Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products
Explores Olympus Optical's strategic response to major losses in its camera business. Key to Olympus's recovery were its extensive product planning process, a quality improvement program, and an aggressive cost-reduction program. In particular, the case details Olympus's target costing system, which enabled the firm to design high-quality products at low cost.
Swot Analysis of "Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products" written by Robin Cooper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Olympus's Olympus facing as an external strategic factors. Some of the topics covered in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products case study are - Strategic Management Strategies, Product development and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products casestudy better are - – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Olympus's Olympus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products can be done for the following purposes –
1. Strategic planning using facts provided in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products case study
2. Improving business portfolio management of Olympus's Olympus
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Olympus's Olympus
Strengths Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Olympus's Olympus in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Olympus's Olympus 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 Olympus's Olympus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Olympus's Olympus is one of the most innovative firm in sector. Manager in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Olympus's Olympus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Olympus's Olympus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Olympus's Olympus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Olympus's Olympus 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.
Operational resilience
– The operational resilience strategy in the Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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.
Analytics focus
– Olympus's Olympus is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robin Cooper can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Olympus's Olympus in the sector have low bargaining power. Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Olympus's Olympus to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Olympus's Olympus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Olympus's Olympus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Olympus's Olympus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Olympus's Olympus 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 Olympus's Olympus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products are -
Interest costs
– Compare to the competition, Olympus's Olympus 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 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 Olympus's Olympus supply chain. Even after few cautionary changes mentioned in the HBR case study - Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Olympus's Olympus vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Robin Cooper suggests that, Olympus's Olympus 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.
Aligning sales with marketing
– It come across in the case study Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products can leverage the sales team experience to cultivate customer relationships as Olympus's Olympus is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products, is just above the industry average. Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Skills based hiring
– The stress on hiring functional specialists at Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus's Olympus has relatively successful track record of launching new products.
Need for greater diversity
– Olympus's Olympus 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.
Increasing silos among functional specialists
– The organizational structure of Olympus's Olympus is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Olympus's Olympus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Olympus's Olympus to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Olympus's Olympus 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.
Opportunities Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products | 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products are -
Building a culture of innovation
– managers at Olympus's Olympus 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 Finance & Accounting segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Olympus's Olympus is facing challenges because of the dominance of functional experts in the organization. Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Olympus's Olympus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Olympus's Olympus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Olympus's Olympus to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Olympus's Olympus can develop new processes and procedures in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Olympus's Olympus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Olympus's Olympus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Olympus's Olympus 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.
Manufacturing automation
– Olympus's Olympus can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Creating value in data economy
– The success of analytics program of Olympus's Olympus has opened avenues for new revenue streams for the organization in the industry. This can help Olympus's Olympus to build a more holistic ecosystem as suggested in the Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products case study. Olympus's Olympus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Olympus's Olympus 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 Olympus's Olympus to hire the very best people irrespective of their geographical location.
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 Olympus's Olympus in the consumer business. Now Olympus's Olympus can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products, Olympus's Olympus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Olympus's Olympus 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 Olympus's Olympus 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.
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.
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 Olympus's Olympus in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Olympus's Olympus with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Olympus's Olympus 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.
Technology acceleration in Forth Industrial Revolution
– Olympus's Olympus has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Olympus's Olympus needs to keep up with the evolution of technology in the Finance & Accounting 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 Olympus's Olympus.
Environmental challenges
– Olympus's Olympus 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. Olympus's Olympus can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
High dependence on third party suppliers
– Olympus's Olympus 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus Optical Co. Ltd. (A): Cost Management for Short Life Cycle Products 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 Olympus's Olympus needs to make to build a sustainable competitive advantage.
