Case Study Description of Komatsu: Ryoichi Kawai's Leadership
Highlights the role played by Ryoichi Kawai in building a company that was able to challenge industry leader Caterpillar. A rewritten version of an earlier case.
Swot Analysis of "Komatsu: Ryoichi Kawai's Leadership" written by Christopher A. Bartlett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ryoichi Kawai facing as an external strategic factors. Some of the topics covered in Komatsu: Ryoichi Kawai's Leadership case study are - Strategic Management Strategies, Corporate governance, Growth strategy, International business, Leadership, Operations management, Strategy execution and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Komatsu: Ryoichi Kawai's Leadership casestudy better are - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Komatsu: Ryoichi Kawai's Leadership
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Komatsu: Ryoichi Kawai's Leadership case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ryoichi Kawai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ryoichi Kawai 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 Komatsu: Ryoichi Kawai's Leadership can be done for the following purposes –
1. Strategic planning using facts provided in Komatsu: Ryoichi Kawai's Leadership case study
2. Improving business portfolio management of Ryoichi Kawai
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 Ryoichi Kawai
Strengths Komatsu: Ryoichi Kawai's Leadership | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ryoichi Kawai in Komatsu: Ryoichi Kawai's Leadership Harvard Business Review case study are -
Learning organization
- Ryoichi Kawai 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 Ryoichi Kawai is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Komatsu: Ryoichi Kawai's Leadership Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Ryoichi Kawai is one of the most innovative firm in sector. Manager in Komatsu: Ryoichi Kawai's Leadership Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Ryoichi Kawai 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 Ryoichi Kawai in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ryoichi Kawai digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ryoichi Kawai 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.
High brand equity
– Ryoichi Kawai has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ryoichi Kawai to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Ryoichi Kawai is one of the leading recruiters in the industry. Managers in the Komatsu: Ryoichi Kawai's Leadership are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Ryoichi Kawai
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ryoichi Kawai does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Ryoichi Kawai in the sector have low bargaining power. Komatsu: Ryoichi Kawai's Leadership has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ryoichi Kawai to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Ryoichi Kawai 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Komatsu: Ryoichi Kawai's Leadership firm has clearly differentiated products in the market place. This has enabled Ryoichi Kawai to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ryoichi Kawai to invest into research and development (R&D) and innovation.
Training and development
– Ryoichi Kawai has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Komatsu: Ryoichi Kawai's Leadership 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.
High switching costs
– The high switching costs that Ryoichi Kawai 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.
Weaknesses Komatsu: Ryoichi Kawai's Leadership | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Komatsu: Ryoichi Kawai's Leadership are -
Low market penetration in new markets
– Outside its home market of Ryoichi Kawai, firm in the HBR case study Komatsu: Ryoichi Kawai's Leadership needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Ryoichi Kawai 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 - Komatsu: Ryoichi Kawai's Leadership should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Ryoichi Kawai products
– To increase the profitability and margins on the products, Ryoichi Kawai needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Komatsu: Ryoichi Kawai's Leadership, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Komatsu: Ryoichi Kawai's Leadership HBR case study mentions - Ryoichi Kawai 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ryoichi Kawai 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 Komatsu: Ryoichi Kawai's Leadership 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 Ryoichi Kawai 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Komatsu: Ryoichi Kawai's Leadership 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 Komatsu: Ryoichi Kawai's Leadership can leverage the sales team experience to cultivate customer relationships as Ryoichi Kawai is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Ryoichi Kawai has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Ryoichi Kawai 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher A. Bartlett suggests that, Ryoichi Kawai 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.
Opportunities Komatsu: Ryoichi Kawai's Leadership | 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 Komatsu: Ryoichi Kawai's Leadership are -
Building a culture of innovation
– managers at Ryoichi Kawai 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 Leadership & Managing People segment.
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 Ryoichi Kawai in the consumer business. Now Ryoichi Kawai can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ryoichi Kawai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ryoichi Kawai 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ryoichi Kawai 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 Ryoichi Kawai to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ryoichi Kawai in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Buying journey improvements
– Ryoichi Kawai can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Komatsu: Ryoichi Kawai's Leadership 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.
Manufacturing automation
– Ryoichi Kawai can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Loyalty marketing
– Ryoichi Kawai has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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. Ryoichi Kawai 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. Ryoichi Kawai 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. Ryoichi Kawai 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, Ryoichi Kawai is facing challenges because of the dominance of functional experts in the organization. Komatsu: Ryoichi Kawai's Leadership 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.
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 Ryoichi Kawai 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.
Threats Komatsu: Ryoichi Kawai's Leadership External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Komatsu: Ryoichi Kawai's Leadership are -
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.
Regulatory challenges
– Ryoichi Kawai 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 Leadership & Managing People industry regulations.
Consumer confidence and its impact on Ryoichi Kawai 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ryoichi Kawai with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ryoichi Kawai 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 disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Ryoichi Kawai
– 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 Ryoichi Kawai.
High dependence on third party suppliers
– Ryoichi Kawai 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.
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. Ryoichi Kawai can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Komatsu: Ryoichi Kawai's Leadership, Ryoichi Kawai may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Ryoichi Kawai in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Ryoichi Kawai 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ryoichi Kawai 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 Komatsu: Ryoichi Kawai's Leadership .
Weighted SWOT Analysis of Komatsu: Ryoichi Kawai's Leadership 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 Komatsu: Ryoichi Kawai's Leadership 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 Komatsu: Ryoichi Kawai's Leadership 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 Komatsu: Ryoichi Kawai's Leadership 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 Komatsu: Ryoichi Kawai's Leadership 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 Ryoichi Kawai needs to make to build a sustainable competitive advantage.
