Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation
Crypton Future Media, a music software company based in Sapporo, Japan, developed Hatsune Miku (HM), a singing voice synthesizer software program (Vocaloid). Users entered lyrics and melodies to create songs, which were then sung by Hatsune Miku, a 16-year-old female virtual singer featured on the software packaging.Initially targeting professionals, HM unexpectedly caught on among amateurs who produced music, lyrics, artwork and videos, which they shared via websites such as YouTube, Nico Nico Douga and Crypton's Piapro. Users often worked collaboratively, and by March 2014, Miku had over 110,000 released songs, 170,000 uploaded videos, 1,000,000 created artworks and nearly two million Facebook "likes." Miku's popularity led to international media coverage and numerous new business opportunities for Crypton. She held sold out "live" concerts worldwide, starred in her own video game series produced by SEGA Games and was "hired" to advertise for companies including Toyota, Google and Domino's Pizza.Six years after the initial launch, Crypton and its chief executive officer were faced with a series of challenges related to the future development of their virtual idol and the businesses that grew around her. Timothy Craig is affiliated with Doshisha Business School.
Authors :: Timothy Craig, Philip Sugai, Lukman Aroean
Swot Analysis of "Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation" written by Timothy Craig, Philip Sugai, Lukman Aroean includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Miku Crypton facing as an external strategic factors. Some of the topics covered in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Miku Crypton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Miku Crypton 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation can be done for the following purposes –
1. Strategic planning using facts provided in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation case study
2. Improving business portfolio management of Miku Crypton
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 Miku Crypton
Strengths Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Miku Crypton in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation firm has clearly differentiated products in the market place. This has enabled Miku Crypton to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Miku Crypton to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Miku Crypton is one of the leading recruiters in the industry. Managers in the Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Strategy & Execution segment
- digital transformation varies from industry to industry. For Miku Crypton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Miku Crypton 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.
Low bargaining power of suppliers
– Suppliers of Miku Crypton in the sector have low bargaining power. Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Miku Crypton to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Miku Crypton has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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.
Successful track record of launching new products
– Miku Crypton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Miku Crypton 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.
Analytics focus
– Miku Crypton 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 Timothy Craig, Philip Sugai, Lukman Aroean 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.
Superior customer experience
– The customer experience strategy of Miku Crypton in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Miku Crypton 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)
– Miku Crypton 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Miku Crypton 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.
Ability to lead change in Strategy & Execution field
– Miku Crypton 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 Miku Crypton in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation are -
Slow decision making process
– As mentioned earlier in the report, Miku Crypton 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. Miku Crypton 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.
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 Miku Crypton supply chain. Even after few cautionary changes mentioned in the HBR case study - Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Miku Crypton vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Miku Crypton, firm in the HBR case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Miku Crypton is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Miku Crypton needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Miku Crypton to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation, is just above the industry average. Miku Crypton 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.
High cash cycle compare to competitors
Miku Crypton 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Timothy Craig, Philip Sugai, Lukman Aroean suggests that, Miku Crypton 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.
Products dominated business model
– Even though Miku Crypton has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation HBR case study mentions - Miku Crypton 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, Miku Crypton 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation, it seems that the employees of Miku Crypton don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation | 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Miku Crypton 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 Miku Crypton 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 Miku Crypton in the consumer business. Now Miku Crypton can target international markets with far fewer capital restrictions requirements than the existing system.
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. Miku Crypton 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. Miku Crypton 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.
Creating value in data economy
– The success of analytics program of Miku Crypton has opened avenues for new revenue streams for the organization in the industry. This can help Miku Crypton to build a more holistic ecosystem as suggested in the Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation case study. Miku Crypton can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Miku Crypton 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.
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 Miku Crypton 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Miku Crypton 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, Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Miku Crypton can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Miku Crypton can use these opportunities to build new business models that can help the communities that Miku Crypton operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Miku Crypton 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.
Developing new processes and practices
– Miku Crypton 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Miku Crypton is facing challenges because of the dominance of functional experts in the organization. Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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.
Learning at scale
– Online learning technologies has now opened space for Miku Crypton to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation are -
Environmental challenges
– Miku Crypton 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. Miku Crypton can take advantage of this fund but it will also bring new competitors in the Strategy & Execution 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.
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. Miku Crypton can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Miku Crypton 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.
High dependence on third party suppliers
– Miku Crypton 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.
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 Miku Crypton business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Miku Crypton 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation, Miku Crypton 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 .
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. Miku Crypton 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.
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 Miku Crypton.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Miku Crypton with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Miku Crypton has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Miku Crypton 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Miku Crypton needs to make to build a sustainable competitive advantage.
