Case Study Description of ASICS: Chasing a 2020 Vision
In early 2016, Motoi Oyama, president and CEO of ASICS, a major sports apparel and footwear manufacturer based in Japan, lays out his company's growth plan for the upcoming 5 years. The new plan set ambitious goals in terms of revenue and profit increases. At the heart of the strategy to achieve these goals are a desire to embrace a more direct to consumer mindset, expand into new customer segments, and communicate a more consistent and emotional brand worldwide. With its primary core customer currently the "serious" runner and its innovation strategy geared towards high-end performance, pursuing these objectives in light of the fierce competitive landscape posed a multitude of challenges. Moreover, the company had recently launched several lifestyle brands (using brand names it had revived), which posed brand architecture issues. Lastly, the company had just acquired a digital fitness app, RunKeeper, and was wondering how best to leverage this asset and how it fit with the main pillars of the growth plan strategy. The Tokyo 2020 Olympic Games would coincide with the conclusion of the 5 year plan, and ASICS had paid over $100 million to be a Gold Sponsor of the games- Oyama wondered whether his company was on the right track to achieving the goals he intimated to shareholders.
Swot Analysis of "ASICS: Chasing a 2020 Vision" written by Elie Ofek, Nobuo Sato, Akiko Kanno includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Asics Oyama facing as an external strategic factors. Some of the topics covered in ASICS: Chasing a 2020 Vision case study are - Strategic Management Strategies, Change management, Competition, IT and Sales & Marketing.
Some of the macro environment factors that can be used to understand the ASICS: Chasing a 2020 Vision casestudy better are - – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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, etc
Introduction to SWOT Analysis of ASICS: Chasing a 2020 Vision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ASICS: Chasing a 2020 Vision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asics Oyama, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asics Oyama 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 ASICS: Chasing a 2020 Vision can be done for the following purposes –
1. Strategic planning using facts provided in ASICS: Chasing a 2020 Vision case study
2. Improving business portfolio management of Asics Oyama
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Asics Oyama
Strengths ASICS: Chasing a 2020 Vision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asics Oyama in ASICS: Chasing a 2020 Vision Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– ASICS: Chasing a 2020 Vision firm has clearly differentiated products in the market place. This has enabled Asics Oyama to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Asics Oyama to invest into research and development (R&D) and innovation.
Strong track record of project management
– Asics Oyama is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Asics Oyama 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 ASICS: Chasing a 2020 Vision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Asics Oyama
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Asics Oyama does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Asics Oyama has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asics Oyama 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.
Ability to recruit top talent
– Asics Oyama is one of the leading recruiters in the industry. Managers in the ASICS: Chasing a 2020 Vision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Asics Oyama digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Asics Oyama has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Asics Oyama in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Asics Oyama 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 ASICS: Chasing a 2020 Vision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the ASICS: Chasing a 2020 Vision Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Asics Oyama 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 Asics Oyama is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ASICS: Chasing a 2020 Vision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Asics Oyama in the sector have low bargaining power. ASICS: Chasing a 2020 Vision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Asics Oyama to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses ASICS: Chasing a 2020 Vision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ASICS: Chasing a 2020 Vision are -
Aligning sales with marketing
– It come across in the case study ASICS: Chasing a 2020 Vision 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 ASICS: Chasing a 2020 Vision can leverage the sales team experience to cultivate customer relationships as Asics Oyama is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Asics Oyama is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Asics Oyama needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Asics Oyama to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Asics Oyama, firm in the HBR case study ASICS: Chasing a 2020 Vision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Asics Oyama is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ASICS: Chasing a 2020 Vision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Asics Oyama has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Asics Oyama has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ASICS: Chasing a 2020 Vision HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Asics Oyama has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As ASICS: Chasing a 2020 Vision HBR case study mentions - Asics Oyama 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.
Need for greater diversity
– Asics Oyama has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Asics Oyama has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Asics Oyama supply chain. Even after few cautionary changes mentioned in the HBR case study - ASICS: Chasing a 2020 Vision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Asics Oyama vulnerable to further global disruptions in South East Asia.
Opportunities ASICS: Chasing a 2020 Vision | 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 ASICS: Chasing a 2020 Vision are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Asics Oyama to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Asics Oyama to hire the very best people irrespective of their geographical location.
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. Asics Oyama can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Asics Oyama in the consumer business. Now Asics Oyama can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Asics Oyama has opened avenues for new revenue streams for the organization in the industry. This can help Asics Oyama to build a more holistic ecosystem as suggested in the ASICS: Chasing a 2020 Vision case study. Asics Oyama can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Asics Oyama 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 ASICS: Chasing a 2020 Vision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Asics Oyama to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Asics Oyama 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Asics Oyama 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, ASICS: Chasing a 2020 Vision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Asics Oyama can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ASICS: Chasing a 2020 Vision suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Asics Oyama to increase its market reach. Asics Oyama 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.
Manufacturing automation
– Asics Oyama can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asics Oyama is facing challenges because of the dominance of functional experts in the organization. ASICS: Chasing a 2020 Vision case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Asics Oyama 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.
Building a culture of innovation
– managers at Asics Oyama 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 Sales & Marketing segment.
Threats ASICS: Chasing a 2020 Vision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ASICS: Chasing a 2020 Vision are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Asics Oyama in the Sales & Marketing industry. The Sales & Marketing 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.
Shortening product life cycle
– it is one of the major threat that Asics Oyama is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Asics Oyama 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. Asics Oyama can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Consumer confidence and its impact on Asics Oyama demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ASICS: Chasing a 2020 Vision, Asics Oyama may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Asics Oyama with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Asics Oyama business can come under increasing regulations regarding data privacy, data security, etc.
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. Asics Oyama 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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Asics Oyama in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Asics Oyama has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Asics Oyama needs to keep up with the evolution of technology in the Sales & Marketing 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Asics Oyama.
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. Asics Oyama needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Asics Oyama
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Asics Oyama.
Weighted SWOT Analysis of ASICS: Chasing a 2020 Vision 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 ASICS: Chasing a 2020 Vision 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 ASICS: Chasing a 2020 Vision 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 ASICS: Chasing a 2020 Vision 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 ASICS: Chasing a 2020 Vision 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 Asics Oyama needs to make to build a sustainable competitive advantage.