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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, technology disruption,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, 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 -
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.
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.
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.
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.
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.
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.
Training and development
– Trading Outsourcing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in J-TRADING: Full Circle Outsourcing 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.
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.
Successful track record of launching new products
– Trading Outsourcing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Trading Outsourcing 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.
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.
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.
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 -
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Valerie Jaiswal, Natalia Levina suggests that, Trading Outsourcing 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.
Skills based hiring
– The stress on hiring functional specialists at Trading Outsourcing 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.
Lack of clear differentiation of Trading Outsourcing products
– To increase the profitability and margins on the products, Trading Outsourcing needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Slow decision making process
– As mentioned earlier in the report, Trading Outsourcing 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. Trading Outsourcing 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.
Need for greater diversity
– Trading Outsourcing has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study J-TRADING: Full Circle Outsourcing, in the dynamic environment Trading Outsourcing has struggled to respond to the nimble upstart competition. Trading Outsourcing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Trading Outsourcing 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.
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.
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 -
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.
Manufacturing automation
– Trading Outsourcing can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Trading Outsourcing 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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Trading Outsourcing is facing challenges because of the dominance of functional experts in the organization. J-TRADING: Full Circle Outsourcing 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.
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 Trading Outsourcing 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Trading Outsourcing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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 -
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.
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 Trading Outsourcing business can come under increasing regulations regarding data privacy, data security, etc.
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 .
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.
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.
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.
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.
Environmental challenges
– Trading Outsourcing 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. Trading Outsourcing can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Trading Outsourcing in the Technology & Operations industry. The Technology & Operations 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.
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.
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.
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.
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.
