Swot Analysis of Yg Entertainment

SWOT Analysis of YG

Strength

Unique brand image, leading the creation of new trends

The company’s potential for growth is huge in light of its superior creativity. For example, the company boasts the largest share of the domestic digital music market due to its creative music development.

YG Entertainment sticks to the HIP-HOP style and leads the hip-hop fashion in this industry. YG catches the HIP-HOP heat point and distinct itself from the other regular K-pop entertainment company with digital dancing music, which is the mainstream in Korean music market. YG is known for performing unique Korean Pop/Hip Hop music, mixing the genres. Given YG’s unique music style and fashion taste, it has accumulated a group of loyal fans.

Resourceful talents, YG spirit and YG family.

The quality and size of artist lineups are key growth determinants for an entertainment company. A larger lineup improves a company’s brand awareness and makes it easier to market new artists.

YG has been promoting itself as a company that encourage creativity of its own artists within a family-like environment without interfering with the creating process of its artists. YG spirit consists of creative thinking, excellence, unique identity and family-oriented mind set.

Strong relationship with SBS.

Over the years, SBS and YG Entertainment have been known to share a good relationship. Indeed, YG entertainment has a particularly strong relationship with SBS compared to its relationships with KBS and MBC. Debut stages and appearances on SBS’s ‘lnkigayo’ is always a priority for groups such as Big Bang and 2NE1.

Relatively healthy internal communication system.

Comparing to the extremely rigid system in SM entertainment and the different scandal concerning the exploitation of its artists, YG seems to have a more healthy internal communication system compared to the two other big Korean entertainment companies (YG, SM and JYP entertainment).

High financial develop potential.

Another strong point for YG is its strong cost control. For instance, in 2011, YG reported revenues of W78.1bn and an operating profit of W17.8bn on an OP margin of 23.1%. The company’s high OP margin, despite relatively small revenues, suggests effective cost control under conservative management.

According to the official data, for the first half of 2013, YG posted revenue of 60,394,746,793KRW (approximately $54,036,032.31 USD). Comparing this to the first half of 2012, when YG accumulated approximately 40.6 billion KRW (approximately $36,325,392.99 USD), YG showed a gain of 20 billion KRW (approximately $17,894,282.26 USD), breaking a record-high in its revenue.

Weakness