Global Strategy Lessons from Japanese and Korean Business Groups SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Global Strategy Lessons from Japanese and Korean Business Groups
Given the growth in Asian markets, it is important for Western managers to understand what drives the success of Japanese and Korean business groups--keiretsus and chaebols. The purpose here is twofold: 1) to analyze, compare, and contrast the ownership, structure, government influence, financing, and culture of each of these two types of business groups; and 2) to analyze how each has dealt with the recent financial crisis in Asia. From this analysis emerge important lessons for strategic international management. The chaebols and keiretsus both emphasize the idea of harmony, but they have different interpretations of this concept and enact it differently. Both groups have altered their structures in response to the new global financial environment. The chaebols have taken the opportunity to solidify and expand their core business units and become more vertically integrated, whereas the keiretsus have succeeded only in the limited disposal of some nonperforming units.
Authors :: Howard S. Tu, Seung Yong Kim, Sherry E. Sullivan
Swot Analysis of "Global Strategy Lessons from Japanese and Korean Business Groups" written by Howard S. Tu, Seung Yong Kim, Sherry E. Sullivan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Keiretsus Chaebols facing as an external strategic factors. Some of the topics covered in Global Strategy Lessons from Japanese and Korean Business Groups case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Global Strategy Lessons from Japanese and Korean Business Groups casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, technology disruption, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Global Strategy Lessons from Japanese and Korean Business Groups
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Global Strategy Lessons from Japanese and Korean Business Groups case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Keiretsus Chaebols, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Keiretsus Chaebols 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 Global Strategy Lessons from Japanese and Korean Business Groups can be done for the following purposes –
1. Strategic planning using facts provided in Global Strategy Lessons from Japanese and Korean Business Groups case study
2. Improving business portfolio management of Keiretsus Chaebols
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 Keiretsus Chaebols
Strengths Global Strategy Lessons from Japanese and Korean Business Groups | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Keiretsus Chaebols in Global Strategy Lessons from Japanese and Korean Business Groups Harvard Business Review case study are -
High switching costs
– The high switching costs that Keiretsus Chaebols 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.
Sustainable margins compare to other players in Global Business industry
– Global Strategy Lessons from Japanese and Korean Business Groups firm has clearly differentiated products in the market place. This has enabled Keiretsus Chaebols to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Keiretsus Chaebols to invest into research and development (R&D) and innovation.
Analytics focus
– Keiretsus Chaebols 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 Howard S. Tu, Seung Yong Kim, Sherry E. Sullivan 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.
Learning organization
- Keiretsus Chaebols 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 Keiretsus Chaebols is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Global Strategy Lessons from Japanese and Korean Business Groups Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Keiretsus Chaebols is present in almost all the verticals within the industry. This has provided firm in Global Strategy Lessons from Japanese and Korean Business Groups 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.
Organizational Resilience of Keiretsus Chaebols
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Keiretsus Chaebols does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Keiretsus Chaebols 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 Keiretsus Chaebols in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Keiretsus Chaebols has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Keiretsus Chaebols to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Keiretsus Chaebols digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Keiretsus Chaebols 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.
Ability to recruit top talent
– Keiretsus Chaebols is one of the leading recruiters in the industry. Managers in the Global Strategy Lessons from Japanese and Korean Business Groups are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Global Strategy Lessons from Japanese and Korean Business Groups 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.
Cross disciplinary teams
– Horizontal connected teams at the Keiretsus Chaebols 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.
Weaknesses Global Strategy Lessons from Japanese and Korean Business Groups | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Global Strategy Lessons from Japanese and Korean Business Groups are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Global Strategy Lessons from Japanese and Korean Business Groups, is just above the industry average. Keiretsus Chaebols needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Keiretsus Chaebols is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Global Strategy Lessons from Japanese and Korean Business Groups can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Keiretsus Chaebols products
– To increase the profitability and margins on the products, Keiretsus Chaebols needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Keiretsus Chaebols supply chain. Even after few cautionary changes mentioned in the HBR case study - Global Strategy Lessons from Japanese and Korean Business Groups, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Keiretsus Chaebols vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Global Strategy Lessons from Japanese and Korean Business Groups 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 Global Strategy Lessons from Japanese and Korean Business Groups can leverage the sales team experience to cultivate customer relationships as Keiretsus Chaebols is planning to shift buying processes online.
High cash cycle compare to competitors
Keiretsus Chaebols 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.
Slow to strategic competitive environment developments
– As Global Strategy Lessons from Japanese and Korean Business Groups HBR case study mentions - Keiretsus Chaebols 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 Global Strategy Lessons from Japanese and Korean Business Groups, in the dynamic environment Keiretsus Chaebols has struggled to respond to the nimble upstart competition. Keiretsus Chaebols has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Keiretsus Chaebols has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Keiretsus Chaebols 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.
No frontier risks strategy
– After analyzing the HBR case study Global Strategy Lessons from Japanese and Korean Business Groups, 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 Global Strategy Lessons from Japanese and Korean Business Groups | 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 Global Strategy Lessons from Japanese and Korean Business Groups are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Keiretsus Chaebols can use these opportunities to build new business models that can help the communities that Keiretsus Chaebols operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Keiretsus Chaebols can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Keiretsus Chaebols 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.
Using analytics as competitive advantage
– Keiretsus Chaebols 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 Global Strategy Lessons from Japanese and Korean Business Groups - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Keiretsus Chaebols to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Keiretsus Chaebols 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.
Better consumer reach
– The expansion of the 5G network will help Keiretsus Chaebols to increase its market reach. Keiretsus Chaebols 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Keiretsus Chaebols is facing challenges because of the dominance of functional experts in the organization. Global Strategy Lessons from Japanese and Korean Business Groups 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Keiretsus Chaebols 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.
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. Keiretsus Chaebols 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. Keiretsus Chaebols 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Keiretsus Chaebols 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, Global Strategy Lessons from Japanese and Korean Business Groups, 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
– Keiretsus Chaebols 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.
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 Keiretsus Chaebols in the consumer business. Now Keiretsus Chaebols can target international markets with far fewer capital restrictions requirements than the existing system.
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. Keiretsus Chaebols can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Global Strategy Lessons from Japanese and Korean Business Groups External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Global Strategy Lessons from Japanese and Korean Business Groups are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Keiretsus Chaebols 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Global Strategy Lessons from Japanese and Korean Business Groups, Keiretsus Chaebols 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 .
Environmental challenges
– Keiretsus Chaebols needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Keiretsus Chaebols can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Keiretsus Chaebols business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Keiretsus Chaebols 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 Global Strategy Lessons from Japanese and Korean Business Groups .
Shortening product life cycle
– it is one of the major threat that Keiretsus Chaebols is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Keiretsus Chaebols needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Keiretsus Chaebols 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.
High dependence on third party suppliers
– Keiretsus Chaebols 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.
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 Keiretsus Chaebols.
Increasing wage structure of Keiretsus Chaebols
– 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 Keiretsus Chaebols.
Stagnating economy with rate increase
– Keiretsus Chaebols 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.
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.
Weighted SWOT Analysis of Global Strategy Lessons from Japanese and Korean Business Groups 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 Global Strategy Lessons from Japanese and Korean Business Groups 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 Global Strategy Lessons from Japanese and Korean Business Groups 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 Global Strategy Lessons from Japanese and Korean Business Groups 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 Global Strategy Lessons from Japanese and Korean Business Groups 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 Keiretsus Chaebols needs to make to build a sustainable competitive advantage.