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Detailed SWOT Analysis of SK Telecom – A South Korean Wireless Telecommunications Operator

Updated on: Feb 25, 2022
SWOT Analysis of SK Telecom - Featured Image

In our previous blog, we did a comprehensive study on the SWOT Analysis of the largest broadband communication company in the United States, Spectrum. Here we will understand the SWOT Analysis of SK Telecom.

SK Telecom is South Korea’s leading telecommunications provider. They have been operating since 1984. Spending 37 years in the telecommunications industry, they have gained a satisfactory amount of goodwill and gained a handsome amount of net worth.

Looking into the brand’s giant reach to the people is because of the marketing strategy and SK Telecom’s keen interest in launching digital marketing portals. As the world today stands on the verge of being digitized you should get ready to delve into the new marketing strategies to get your potential customers. if you want to learn more about digital marketing and its different attributes do check out Free Digital Marketing Masterclass by Karan Shah the founder and CEO of IIDE.

With the motto to connect as much as people across the globe SK Telecom is always striving hard to be the best. In this blog, we will have an elaborate SWOT Analysis of SK Telecom. Before we delve, let us discover more about SK Telecom Group, its founding, products, financial status, and competitors.

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About SK Telecom

SWOT Analysis of SK Telecom - SK Telecom

The world’s 1536th most valuable company – SK Telecom, previously Korean mobile telecommunications is a part of SK Group which is South Korea’s largest chaebols leading 50% of the local market share. SK Telecom is the largest telecom company in South Korea holding a subscriber base of more than 27 million according to 2017 Q4 analysis.

Evolving from a first-generation analogue system to the third generation IMT-2000 cellular system, SK Telecom achieved growth rapidly. The company provides the largest cable and internet, wireless telecommunications, cellular internet and many things related to the internet. 

Starting from simple telephonic services to reaching smartphone services and launching digital portals SK Telecom has always been on its toes to grab maximum customers. SK Telecom manages several large subsidiaries worldwide and in international markets including the United States, China, Vietnam and the Philippines.

SK Telecom supplies telecommunication services to corporate and government customers across the globe and it also supplies telephone, broadband, and subscription television services in South Korea to almost a million customers every day.

Quick Stats on SK Telecom
Founder SK Group
Year Founded 1984
Origin South Korea
No. of Employees 40,000+
Company Type Public
Market Cap $9.90 Billion (2022)
Annual Revenue KRW 1.339 Trillion (2021)
Net Income/ Profit KRW 736.5 Billion (2021)

 

SWOT Analysis of SK Telecom - SK Telecom 5G in Korea


Products Of SK Telecom

  • Wireless telecom
  • Cellular internet
  • Internet
  • Mobile platform
  • Internet of Things


Competitors of SK Telecom

  • GMO Internet
  • Comba Telecom
  • KT 
  • LG Uplus


Now that we have taken a glance at what SK Telecom is, let’s take a look at the SWOT Analysis of SK Telecom.


SWOT Analysis of SK Telecom 

SWOT Analysis is a useful technique for developing business strategies for both new and current businesses. This simplified methodology is used to assess a company’s competitive standing. SWOT analysis of SK Telecom can help the organization develop effective and efficient business strategies.

To better understand the SWOT analysis of SK Telecom, refer to the infographics below:

SWOT Analysis of SK Telecom - SWOT Infographics of SK Telecom

Below is an explicit guide to the SWOT analysis of SK Telecom.

Strengths of SK Telecom

The brand’s competence gives an edge over capturing the maximum market in the industry and earning more profits. Hence here we go with the strengths as follows:

  • Wide Spread Distribution Network: SK Telecom has created a reliable distribution network over its 37 years of journey that allows it to reach the majority of its potential market through innovation.
  • Leading Market Position: SK Telecom holds a leading market position because of its inception as the sole provider of telephone service in South Korea. Since its inception the growth enabled the company to create a new revenue stream and diversify the economic cycle risk in the markets it serves, propelling SK Telecom to the top of the South Korean market.
  • Highly Qualified Workforce: Through training and learning initiatives, SK Telecom has been able to develop a highly qualified staff. SK Telecom devotes significant resources to employee training and development, resulting in a team that is not just highly competent but also driven to attain greater success.
  • Good Capital Expenditure Returns: SK Telecom has a solid track record of completing new projects and generating good returns on capital expenditure by establishing new revenue sources.
  • Customer Satisfaction is Just High: SK Telecom has been able to achieve high customer satisfaction among current customers and strong brand equity among potential customers due to its dedicated customer relationship management department.


