Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma
On October 1, 2013 at a meeting of ruling party officials, Japanese Prime Minister Shinzo Abe said that he had decided to go ahead with a plan to increase the sales tax from 5% to 8%, beginning April 1, 2014. This tax hike had become law in August 2012, under then-Prime Minister Yoshihiko Noda. Abe, faced with a choice he did not ask for, sought to make a decision he could live with. Deciding whether to raise the tax had proven very hard for him. He had to take extraordinary care weighing conditions. The Bank of Japan had already fired the first "arrow" of Abenomics, an unconventional easing of the money supply. The second, fiscal stimulus, was constrained by Japan's fiscal rebalancing goals. With regards to the third arrow, a strategy for economic growth, the government was still working out how to break entrenched regulations in farming and employment. Until the very last moment, Abe had to consider whether a tax increase would lead Japan back into the deep valley of deflation and economic stagnation.
Swot Analysis of "Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma" written by Mitsuru Misawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abe Tax facing as an external strategic factors. Some of the topics covered in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma case study are - Strategic Management Strategies, Economy, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
increasing energy prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abe Tax, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abe Tax 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma case study
2. Improving business portfolio management of Abe Tax
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 Abe Tax
Strengths Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abe Tax in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma Harvard Business Review case study are -
High switching costs
– The high switching costs that Abe Tax 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.
Strong track record of project management
– Abe Tax is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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.
Ability to lead change in Global Business field
– Abe Tax 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 Abe Tax in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Abe Tax is present in almost all the verticals within the industry. This has provided firm in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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.
Innovation driven organization
– Abe Tax is one of the most innovative firm in sector. Manager in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Abe Tax has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 recruit top talent
– Abe Tax is one of the leading recruiters in the industry. Managers in the Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Abe Tax 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma - 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
- Abe Tax 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 Abe Tax is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Abe Tax has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abe Tax 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.
Sustainable margins compare to other players in Global Business industry
– Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma firm has clearly differentiated products in the market place. This has enabled Abe Tax to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Abe Tax to invest into research and development (R&D) and innovation.
Weaknesses Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma are -
Skills based hiring
– The stress on hiring functional specialists at Abe Tax 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.
Low market penetration in new markets
– Outside its home market of Abe Tax, firm in the HBR case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma, 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.
Increasing silos among functional specialists
– The organizational structure of Abe Tax is dominated by functional specialists. It is not different from other players in the Global Business segment. Abe Tax needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abe Tax to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma can leverage the sales team experience to cultivate customer relationships as Abe Tax is planning to shift buying processes online.
High cash cycle compare to competitors
Abe Tax 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 bargaining power of channel partners
– Because of the regulatory requirements, Mitsuru Misawa suggests that, Abe Tax 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, Abe Tax 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 operating costs
– Compare to the competitors, firm in the HBR case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Abe Tax 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma, in the dynamic environment Abe Tax has struggled to respond to the nimble upstart competition. Abe Tax has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma, is just above the industry average. Abe Tax 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.
Opportunities Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma | 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma are -
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 Abe Tax 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
– Abe Tax can develop new processes and procedures in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abe Tax 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. Abe Tax 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.
Manufacturing automation
– Abe Tax 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.
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 Abe Tax in the consumer business. Now Abe Tax can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Abe Tax has opened avenues for new revenue streams for the organization in the industry. This can help Abe Tax to build a more holistic ecosystem as suggested in the Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma case study. Abe Tax can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Abe Tax can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abe Tax is facing challenges because of the dominance of functional experts in the organization. Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abe Tax 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.
Using analytics as competitive advantage
– Abe Tax 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abe Tax to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abe Tax can use these opportunities to build new business models that can help the communities that Abe Tax operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Abe Tax 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 Abe Tax 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma are -
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 Abe Tax business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Abe Tax 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.
Increasing wage structure of Abe Tax
– 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 Abe Tax.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma, Abe Tax may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abe Tax 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma .
Shortening product life cycle
– it is one of the major threat that Abe Tax 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 Abe Tax 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.
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 Abe Tax.
Technology acceleration in Forth Industrial Revolution
– Abe Tax has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Abe Tax 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abe Tax with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Abe Tax 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.
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 Abe Tax in the Global Business sector and impact the bottomline of the organization.
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. Abe Tax needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma 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 Abe Tax needs to make to build a sustainable competitive advantage.