Case Study Description of Japan: Deficits, Demography, and Deflation
By 2005, Japan's debt had risen to 163% of GDP. For more than a decade, the government had run huge deficits, trying unsuccessfully to stimulate economic growth. Interest rates, meanwhile, had been zero for years. But with slow growth and banks in crisis, nothing had worked very well until some recovery in 2004. Now, the government is trying to repair its fiscal damage in the face of continuing slow growth and huge pension and health care obligations to a population that is aging fast. Hezio Takenaka, the minister for economy and postal privatization, faces a imposing agenda--to restart the economy while lowering the deficits and reforming social security.
Swot Analysis of "Japan: Deficits, Demography, and Deflation" written by Richard H.K. Vietor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Deficits Slow facing as an external strategic factors. Some of the topics covered in Japan: Deficits, Demography, and Deflation case study are - Strategic Management Strategies, Demographics, Economics, Economy, Government and Global Business.
Some of the macro environment factors that can be used to understand the Japan: Deficits, Demography, and Deflation casestudy better are - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, technology disruption,
supply chains are disrupted by pandemic , geopolitical disruptions, etc
Introduction to SWOT Analysis of Japan: Deficits, Demography, and Deflation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Japan: Deficits, Demography, and Deflation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deficits Slow, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deficits Slow 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 Japan: Deficits, Demography, and Deflation can be done for the following purposes –
1. Strategic planning using facts provided in Japan: Deficits, Demography, and Deflation case study
2. Improving business portfolio management of Deficits Slow
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Deficits Slow
Strengths Japan: Deficits, Demography, and Deflation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Deficits Slow in Japan: Deficits, Demography, and Deflation Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Japan: Deficits, Demography, and Deflation firm has clearly differentiated products in the market place. This has enabled Deficits Slow to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Deficits Slow to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Deficits Slow is present in almost all the verticals within the industry. This has provided firm in Japan: Deficits, Demography, and Deflation 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.
Strong track record of project management
– Deficits Slow is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Deficits Slow 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 Japan: Deficits, Demography, and Deflation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Deficits Slow has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Deficits Slow is one of the leading recruiters in the industry. Managers in the Japan: Deficits, Demography, and Deflation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Deficits Slow digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deficits Slow 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.
Training and development
– Deficits Slow has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Japan: Deficits, Demography, and Deflation 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.
Ability to lead change in Global Business field
– Deficits Slow 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 Deficits Slow in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Deficits Slow 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.
Learning organization
- Deficits Slow 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 Deficits Slow is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Japan: Deficits, Demography, and Deflation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Deficits Slow has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Deficits Slow to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Japan: Deficits, Demography, and Deflation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Japan: Deficits, Demography, and Deflation are -
Low market penetration in new markets
– Outside its home market of Deficits Slow, firm in the HBR case study Japan: Deficits, Demography, and Deflation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Deficits Slow 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Japan: Deficits, Demography, and Deflation 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 Deficits Slow 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Japan: Deficits, Demography, and Deflation, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow decision making process
– As mentioned earlier in the report, Deficits Slow 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. Deficits Slow 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.
Products dominated business model
– Even though Deficits Slow 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 - Japan: Deficits, Demography, and Deflation should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard H.K. Vietor suggests that, Deficits Slow 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Deficits Slow needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Deficits Slow supply chain. Even after few cautionary changes mentioned in the HBR case study - Japan: Deficits, Demography, and Deflation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deficits Slow vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Deficits Slow 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.
Increasing silos among functional specialists
– The organizational structure of Deficits Slow is dominated by functional specialists. It is not different from other players in the Global Business segment. Deficits Slow needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Deficits Slow to focus more on services rather than just following the product oriented approach.
Opportunities Japan: Deficits, Demography, and Deflation | 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 Japan: Deficits, Demography, and Deflation are -
Loyalty marketing
– Deficits Slow has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Deficits Slow 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.
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 Deficits Slow in the consumer business. Now Deficits Slow can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Deficits Slow is facing challenges because of the dominance of functional experts in the organization. Japan: Deficits, Demography, and Deflation 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.
Using analytics as competitive advantage
– Deficits Slow 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 Japan: Deficits, Demography, and Deflation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Deficits Slow to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Deficits Slow 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Deficits Slow can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Deficits Slow can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Better consumer reach
– The expansion of the 5G network will help Deficits Slow to increase its market reach. Deficits Slow 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 Deficits Slow has opened avenues for new revenue streams for the organization in the industry. This can help Deficits Slow to build a more holistic ecosystem as suggested in the Japan: Deficits, Demography, and Deflation case study. Deficits Slow can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Deficits Slow can use these opportunities to build new business models that can help the communities that Deficits Slow operates in. Secondly it can use opportunities from government spending in Global Business sector.
Learning at scale
– Online learning technologies has now opened space for Deficits Slow 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Deficits Slow in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Threats Japan: Deficits, Demography, and Deflation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Japan: Deficits, Demography, and Deflation are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Deficits Slow 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 Japan: Deficits, Demography, and Deflation .
Technology acceleration in Forth Industrial Revolution
– Deficits Slow has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Deficits Slow needs to keep up with the evolution of technology in the Global Business 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.
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 Deficits Slow.
Regulatory challenges
– Deficits Slow 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 Global Business industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Deficits Slow with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
High dependence on third party suppliers
– Deficits Slow 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.
Shortening product life cycle
– it is one of the major threat that Deficits Slow is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Deficits Slow in the Global Business industry. The Global Business 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.
Consumer confidence and its impact on Deficits Slow 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Deficits Slow can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Deficits Slow needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Japan: Deficits, Demography, and Deflation 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 Japan: Deficits, Demography, and Deflation 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 Japan: Deficits, Demography, and Deflation 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 Japan: Deficits, Demography, and Deflation 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 Japan: Deficits, Demography, and Deflation 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 Deficits Slow needs to make to build a sustainable competitive advantage.
