Swot Analysis of "Knowledge Creation at Eisai Co., Ltd." written by Hirotaka Takeuchi, Ikujiro Nonaka, Mayuka Yamazaki includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eisai Knowledge facing as an external strategic factors. Some of the topics covered in Knowledge Creation at Eisai Co., Ltd. case study are - Strategic Management Strategies, Knowledge management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Knowledge Creation at Eisai Co., Ltd. casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing transportation and logistics costs, there is backlash against globalization, technology disruption,
wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Knowledge Creation at Eisai Co., Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Knowledge Creation at Eisai Co., Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eisai Knowledge, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eisai Knowledge 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 Knowledge Creation at Eisai Co., Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Knowledge Creation at Eisai Co., Ltd. case study
2. Improving business portfolio management of Eisai Knowledge
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eisai Knowledge
Strengths Knowledge Creation at Eisai Co., Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eisai Knowledge in Knowledge Creation at Eisai Co., Ltd. Harvard Business Review case study are -
Organizational Resilience of Eisai Knowledge
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eisai Knowledge does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Eisai Knowledge is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eisai Knowledge in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Eisai Knowledge 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 switching costs
– The high switching costs that Eisai Knowledge 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.
Effective Research and Development (R&D)
– Eisai Knowledge 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 Knowledge Creation at Eisai Co., Ltd. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Eisai Knowledge has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eisai Knowledge 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.
Cross disciplinary teams
– Horizontal connected teams at the Eisai Knowledge are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Eisai Knowledge has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eisai Knowledge to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Eisai Knowledge 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 Eisai Knowledge is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Knowledge Creation at Eisai Co., Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Eisai Knowledge is one of the leading recruiters in the industry. Managers in the Knowledge Creation at Eisai Co., Ltd. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Eisai Knowledge in the sector have low bargaining power. Knowledge Creation at Eisai Co., Ltd. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eisai Knowledge to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Eisai Knowledge is one of the most innovative firm in sector. Manager in Knowledge Creation at Eisai Co., Ltd. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Knowledge Creation at Eisai Co., Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Knowledge Creation at Eisai Co., Ltd. are -
Skills based hiring
– The stress on hiring functional specialists at Eisai Knowledge has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Knowledge Creation at Eisai Co., Ltd. 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 Eisai Knowledge has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Eisai Knowledge 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.
Capital Spending Reduction
– Even during the low interest decade, Eisai Knowledge 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 operating costs
– Compare to the competitors, firm in the HBR case study Knowledge Creation at Eisai Co., Ltd. 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 Eisai Knowledge 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Eisai Knowledge has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Eisai Knowledge even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Eisai Knowledge is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Eisai Knowledge needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eisai Knowledge to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Knowledge Creation at Eisai Co., Ltd. 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 Knowledge Creation at Eisai Co., Ltd. can leverage the sales team experience to cultivate customer relationships as Eisai Knowledge is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eisai Knowledge is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Knowledge Creation at Eisai Co., Ltd. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Eisai Knowledge 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.
High cash cycle compare to competitors
Eisai Knowledge 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.
Opportunities Knowledge Creation at Eisai Co., Ltd. | 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 Knowledge Creation at Eisai Co., Ltd. are -
Using analytics as competitive advantage
– Eisai Knowledge 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 Knowledge Creation at Eisai Co., Ltd. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eisai Knowledge to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Eisai Knowledge 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 Strategy & Execution segment.
Manufacturing automation
– Eisai Knowledge can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Loyalty marketing
– Eisai Knowledge 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eisai Knowledge can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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. Eisai Knowledge can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eisai Knowledge 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, Knowledge Creation at Eisai Co., Ltd., 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, Eisai Knowledge can use these opportunities to build new business models that can help the communities that Eisai Knowledge operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Eisai Knowledge can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Eisai Knowledge 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. Eisai Knowledge 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Eisai Knowledge can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Eisai Knowledge has opened avenues for new revenue streams for the organization in the industry. This can help Eisai Knowledge to build a more holistic ecosystem as suggested in the Knowledge Creation at Eisai Co., Ltd. case study. Eisai Knowledge can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eisai Knowledge is facing challenges because of the dominance of functional experts in the organization. Knowledge Creation at Eisai Co., Ltd. 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.
Threats Knowledge Creation at Eisai Co., Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Knowledge Creation at Eisai Co., Ltd. are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eisai Knowledge in the Strategy & Execution industry. The Strategy & Execution 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 Knowledge Creation at Eisai Co., Ltd., Eisai Knowledge may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Eisai Knowledge
– 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 Eisai Knowledge.
Technology acceleration in Forth Industrial Revolution
– Eisai Knowledge has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Eisai Knowledge needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Eisai Knowledge business can come under increasing regulations regarding data privacy, data security, etc.
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. Eisai Knowledge 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eisai Knowledge can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Knowledge Creation at Eisai Co., Ltd. .
Environmental challenges
– Eisai Knowledge 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. Eisai Knowledge can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Eisai Knowledge 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eisai Knowledge can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Eisai Knowledge 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.
High dependence on third party suppliers
– Eisai Knowledge high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Knowledge Creation at Eisai Co., Ltd. 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 Knowledge Creation at Eisai Co., Ltd. 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 Knowledge Creation at Eisai Co., Ltd. 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 Knowledge Creation at Eisai Co., Ltd. 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 Knowledge Creation at Eisai Co., Ltd. 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 Eisai Knowledge needs to make to build a sustainable competitive advantage.
