The wedding sector in Korea has been well explored by the two analysis techniques. In the SWOT analysis, it was evident that the industry has the potential of thriving greatly as has the PEST analysis. Notably, the SWOT majorly comprises of analysis of an organization based on both the external and the internal factors which affect business growth (Kim and Kim, 2013). On the other hand, the PEST analysis mainly incorporates the determination of majorly the external factors that aid the survival of a business (Seoul.usembassy.gov, 2013). Consequently, one could conclude that the SWOT analysis does offer a better of a business organization as compared to the PEST analysis since the SWOT analysis technique can be said to be ‘all rounded’. Nevertheless, a perfect organization analysis technique is obtained when one or more techniques are employed for the same. And therefore, the Korean wedding industry has been well exposed since the two techniques have been explored. It is even clear that using the two techniques yields some similarities in results which is a good way of confirmation of the findings and that makes the hybrid technique even stronger.
Growth of a business is determined by the amount of profits or revenue a business has (Efendic, Andersson and Wennberg, 2013). It is also determined by the amount of physical and human capital that the business invests for its operations. Ghafoor and Iqbal, (2007) specifically considers use of sales and employees as the indicators of a firms growth. In this case they base the considerations on these main advantages:
i. Sales and number of employees are the most widely used indicators of growth by many researchers.
ii. The data and information for these indicators is the most easily acquired for most firms.
iii. Sales, for many firms, are the best indicator of growth and how much that particular firm is adapting in the competitive market.
iv. A combination of both sales and employees as a measure of growth is most reliable since individually, for instance, sales are affected highly by factors such as currency exchange rates or even inflation.
Kastrati (2015) also agrees with the fact that sales and employees are the best indicators of growth of a firm. He suggests that holding all other factors constant, an increase in the number of sales (turnover) for a given firm is a good indicator of the rate of growth of that particular firm. On the other hand, he argues that an increase in the number of people working for a particular firm is a good indicator of the amount of growth for that particular firm. In another research, Rasmussen (2009) applies revenue as the measure of business growth. In this case she considers the advantages considered for sales above as the main advantages of revenue as a measure of growth.
According to Kastrati (2015), the determinant factors of business growth can be summarized as shown in figure 1.
Figure 1: Determinant factors of business growth (Kastrati. 2015, p 11)
The factors will be expounded on in what follows (section 2.4.1 to 2.4.4)
These are all the external factors that affect the business’s initial growth and also on a general basis affect the business performance and its potential for growth (Kusi, Narh Opata and John Narh, 2015). Of importance, these factors greatly influence the growth of SMEs in a positive or negative way (Sulong, Sulaiman and Norhayati, 2015). These factors include:
i. Infrastructure – Infrastructure in this case refers to the road, energy supply and water supply majorly affect the growth of businesses especially SMEs (Kastrati, 2015). Further, infrastructure is greatly influenced by public and governments investments which in turn influence the private output (Paglia and Harjoto, 2014). For instance, poor roads limit the mobility of goods and services from one location to another which mainly hinders the growth of the market for those goods and services. Further, lack of energy and water supply especially in rural areas definitely poses a big threat to the venturing of new businesses. In addition, this reduces the market accessibility by enterprises consequently minimizing the growth for SMEs.
ii. Tax rate – Zhu and Zhang (2016) argue that an increase in the tax-rates in a particular country result in a corresponding decrease in the purchasing power of businesses by reducing the cash at hand for the particular businesses. These high rates further reduce the ability of businesses to investments, and a general decrease in the profits made by a business and consequently causing a retarded growth for the businesses. This majorly affects the SMEs since they have no big financial capabilities (Kastrati, 2015).
iii. Financial constraints – These constraints result from the financial limitations of SMEs due to inability to acquire adequate loans to facilitate growth and or to increase investments which in turn improve growth of the particular firms. In other words, the SMEs have limitations when it comes to the loans they can acquire from lending bodies such as banks. They (SMEs) tend to incur high financial costs than gains from offered bank loans due to the implications of high interests rates by the banks. This on a bigger picture limits the growth potential for that respective SME. In other cases the SMEs experience low profit and revenue gains from their operations due to their limited size of operation. Consequently, the lending bodies such as banks may find it insecure to offer loans to such companies as compared to the way they would feel offering the same loan to bigger firms which gain higher profits from their operations (Kastrati, 2015). In other words, the SMEs experience limitations when it gets obtaining external financial assistance which limits their growth.
iv. Competition – According to Kastrati (2015), a higher competitive environment poses growth constrains for SMEs especially in their early stages of development. Therefore, for enterprises with poor market coverage and financial aid to increase competition are susceptible to slower or no growth in their places of operation.
The factors enlisted below are the main human factors that influence the growth of enterprises including the SMEs. Human factors determine the effectiveness of the workforce in a given enterprise which in turn influences the extent of growth of that particular enterprise. These factors include:
i. Age of the owner – Kastrati (2015) suggests that younger entrepreneurs are less prone to making errors than are older entrepreneurs. That therefore means that younger entrepreneurs can fuel firm growth easily as compared to older entrepreneurs. Further he suggests that younger entrepreneurs are growth motivated since they ‘have their whole lives ahead of them’ that means they have more need to expand their investments as compared to older people. Another study however, shows that younger entrepreneurs have less exposure and experience in the business world and though they have most vigor, growth of their firms is limited. On the other hand, even though older entrepreneurs have more experience, they lack the energy to focus on growth. That leaves the middle-aged entrepreneurs who have considerate amount of experience and energy as the main people who facilitate business growth (Chen, 2014).
ii. Level of education – An owner with bachelor’s degree is more prone to growing his/her firm than one with a lower level of academic achievement. Kastrati (2015) agrees with this in his research since he says that the educational level of an enterprise owner is ‘directly’ related to the growth probability of that enterprise. However a contradicting conclusion was drawn by a research carried out in Romania in which workers and university education was proved to have little or no impact on firm growth whereas high school education was seen ton ha a bigger impact on the growth of a firm (Brown, Earle and Lup, 2005).
iii. Gender of the owner – According to Kastrati (2015), gender is the most important human factor that determines the growth of a business. Notably, the state of whether a business is owned by a male or a female is of paramount importance to the fate of an enterprise. Dijk and Sverrisson (2003) say that mostly in the developing countries, women owners are susceptible to growth hindrances. In this case, gender aspects are greatly influenced by the culture of the country in which the owner is. For instance, women may lack enough capital to start a business and even sustain it as compared to men (Tundui and Tundui, 2012). This is because the men are mostly entitled to inheritances from their forefathers that can act as good sources of finance and assets for a business but women are not (Kastrati, 2015). Additionally, women tend to be more disadvantaged when it comes to operating of businesses due to the different roles they play in the society. Such roles include responsibilities with children and home care, limitations in terms of acquiring education, and a general lack of experience in the business world (Clark Muntean, 2013). Further studies show that women tend to mash up economic with non-economic growth (Cravo, 2010) which becomes a major problem in the operation of a business (Jasper, 2005). It is important to note that; this factor (gender) has minimum impact in the recent world of civilization and is only effective in the developing countries specifically the countries that are still submerged in the roots of their cultures.