Case Study Description of Funai Consulting Co. Ltd. (A)
In the summer of 1997, a consultant at Japan's Funai Consulting Co. Ltd., must decide how to respond to a client's proposal to offer "open pricing" (based on willingness to pay) to customers unable to pay the standard price for the client's product. The client, Akita Komachi Farmer's Association, markets rice and rice products to consumers and is facing increasing international competition with the opening of Japan's rice market. The case presents Funai Consulting's unusual business philosophy, which was developed by its founder and 1997 Chairman Yukio Funai. Mixing "new science" with both Japanese and Western concepts, Funai's approach is based on the goal of mutual prosperity rather than dominance in competition. Teaching purpose: To develop decision-making skills; and to develop understanding of a management and business philosophy rooted in Japanese culture.
Swot Analysis of "Funai Consulting Co. Ltd. (A)" written by Lynn Sharp Paine, Tomoya Nakamura includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Funai Rice facing as an external strategic factors. Some of the topics covered in Funai Consulting Co. Ltd. (A) case study are - Strategic Management Strategies, Ethics, Managing people, Pricing, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Funai Consulting Co. Ltd. (A) casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, there is backlash against globalization, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of Funai Consulting Co. Ltd. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Funai Consulting Co. Ltd. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Funai Rice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Funai Rice operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Funai Consulting Co. Ltd. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Funai Consulting Co. Ltd. (A) case study
2. Improving business portfolio management of Funai Rice
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Funai Rice
Strengths Funai Consulting Co. Ltd. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Funai Rice in Funai Consulting Co. Ltd. (A) Harvard Business Review case study are -
Successful track record of launching new products
– Funai Rice has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Funai Rice has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Funai Rice in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Funai Rice has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Funai Rice has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Funai Consulting Co. Ltd. (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Funai Rice has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Funai Consulting Co. Ltd. (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Funai Rice is present in almost all the verticals within the industry. This has provided firm in Funai Consulting Co. Ltd. (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Funai Rice is one of the most innovative firm in sector. Manager in Funai Consulting Co. Ltd. (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Funai Rice is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Funai Rice is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Funai Consulting Co. Ltd. (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Funai Rice
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Funai Rice does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Funai Rice is one of the leading recruiters in the industry. Managers in the Funai Consulting Co. Ltd. (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Funai Rice is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Funai Rice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Funai Rice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Funai Consulting Co. Ltd. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Funai Consulting Co. Ltd. (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Funai Rice is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Funai Consulting Co. Ltd. (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Funai Consulting Co. Ltd. (A), it seems that the employees of Funai Rice don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Funai Rice needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Funai Consulting Co. Ltd. (A) HBR case study mentions - Funai Rice takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynn Sharp Paine, Tomoya Nakamura suggests that, Funai Rice is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Funai Consulting Co. Ltd. (A), is just above the industry average. Funai Rice needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Funai Consulting Co. Ltd. (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Funai Consulting Co. Ltd. (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Funai Consulting Co. Ltd. (A) can leverage the sales team experience to cultivate customer relationships as Funai Rice is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Funai Rice, firm in the HBR case study Funai Consulting Co. Ltd. (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Funai Consulting Co. Ltd. (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Funai Rice 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Funai Rice supply chain. Even after few cautionary changes mentioned in the HBR case study - Funai Consulting Co. Ltd. (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Funai Rice vulnerable to further global disruptions in South East Asia.
Opportunities Funai Consulting Co. Ltd. (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Funai Consulting Co. Ltd. (A) are -
Leveraging digital technologies
– Funai Rice can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Funai Rice can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Funai Rice can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Funai Rice has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Funai Consulting Co. Ltd. (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Funai Rice to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Funai Rice has opened avenues for new revenue streams for the organization in the industry. This can help Funai Rice to build a more holistic ecosystem as suggested in the Funai Consulting Co. Ltd. (A) case study. Funai Rice can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Funai Rice can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Funai Consulting Co. Ltd. (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Funai Rice can use these opportunities to build new business models that can help the communities that Funai Rice operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Funai Rice can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Funai Rice can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Funai Rice can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Funai Rice can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Funai Rice can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Funai Rice to increase its market reach. Funai Rice will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Funai Rice has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Funai Consulting Co. Ltd. (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Funai Consulting Co. Ltd. (A) are -
Stagnating economy with rate increase
– Funai Rice can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Funai Rice will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Funai Rice business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Funai Rice has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Funai Rice needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Funai Rice in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Funai Consulting Co. Ltd. (A), Funai Rice may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Regulatory challenges
– Funai Rice needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Funai Rice can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Funai Rice needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Funai Rice with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Funai Rice needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Funai Rice can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Funai Consulting Co. Ltd. (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Funai Consulting Co. Ltd. (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Funai Consulting Co. Ltd. (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Funai Consulting Co. Ltd. (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Funai Consulting Co. Ltd. (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Funai Rice needs to make to build a sustainable competitive advantage.
