J-TRADING: Full Circle Outsourcing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of J-TRADING: Full Circle Outsourcing
J-TRADING is a US-based arm of a Japanese keiretsu that is focused on commodity trading between the East and North America counting about 350 employees in the US. It has experienced problems with its information technology (IT) infrastructure and help-desk functions. IT employees were not motivated to work on these rather mundane tasks leading to quality and cost issues. J-TRADING CIO decided to solve the problem by outsourcing both functions. The case relays J-TRADING's outsourcing journey through its ups and downs discussing the process of vendor evaluation and selection, task transition, relationship management, and business outcomes. The case provides full financial details necessary for financial analysis and asks students to evaluate the sourcing decision itself as well as vendor selection and governance processes. It also asks students to elaborate on alternative sourcing approaches such as offshoring and cloud-based solutions.
Swot Analysis of "J-TRADING: Full Circle Outsourcing" written by Valerie Jaiswal, Natalia Levina includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Trading Outsourcing facing as an external strategic factors. Some of the topics covered in J-TRADING: Full Circle Outsourcing case study are - Strategic Management Strategies, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the J-TRADING: Full Circle Outsourcing casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing energy prices, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, there is backlash against globalization,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of J-TRADING: Full Circle Outsourcing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in J-TRADING: Full Circle Outsourcing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Trading Outsourcing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Trading Outsourcing 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 J-TRADING: Full Circle Outsourcing can be done for the following purposes –
1. Strategic planning using facts provided in J-TRADING: Full Circle Outsourcing case study
2. Improving business portfolio management of Trading Outsourcing
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Trading Outsourcing
Strengths J-TRADING: Full Circle Outsourcing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Trading Outsourcing in J-TRADING: Full Circle Outsourcing Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the J-TRADING: Full Circle Outsourcing 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.
Innovation driven organization
– Trading Outsourcing is one of the most innovative firm in sector. Manager in J-TRADING: Full Circle Outsourcing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Technology & Operations field
– Trading Outsourcing 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 Trading Outsourcing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Trading Outsourcing 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 J-TRADING: Full Circle Outsourcing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Trading Outsourcing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Trading Outsourcing 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.
Sustainable margins compare to other players in Technology & Operations industry
– J-TRADING: Full Circle Outsourcing firm has clearly differentiated products in the market place. This has enabled Trading Outsourcing to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Trading Outsourcing to invest into research and development (R&D) and innovation.
Organizational Resilience of Trading Outsourcing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Trading Outsourcing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Trading Outsourcing 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 Valerie Jaiswal, Natalia Levina 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.
Cross disciplinary teams
– Horizontal connected teams at the Trading Outsourcing 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.
Superior customer experience
– The customer experience strategy of Trading Outsourcing 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
– Trading Outsourcing 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
– Trading Outsourcing is one of the leading recruiters in the industry. Managers in the J-TRADING: Full Circle Outsourcing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses J-TRADING: Full Circle Outsourcing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of J-TRADING: Full Circle Outsourcing are -
Increasing silos among functional specialists
– The organizational structure of Trading Outsourcing is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Trading Outsourcing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Trading Outsourcing to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study J-TRADING: Full Circle Outsourcing 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 J-TRADING: Full Circle Outsourcing can leverage the sales team experience to cultivate customer relationships as Trading Outsourcing is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study J-TRADING: Full Circle Outsourcing, it seems that the employees of Trading Outsourcing 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the J-TRADING: Full Circle Outsourcing 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 Trading Outsourcing has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study J-TRADING: Full Circle Outsourcing, is just above the industry average. Trading Outsourcing 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.
Interest costs
– Compare to the competition, Trading Outsourcing 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.
Slow to strategic competitive environment developments
– As J-TRADING: Full Circle Outsourcing HBR case study mentions - Trading Outsourcing 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, Trading Outsourcing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study J-TRADING: Full Circle Outsourcing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study J-TRADING: Full Circle Outsourcing 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 Trading Outsourcing '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 Trading Outsourcing supply chain. Even after few cautionary changes mentioned in the HBR case study - J-TRADING: Full Circle Outsourcing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Trading Outsourcing vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study J-TRADING: Full Circle Outsourcing, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Opportunities J-TRADING: Full Circle Outsourcing | 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 J-TRADING: Full Circle Outsourcing are -
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 Trading Outsourcing in the consumer business. Now Trading Outsourcing can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Trading Outsourcing to increase its market reach. Trading Outsourcing 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 Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Trading Outsourcing 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. Trading Outsourcing 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.
Leveraging digital technologies
– Trading Outsourcing 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.
Using analytics as competitive advantage
– Trading Outsourcing 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 J-TRADING: Full Circle Outsourcing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Trading Outsourcing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Trading Outsourcing 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, J-TRADING: Full Circle Outsourcing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Trading Outsourcing 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 Trading Outsourcing to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Trading Outsourcing can develop new processes and procedures in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Trading Outsourcing has opened avenues for new revenue streams for the organization in the industry. This can help Trading Outsourcing to build a more holistic ecosystem as suggested in the J-TRADING: Full Circle Outsourcing case study. Trading Outsourcing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Trading Outsourcing 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.
Buying journey improvements
– Trading Outsourcing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. J-TRADING: Full Circle Outsourcing 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.
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. Trading Outsourcing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Trading Outsourcing 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 Technology & Operations segment.
Threats J-TRADING: Full Circle Outsourcing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study J-TRADING: Full Circle Outsourcing are -
Technology acceleration in Forth Industrial Revolution
– Trading Outsourcing has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Trading Outsourcing needs to keep up with the evolution of technology in the Technology & Operations 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.
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. Trading Outsourcing needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study J-TRADING: Full Circle Outsourcing, Trading Outsourcing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Trading Outsourcing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Trading Outsourcing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Trading Outsourcing can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study J-TRADING: Full Circle Outsourcing .
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 Trading Outsourcing.
Regulatory challenges
– Trading Outsourcing 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 Technology & Operations industry regulations.
Increasing wage structure of Trading Outsourcing
– 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 Trading Outsourcing.
Consumer confidence and its impact on Trading Outsourcing 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.
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 Trading Outsourcing in the Technology & Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Trading Outsourcing is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of J-TRADING: Full Circle Outsourcing 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 J-TRADING: Full Circle Outsourcing 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 J-TRADING: Full Circle Outsourcing 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 J-TRADING: Full Circle Outsourcing 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 J-TRADING: Full Circle Outsourcing 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 Trading Outsourcing needs to make to build a sustainable competitive advantage.