FANUC Corporation: Reassessing the Firm's Governance and Financial Policies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FANUC Corporation: Reassessing the Firm's Governance and Financial Policies
In February 2015, Daniel Loeb (a US-based activist investor) announced his firm had a large investment in FANUC Corporation, a leading producer of industrial robots and software for machine tools. Loeb was demanding that the Japanese firm change its financial and governance policies (e.g., distribute more cash, fix its "illogical" capital structure, and provide more information to shareholders). FANUC's CEO, Yoshiharu Inaba, and his board must decide if and how to respond. One the one hand, the firm had been very successful having built leading global market shares in each of its core divisions and profitability that exceeded what Goldman Sachs earned on a per person basis. On the other hand, the Japanese government was calling for financial and governance reform as part of the prime minister's recently-announced economic growth strategy known as "Abenomics". Although Inaba and his team had previously considered many of the proposed changes, the question was whether it was now time to actually make some of the changes.
Authors :: Benjamin C. Esty, Nobuo Sato, Akiko Kanno
Swot Analysis of "FANUC Corporation: Reassessing the Firm's Governance and Financial Policies" written by Benjamin C. Esty, Nobuo Sato, Akiko Kanno includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fanuc Inaba facing as an external strategic factors. Some of the topics covered in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies case study are - Strategic Management Strategies, Corporate governance, Economics, Financial analysis, Financial management, Policy, Regulation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the FANUC Corporation: Reassessing the Firm's Governance and Financial Policies casestudy better are - – geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing energy prices,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of FANUC Corporation: Reassessing the Firm's Governance and Financial Policies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fanuc Inaba, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fanuc Inaba 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies can be done for the following purposes –
1. Strategic planning using facts provided in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies case study
2. Improving business portfolio management of Fanuc Inaba
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 Fanuc Inaba
Strengths FANUC Corporation: Reassessing the Firm's Governance and Financial Policies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fanuc Inaba in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies Harvard Business Review case study are -
Innovation driven organization
– Fanuc Inaba is one of the most innovative firm in sector. Manager in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Fanuc Inaba has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fanuc Inaba 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.
High brand equity
– Fanuc Inaba has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fanuc Inaba to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Fanuc Inaba in the sector have low bargaining power. FANUC Corporation: Reassessing the Firm's Governance and Financial Policies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fanuc Inaba to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Fanuc Inaba
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fanuc Inaba does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Fanuc Inaba 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 Fanuc Inaba in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Fanuc Inaba is one of the leading recruiters in the industry. Managers in the FANUC Corporation: Reassessing the Firm's Governance and Financial Policies are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– FANUC Corporation: Reassessing the Firm's Governance and Financial Policies firm has clearly differentiated products in the market place. This has enabled Fanuc Inaba to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Fanuc Inaba to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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.
Diverse revenue streams
– Fanuc Inaba is present in almost all the verticals within the industry. This has provided firm in FANUC Corporation: Reassessing the Firm's Governance and Financial Policies case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Fanuc Inaba digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fanuc Inaba 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.
Cross disciplinary teams
– Horizontal connected teams at the Fanuc Inaba 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.
Weaknesses FANUC Corporation: Reassessing the Firm's Governance and Financial Policies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FANUC Corporation: Reassessing the Firm's Governance and Financial Policies are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fanuc Inaba is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FANUC Corporation: Reassessing the Firm's Governance and Financial Policies can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Fanuc Inaba 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study FANUC Corporation: Reassessing the Firm's Governance and Financial Policies, in the dynamic environment Fanuc Inaba has struggled to respond to the nimble upstart competition. Fanuc Inaba has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Fanuc Inaba 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.
Aligning sales with marketing
– It come across in the case study FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies can leverage the sales team experience to cultivate customer relationships as Fanuc Inaba is planning to shift buying processes online.
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 Fanuc Inaba supply chain. Even after few cautionary changes mentioned in the HBR case study - FANUC Corporation: Reassessing the Firm's Governance and Financial Policies, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fanuc Inaba vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Fanuc Inaba, firm in the HBR case study FANUC Corporation: Reassessing the Firm's Governance and Financial Policies needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Fanuc Inaba 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.
Slow to strategic competitive environment developments
– As FANUC Corporation: Reassessing the Firm's Governance and Financial Policies HBR case study mentions - Fanuc Inaba 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.
Products dominated business model
– Even though Fanuc Inaba 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 - FANUC Corporation: Reassessing the Firm's Governance and Financial Policies should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Fanuc Inaba products
– To increase the profitability and margins on the products, Fanuc Inaba needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities FANUC Corporation: Reassessing the Firm's Governance and Financial Policies | 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fanuc Inaba 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 Fanuc Inaba to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fanuc Inaba 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. Fanuc Inaba 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.
Buying journey improvements
– Fanuc Inaba can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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.
Learning at scale
– Online learning technologies has now opened space for Fanuc Inaba 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fanuc Inaba 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, FANUC Corporation: Reassessing the Firm's Governance and Financial Policies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fanuc Inaba 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fanuc Inaba 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
– Fanuc Inaba 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.
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. Fanuc Inaba can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Fanuc Inaba 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.
Loyalty marketing
– Fanuc Inaba 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.
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 Fanuc Inaba 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.
Better consumer reach
– The expansion of the 5G network will help Fanuc Inaba to increase its market reach. Fanuc Inaba 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.
Threats FANUC Corporation: Reassessing the Firm's Governance and Financial Policies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FANUC Corporation: Reassessing the Firm's Governance and Financial Policies are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fanuc Inaba in the Finance & Accounting industry. The Finance & Accounting 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.
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. Fanuc Inaba can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Fanuc Inaba needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Fanuc Inaba 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.
Increasing wage structure of Fanuc Inaba
– 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 Fanuc Inaba.
Stagnating economy with rate increase
– Fanuc Inaba 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.
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 Fanuc Inaba in the Finance & Accounting sector and impact the bottomline of the organization.
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. Fanuc Inaba 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
– Fanuc Inaba 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 Finance & Accounting industry regulations.
Environmental challenges
– Fanuc Inaba 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. Fanuc Inaba 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.
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 Fanuc Inaba.
Weighted SWOT Analysis of FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 FANUC Corporation: Reassessing the Firm's Governance and Financial Policies 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 Fanuc Inaba needs to make to build a sustainable competitive advantage.
