2 from flues as well as the atmosphere and then even recycle that CO2 or store in a safe and permanent manner. The DECO2, first used in South Koreas was able to successfully remove CO2 from industrial chimneys and then reutilize it as a construction material. This process helps to reduce greenhouse gas emissions from 15% to 1% through an alkali admixture microbubble reactor which does not allow CO2 to escape from the exhaust. The resultant CaCO₃ is then mixed with cement and used in consruction. Daewoo has one 40-ton CO2 capture pilot plant at Incheon Youngheung Power Plants in operation currently and has plans to develop more technology which can prevent climate change by linking GHG reduction and recycling with construction materials.

3. Focus on renewable energy business: It is expected that investments in the renewable energy sector will cross USD 350 billion by 2020 as demand for non-renewable sources of energy, such as petroleum, coal is slowly falling and increasing the need for renewable energy to feed the ever growing demands for energy. Daewoo is currently setting up its strategies keeping the “Renewable Energy 2030” plan set out at the Paris Climate Agreement by the Ministry of Trade, Industry and Energy in mind. It is looking towards including solar, wind, and biogas projects in its pipeline. The “Jeju Solar Photovoltaic Energy Project,” being overseen by the company, is a major undertaking within the solar photovoltaic sector and is supported by the Jeju Special Self-Governing Province. The contract for the project was signed in September 2017 and construction began in April 2018. The goal is to transition to renewable energy sources using the spaces of former tangerine gardens and jointly owned village land, leading to overall local community profits. Renewable energy projects and facility renovating projects through eco-friendly technologies are being seen by the company as a good way of improving its mid and long-term business growth.