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 - – challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Abe Tax 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 Abe Tax in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Abe Tax
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Abe Tax does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Low bargaining power of suppliers
– Suppliers of Abe Tax in the sector have low bargaining power. Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abe Tax to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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 -
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.
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.
Lack of clear differentiation of Abe Tax products
– To increase the profitability and margins on the products, Abe Tax needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Abe Tax has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Abe Tax 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 - Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma should strive to include more intangible value offerings along with its core products and services.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Abe Tax 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. Abe Tax 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 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.
Slow to strategic competitive environment developments
– As Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma HBR case study mentions - Abe Tax 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.
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.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abe Tax 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 Abe Tax to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abe Tax 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.
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.
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. Abe Tax can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abe Tax 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, Sales Tax Increase in 2014 Under Abenomics: The Japanese Government's Dilemma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Building a culture of innovation
– managers at Abe Tax can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
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.
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.
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 -
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.
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. Abe Tax 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.
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.
High dependence on third party suppliers
– Abe Tax 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.
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.
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.
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.
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.
Consumer confidence and its impact on Abe Tax 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.
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.
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 .
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.
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.
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.