Weaknesses of SK Telecom

SK Telecom’s weakness is an area where he can improve. Strategy is about making important decisions, and weaknesses are areas where a company could improve with the help of a SWOT analysis.

  • Moderate Success Beyond its Core Business: Even though SK Telecom is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • High Prices for Small Plans: SK Telecom struggles when it comes to the pricing of its budgeted devices. Its pricing seems to fall slightly on a higher side in small data plans ranging between 1 – 5 GB.  SK Telecom’s competitors seemed to have an upper hand when it comes to small budgeted plans.
  • Competition with Brands Affecting the Market: Although SK Telecom has a unique marketing strategy the new brands and other existing brands are also coming up with new strategies. But to maintain the position of best telecom services they need constant advertising, improvement in their products and this causes the majority of the expenses of the brand.
  • Reliance on South Korea Market for Major Revenue: As SK Telecom has its main headquarters in South Korea and it is providing the services more efficiently and gets major revenue from South Korea. It is mostly dependent on the South Korean market and hence lacks revenue from worldwide.
  • Limited International Presence: SK Telecom currently operates in only eight markets around the world. It should consider operating in other countries, to expand its business and create strong brand recognition and awareness in the market.
  •  


Opportunities for SK Telecom

Opportunities are possible areas for a company to consider to improve results, sales, and, ultimately, profit. SK Telecom includes the following opportunities:

  • Internet Users: According to Statista.com, there are over 4.66 billion active internet users in the world. SK Telecom has a huge opportunity to increase its customer base by providing affordable data plans. 
  • New Environmental Policies: The new opportunities will open doors to a level playing field for all the players in the industry. It provides a good opportunity for SK Telecom to drive the advantage home buying new technology and gain market share for new product categories. Also to sustain the potential customers as well as loyal ones.
  • Stable Free Cash Flow: The stable cash flow provides opportunities to invest in adjacent products. Hence when more cash is with the company can think of some new technologies and product segments to increase the market share. 
  • Technological Advancements: The new technology provides an opportunity for SK Telecom to practice a differentiated pricing strategy in the new market. It enables the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • Improvement in the Customers: These days we see a very dynamic lifestyle of the people and hence lifestyle and standards mean more consumption of the products and services, and in turn more opportunities to encourage the purchase. This will eventually increase the market share of SK Telecom.


Threats to SK Telecom

External environmental factors that can harm SK Telecom’s growth are known as threats. SK Telecom’s threats include the following:

  • Strong Rivalry from other Communication Providers: There is a lot of competition in the industry these days. This affects prices, resulting in a drop in revenue or income for SK Telecom.
  • Threat from Local Distributors: Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Labour Dispute: SK Telecom has been caught in disputes with its labour and the union also went on strike against the company in the year 2005. The company should look after its employees, if not then it can affect the operations of the company.


This ends our detailed SWOT analysis of SK Telecom. Let us conclude our learning below.

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To Conclude

SK Telecom is a well-established telecommunications company with a good number of subsidiaries. In the SWOT analysis of SK Telecom, we came to know about their strengths as well as their weak points. The company has a good brand profile as well as manages its consumer base quite effectively. But, suffers from some finance management issues that need to be addressed soon.

One of their greatest opportunities is that they are moving more and more towards the online mode. Which is a necessity in today’s scenario. To stand in the market and to expand globally one needs to focus more on the online part.

Hence, improving marketing skills is very paramount for digital marketing enthusiasts. If you are intrigued with the above piece of information in learning more and upskilling, check out the 3 Months Advanced Digital Marketing Course by IIDE to know more.

We hope this blog on the SWOT Analysis of SK Telecom has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of SK Telecom, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of SK Telecom in the comments section below.

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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