The Great East Japan Earthquake B: Fast Retailing Group's Response SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Great East Japan Earthquake B: Fast Retailing Group's Response
Few hours after the earthquake hit on March 11, 2011, CEO Tadashi Yanai of Fast Retailing was eating sushi at a restaurant near his office. He was confident that his store managers would be able to decide for themselves the best action to take in midst of this crisis. Some of the pending decisions were whether or not to reopen the UNIQLO stores that were wiped out by the tsunami, to follow government orders to turn off the store lights, and to distribute warm clothing in the devastated areas.
Authors :: Hirotaka Takeuchi, Kenichi Nonomura, Dena Neuenschwander, Meghan Ricci
Swot Analysis of "The Great East Japan Earthquake B: Fast Retailing Group's Response" written by Hirotaka Takeuchi, Kenichi Nonomura, Dena Neuenschwander, Meghan Ricci includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Earthquake Retailing facing as an external strategic factors. Some of the topics covered in The Great East Japan Earthquake B: Fast Retailing Group's Response case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Great East Japan Earthquake B: Fast Retailing Group's Response casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, technology disruption, increasing energy prices, there is backlash against globalization, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of The Great East Japan Earthquake B: Fast Retailing Group's Response
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Great East Japan Earthquake B: Fast Retailing Group's Response case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Earthquake Retailing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Earthquake Retailing 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 The Great East Japan Earthquake B: Fast Retailing Group's Response can be done for the following purposes –
1. Strategic planning using facts provided in The Great East Japan Earthquake B: Fast Retailing Group's Response case study
2. Improving business portfolio management of Earthquake Retailing
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 Earthquake Retailing
Strengths The Great East Japan Earthquake B: Fast Retailing Group's Response | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Earthquake Retailing in The Great East Japan Earthquake B: Fast Retailing Group's Response Harvard Business Review case study are -
Highly skilled collaborators
– Earthquake Retailing 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 The Great East Japan Earthquake B: Fast Retailing Group's Response HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Earthquake Retailing 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.
Effective Research and Development (R&D)
– Earthquake Retailing 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 The Great East Japan Earthquake B: Fast Retailing Group's Response - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Earthquake Retailing 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 Earthquake Retailing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Earthquake Retailing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Earthquake Retailing 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.
Sustainable margins compare to other players in Strategy & Execution industry
– The Great East Japan Earthquake B: Fast Retailing Group's Response firm has clearly differentiated products in the market place. This has enabled Earthquake Retailing to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Earthquake Retailing to invest into research and development (R&D) and innovation.
Organizational Resilience of Earthquake Retailing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Earthquake Retailing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Earthquake Retailing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Earthquake Retailing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Earthquake Retailing 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 Earthquake Retailing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Great East Japan Earthquake B: Fast Retailing Group's Response Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Earthquake Retailing in the sector have low bargaining power. The Great East Japan Earthquake B: Fast Retailing Group's Response has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Earthquake Retailing to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Earthquake Retailing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Great East Japan Earthquake B: Fast Retailing Group's Response Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses The Great East Japan Earthquake B: Fast Retailing Group's Response | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Great East Japan Earthquake B: Fast Retailing Group's Response are -
Slow to strategic competitive environment developments
– As The Great East Japan Earthquake B: Fast Retailing Group's Response HBR case study mentions - Earthquake Retailing 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.
Interest costs
– Compare to the competition, Earthquake Retailing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Great East Japan Earthquake B: Fast Retailing Group's Response, is just above the industry average. Earthquake Retailing 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 The Great East Japan Earthquake B: Fast Retailing Group's Response, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
High cash cycle compare to competitors
Earthquake Retailing 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.
Low market penetration in new markets
– Outside its home market of Earthquake Retailing, firm in the HBR case study The Great East Japan Earthquake B: Fast Retailing Group's Response needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Earthquake Retailing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Earthquake Retailing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Earthquake Retailing to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Earthquake Retailing 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.
Skills based hiring
– The stress on hiring functional specialists at Earthquake Retailing 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.
Need for greater diversity
– Earthquake Retailing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Great East Japan Earthquake B: Fast Retailing Group's Response, in the dynamic environment Earthquake Retailing has struggled to respond to the nimble upstart competition. Earthquake Retailing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities The Great East Japan Earthquake B: Fast Retailing Group's Response | 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 The Great East Japan Earthquake B: Fast Retailing Group's Response are -
Buying journey improvements
– Earthquake Retailing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Great East Japan Earthquake B: Fast Retailing Group's Response 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.
Loyalty marketing
– Earthquake Retailing 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.
Developing new processes and practices
– Earthquake Retailing 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.
Better consumer reach
– The expansion of the 5G network will help Earthquake Retailing to increase its market reach. Earthquake Retailing 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.
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. Earthquake Retailing 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. Earthquake Retailing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Earthquake Retailing 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, The Great East Japan Earthquake B: Fast Retailing Group's Response, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Earthquake Retailing 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 The Great East Japan Earthquake B: Fast Retailing Group's Response - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Earthquake Retailing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Earthquake Retailing 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.
Leveraging digital technologies
– Earthquake Retailing 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.
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 Earthquake Retailing in the consumer business. Now Earthquake Retailing can target international markets with far fewer capital restrictions requirements than the existing system.
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. Earthquake Retailing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Earthquake Retailing 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 Earthquake Retailing 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.
Threats The Great East Japan Earthquake B: Fast Retailing Group's Response External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Great East Japan Earthquake B: Fast Retailing Group's Response are -
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 Earthquake Retailing business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Earthquake Retailing 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. Earthquake Retailing can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Earthquake Retailing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Earthquake Retailing 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 Strategy & Execution industry regulations.
Increasing wage structure of Earthquake Retailing
– 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 Earthquake Retailing.
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 Earthquake Retailing in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Great East Japan Earthquake B: Fast Retailing Group's Response, Earthquake Retailing 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 .
High dependence on third party suppliers
– Earthquake Retailing 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.
Stagnating economy with rate increase
– Earthquake Retailing 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.
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.
Shortening product life cycle
– it is one of the major threat that Earthquake Retailing is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Earthquake Retailing 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.
Technology acceleration in Forth Industrial Revolution
– Earthquake Retailing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Earthquake Retailing 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.
Weighted SWOT Analysis of The Great East Japan Earthquake B: Fast Retailing Group's Response 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 The Great East Japan Earthquake B: Fast Retailing Group's Response 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 The Great East Japan Earthquake B: Fast Retailing Group's Response 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 The Great East Japan Earthquake B: Fast Retailing Group's Response 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 The Great East Japan Earthquake B: Fast Retailing Group's Response 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 Earthquake Retailing needs to make to build a sustainable competitive advantage.