In 1995, Toshiba was the market leader in portable computer sales worldwide. This case describes the assembly of portable notebook computers in Toshiba's Ome factory in Ome, Japan, providing insights into some of the reasons for Toshiba's success. In addition to describing production techniques such as dynamic line balancing, this case probes the nature of the Japanese workforce and the unique problems faced by Japanese businesses.
Authors :: H. Kent Bowen, Janice H. Hammond, Sylvie Ryckebusch, Hiroshi Uchikoga
Swot Analysis of "Toshiba: Ome Works" written by H. Kent Bowen, Janice H. Hammond, Sylvie Ryckebusch, Hiroshi Uchikoga includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ome Toshiba's facing as an external strategic factors. Some of the topics covered in Toshiba: Ome Works case study are - Strategic Management Strategies, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Toshiba: Ome Works casestudy better are - – challanges to central banks by blockchain based private currencies, increasing energy prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Toshiba: Ome Works
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Toshiba: Ome Works case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ome Toshiba's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ome Toshiba's 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 Toshiba: Ome Works can be done for the following purposes –
1. Strategic planning using facts provided in Toshiba: Ome Works case study
2. Improving business portfolio management of Ome Toshiba's
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 Ome Toshiba's
Strengths Toshiba: Ome Works | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ome Toshiba's in Toshiba: Ome Works Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ome Toshiba's 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Ome Toshiba's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ome Toshiba's 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.
Innovation driven organization
– Ome Toshiba's is one of the most innovative firm in sector. Manager in Toshiba: Ome Works Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Ome Toshiba's 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 Ome Toshiba's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Toshiba: Ome Works Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Ome Toshiba's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ome Toshiba's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ome Toshiba's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Toshiba: Ome Works HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Ome Toshiba's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Ome Toshiba's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Toshiba: Ome Works 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.
Effective Research and Development (R&D)
– Ome Toshiba's 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 Toshiba: Ome Works - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Ome Toshiba's is present in almost all the verticals within the industry. This has provided firm in Toshiba: Ome Works 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.
Sustainable margins compare to other players in Technology & Operations industry
– Toshiba: Ome Works firm has clearly differentiated products in the market place. This has enabled Ome Toshiba's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Ome Toshiba's to invest into research and development (R&D) and innovation.
Analytics focus
– Ome Toshiba's 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 H. Kent Bowen, Janice H. Hammond, Sylvie Ryckebusch, Hiroshi Uchikoga 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.
Weaknesses Toshiba: Ome Works | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Toshiba: Ome Works are -
Capital Spending Reduction
– Even during the low interest decade, Ome Toshiba's 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.
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 Ome Toshiba's supply chain. Even after few cautionary changes mentioned in the HBR case study - Toshiba: Ome Works, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ome Toshiba's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, H. Kent Bowen, Janice H. Hammond, Sylvie Ryckebusch, Hiroshi Uchikoga suggests that, Ome Toshiba's 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.
Lack of clear differentiation of Ome Toshiba's products
– To increase the profitability and margins on the products, Ome Toshiba's needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Ome Toshiba's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Ome Toshiba's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ome Toshiba's to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Toshiba: Ome Works, is just above the industry average. Ome Toshiba's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ome Toshiba's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Toshiba: Ome Works can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Ome Toshiba's 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 - Toshiba: Ome Works should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Ome Toshiba's 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 decision making process
– As mentioned earlier in the report, Ome Toshiba's 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. Ome Toshiba's 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.
No frontier risks strategy
– After analyzing the HBR case study Toshiba: Ome Works, 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 Toshiba: Ome Works | 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 Toshiba: Ome Works are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ome Toshiba's 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. Ome Toshiba's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ome Toshiba's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ome Toshiba's can use these opportunities to build new business models that can help the communities that Ome Toshiba's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Creating value in data economy
– The success of analytics program of Ome Toshiba's has opened avenues for new revenue streams for the organization in the industry. This can help Ome Toshiba's to build a more holistic ecosystem as suggested in the Toshiba: Ome Works case study. Ome Toshiba's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Ome Toshiba's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Ome Toshiba's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Ome Toshiba's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ome Toshiba's 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 Ome Toshiba's to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ome Toshiba's in the consumer business. Now Ome Toshiba's 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 Ome Toshiba's to increase its market reach. Ome Toshiba's 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.
Loyalty marketing
– Ome Toshiba's 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.
Using analytics as competitive advantage
– Ome Toshiba's 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 Toshiba: Ome Works - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ome Toshiba's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Toshiba: Ome Works External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Toshiba: Ome Works are -
Consumer confidence and its impact on Ome Toshiba's 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 Ome Toshiba's
– 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 Ome Toshiba's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ome Toshiba's 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 Toshiba: Ome Works .
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 Ome Toshiba's business can come under increasing regulations regarding data privacy, data security, etc.
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 Ome Toshiba's in the Technology & Operations sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Ome Toshiba's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Ome Toshiba's 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. Ome Toshiba's can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Toshiba: Ome Works, Ome Toshiba's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ome Toshiba's 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.
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 Ome Toshiba's.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ome Toshiba's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Toshiba: Ome Works 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 Toshiba: Ome Works 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 Toshiba: Ome Works 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 Toshiba: Ome Works 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 Toshiba: Ome Works 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 Ome Toshiba's needs to make to build a sustainable competitive advantage.
