ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
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Case Study Description of ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION?
The economic policies advocated by Prime Minister Shinzo Abe of Japan, dubbed Abenomics, have weakened the yen and given new life to Japan's stock market. There are three components of Abenomics: monetary easing, fiscal spending, and growth strategies. The economy-boosting effects of Abenomics and the Bank of Japan's (BOJ's) bold monetary easing policy are stirring up considerable global interest in Japan. Of the three components of Abenomics, monetary easing and fiscal spending are unlikely to inflict much pain on the public, apart from the fact that younger generations will be forced to pay back the debt the government is rapidly incurring. But the third component, growth strategies, can only be effective when addressing regulatory issues that have long been left untouched. What Japan needs most is regulatory and structural reform. These painful, drastic reforms will shuffle the deck for protected businesses. While structural reforms almost always inflict pain on vested interests protected by regulatory walls, creative initiatives by newcomers benefit consumers and help to revitalize the economy.
Swot Analysis of "ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION?" written by Mitsuru Misawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abenomics Easing facing as an external strategic factors. Some of the topics covered in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? case study are - Strategic Management Strategies, Growth strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? casestudy better are - – cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic ,
increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abenomics Easing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abenomics Easing 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? can be done for the following purposes –
1. Strategic planning using facts provided in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? case study
2. Improving business portfolio management of Abenomics Easing
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Abenomics Easing
Strengths ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abenomics Easing in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? Harvard Business Review case study are -
Training and development
– Abenomics Easing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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.
Successful track record of launching new products
– Abenomics Easing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abenomics Easing 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.
Effective Research and Development (R&D)
– Abenomics Easing 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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.
Superior customer experience
– The customer experience strategy of Abenomics Easing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? firm has clearly differentiated products in the market place. This has enabled Abenomics Easing to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Abenomics Easing to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Abenomics Easing 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.
Analytics focus
– Abenomics Easing 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 Mitsuru Misawa 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Abenomics Easing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abenomics Easing 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.
Operational resilience
– The operational resilience strategy in the ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? 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.
Innovation driven organization
– Abenomics Easing is one of the most innovative firm in sector. Manager in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Abenomics Easing in the sector have low bargaining power. ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abenomics Easing to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Abenomics Easing has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? are -
Skills based hiring
– The stress on hiring functional specialists at Abenomics Easing 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 Abenomics Easing, firm in the HBR case study ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 Abenomics Easing 's lucrative customers.
Products dominated business model
– Even though Abenomics Easing 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 - ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Abenomics Easing 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 Abenomics Easing supply chain. Even after few cautionary changes mentioned in the HBR case study - ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abenomics Easing vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION?, is just above the industry average. Abenomics Easing 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.
Increasing silos among functional specialists
– The organizational structure of Abenomics Easing is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Abenomics Easing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abenomics Easing to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Abenomics Easing 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, Abenomics Easing 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.
Aligning sales with marketing
– It come across in the case study ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? can leverage the sales team experience to cultivate customer relationships as Abenomics Easing is planning to shift buying processes online.
Opportunities ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? are -
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. Abenomics Easing 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, Abenomics Easing can use these opportunities to build new business models that can help the communities that Abenomics Easing operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abenomics Easing 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 Abenomics Easing to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Abenomics Easing to increase its market reach. Abenomics Easing 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.
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 Abenomics Easing 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 Abenomics Easing in the consumer business. Now Abenomics Easing can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Abenomics Easing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abenomics Easing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Abenomics Easing has opened avenues for new revenue streams for the organization in the industry. This can help Abenomics Easing to build a more holistic ecosystem as suggested in the ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? case study. Abenomics Easing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Abenomics Easing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abenomics Easing 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. Abenomics Easing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abenomics Easing is facing challenges because of the dominance of functional experts in the organization. ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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.
Developing new processes and practices
– Abenomics Easing can develop new processes and procedures in Leadership & Managing People 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.
Threats ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? are -
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 Abenomics Easing in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abenomics Easing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Abenomics Easing 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.
Increasing wage structure of Abenomics Easing
– 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 Abenomics Easing.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abenomics Easing 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG DEFLATION? .
Environmental challenges
– Abenomics Easing 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. Abenomics Easing can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Abenomics Easing 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 Abenomics Easing in the Leadership & Managing People industry. The Leadership & Managing People 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.
Technology acceleration in Forth Industrial Revolution
– Abenomics Easing has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Abenomics Easing needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Abenomics Easing business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abenomics Easing 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
– Abenomics Easing 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.
Weighted SWOT Analysis of ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 ABENOMICS OF JAPAN: WHAT WAS IT? COULD THIS CONQUER JAPAN'S DECADE-LONG 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 Abenomics Easing needs to make to build a sustainable competitive advantage.
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