KITKAT in Japan (D): A Trajectory for Future Growth SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of KITKAT in Japan (D): A Trajectory for Future Growth
Supplement to case W17424. It was 2017 and the KITKAT brand in Japan was at a critical juncture. The KITKAT marketing leaders sat down for a special meeting to review how NestlA? Japan had been able to create meaning and value for their brand. However, as they began to discuss their options for future growth, they faced difficult decisions: Should they look to export the flavor variations that had become such big hits in Japan to overseas markets such as China, the European Union, or the United States? Travelers from these countries regularly bought a wide range of KITKAT flavor varieties during their trips to Japan to bring home. Or should they focus on expanding the e-commerce sales of premium KITKAT flavors? Philip Sugai is affiliated with Doshisha University.
Swot Analysis of "KITKAT in Japan (D): A Trajectory for Future Growth" written by Philip Sugai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kitkat Japan facing as an external strategic factors. Some of the topics covered in KITKAT in Japan (D): A Trajectory for Future Growth case study are - Strategic Management Strategies, Customers, Growth strategy, Innovation and Sales & Marketing.
Some of the macro environment factors that can be used to understand the KITKAT in Japan (D): A Trajectory for Future Growth casestudy better are - – there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is backlash against globalization, technology disruption, etc
Introduction to SWOT Analysis of KITKAT in Japan (D): A Trajectory for Future Growth
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KITKAT in Japan (D): A Trajectory for Future Growth case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitkat Japan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitkat Japan 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 KITKAT in Japan (D): A Trajectory for Future Growth can be done for the following purposes –
1. Strategic planning using facts provided in KITKAT in Japan (D): A Trajectory for Future Growth case study
2. Improving business portfolio management of Kitkat Japan
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kitkat Japan
Strengths KITKAT in Japan (D): A Trajectory for Future Growth | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitkat Japan in KITKAT in Japan (D): A Trajectory for Future Growth Harvard Business Review case study are -
Training and development
– Kitkat Japan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in KITKAT in Japan (D): A Trajectory for Future Growth 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.
Operational resilience
– The operational resilience strategy in the KITKAT in Japan (D): A Trajectory for Future Growth 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Kitkat Japan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kitkat Japan 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
– Kitkat Japan 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 Philip Sugai 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.
Ability to lead change in Sales & Marketing field
– Kitkat Japan 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 Kitkat Japan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Kitkat Japan is present in almost all the verticals within the industry. This has provided firm in KITKAT in Japan (D): A Trajectory for Future Growth 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.
Ability to recruit top talent
– Kitkat Japan is one of the leading recruiters in the industry. Managers in the KITKAT in Japan (D): A Trajectory for Future Growth 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 Sales & Marketing industry
– KITKAT in Japan (D): A Trajectory for Future Growth firm has clearly differentiated products in the market place. This has enabled Kitkat Japan to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Kitkat Japan to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Kitkat Japan 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 Kitkat Japan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Kitkat Japan 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 KITKAT in Japan (D): A Trajectory for Future Growth - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Kitkat Japan 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 Kitkat Japan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KITKAT in Japan (D): A Trajectory for Future Growth Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses KITKAT in Japan (D): A Trajectory for Future Growth | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KITKAT in Japan (D): A Trajectory for Future Growth are -
Slow decision making process
– As mentioned earlier in the report, Kitkat Japan 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. Kitkat Japan 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.
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 Kitkat Japan supply chain. Even after few cautionary changes mentioned in the HBR case study - KITKAT in Japan (D): A Trajectory for Future Growth, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kitkat Japan vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Kitkat Japan 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 - KITKAT in Japan (D): A Trajectory for Future Growth should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Kitkat Japan 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.
No frontier risks strategy
– After analyzing the HBR case study KITKAT in Japan (D): A Trajectory for Future Growth, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Increasing silos among functional specialists
– The organizational structure of Kitkat Japan is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Kitkat Japan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kitkat Japan 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 KITKAT in Japan (D): A Trajectory for Future Growth, is just above the industry average. Kitkat Japan 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.
Aligning sales with marketing
– It come across in the case study KITKAT in Japan (D): A Trajectory for Future Growth 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 KITKAT in Japan (D): A Trajectory for Future Growth can leverage the sales team experience to cultivate customer relationships as Kitkat Japan is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Philip Sugai suggests that, Kitkat Japan 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.
Slow to strategic competitive environment developments
– As KITKAT in Japan (D): A Trajectory for Future Growth HBR case study mentions - Kitkat Japan 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study KITKAT in Japan (D): A Trajectory for Future Growth, in the dynamic environment Kitkat Japan has struggled to respond to the nimble upstart competition. Kitkat Japan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities KITKAT in Japan (D): A Trajectory for Future Growth | 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 KITKAT in Japan (D): A Trajectory for Future Growth are -
Using analytics as competitive advantage
– Kitkat Japan 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 KITKAT in Japan (D): A Trajectory for Future Growth - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kitkat Japan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Kitkat Japan can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Buying journey improvements
– Kitkat Japan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. KITKAT in Japan (D): A Trajectory for Future Growth 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kitkat Japan 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, KITKAT in Japan (D): A Trajectory for Future Growth, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Kitkat Japan 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kitkat Japan can use these opportunities to build new business models that can help the communities that Kitkat Japan operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Kitkat Japan 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.
Developing new processes and practices
– Kitkat Japan can develop new processes and procedures in Sales & Marketing 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.
Loyalty marketing
– Kitkat Japan 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kitkat Japan 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.
Creating value in data economy
– The success of analytics program of Kitkat Japan has opened avenues for new revenue streams for the organization in the industry. This can help Kitkat Japan to build a more holistic ecosystem as suggested in the KITKAT in Japan (D): A Trajectory for Future Growth case study. Kitkat Japan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Kitkat Japan to increase its market reach. Kitkat Japan 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.
Learning at scale
– Online learning technologies has now opened space for Kitkat Japan 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.
Threats KITKAT in Japan (D): A Trajectory for Future Growth External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study KITKAT in Japan (D): A Trajectory for Future Growth are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kitkat Japan in the Sales & Marketing industry. The Sales & Marketing 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. Kitkat Japan needs to understand the core reasons impacting the Sales & Marketing 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.
Consumer confidence and its impact on Kitkat Japan 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.
Stagnating economy with rate increase
– Kitkat Japan 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.
Regulatory challenges
– Kitkat Japan 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 Sales & Marketing industry regulations.
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. Kitkat Japan 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.
Technology acceleration in Forth Industrial Revolution
– Kitkat Japan has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kitkat Japan needs to keep up with the evolution of technology in the Sales & Marketing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study KITKAT in Japan (D): A Trajectory for Future Growth, Kitkat Japan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kitkat Japan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kitkat Japan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Kitkat Japan.
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 Kitkat Japan in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of KITKAT in Japan (D): A Trajectory for Future Growth 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 KITKAT in Japan (D): A Trajectory for Future Growth 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 KITKAT in Japan (D): A Trajectory for Future Growth 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 KITKAT in Japan (D): A Trajectory for Future Growth 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 KITKAT in Japan (D): A Trajectory for Future Growth 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 Kitkat Japan needs to make to build a sustainable competitive advantage.
