Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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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 - – increasing commodity prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, there is backlash against globalization, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, 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 -
Operational resilience
– The operational resilience strategy in the Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Miku Crypton 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 Miku Crypton is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Organizational Resilience of Miku Crypton
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Miku Crypton does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Miku Crypton is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Miku Crypton 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Miku Crypton is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Miku Crypton 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
– Miku Crypton 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Miku Crypton has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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 Miku Crypton 's lucrative customers.
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.
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.
Lack of clear differentiation of Miku Crypton products
– To increase the profitability and margins on the products, Miku Crypton needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
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.
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.
Building a culture of innovation
– managers at Miku Crypton 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Miku Crypton 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Miku Crypton can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Miku Crypton can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Buying journey improvements
– Miku Crypton can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hatsune Miku: Japanese Virtual Idol Ignites Global Value Co-creation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Miku Crypton in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
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 -
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.
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.
Regulatory challenges
– Miku Crypton 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.
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.
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.
Increasing wage structure of Miku Crypton
– 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 Miku Crypton.
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.
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 Miku Crypton is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Miku Crypton 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.
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.