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Daiwa Securities Group Inc. (8601) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Daiwa Securities Group Inc. (Japan)


Based on various researches at Oak Spring University , Daiwa Securities Group Inc. is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc



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Introduction to SWOT Analysis of Daiwa Securities Group Inc.


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daiwa Securities Group Inc. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daiwa Securities Group Inc., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. can be done for the following purposes –
1. Strategic planning of Daiwa Securities Group Inc.
2. Improving business portfolio management of Daiwa Securities Group Inc.
3. Assessing feasibility of the new initiative in Japan
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daiwa Securities Group Inc.




Strengths of Daiwa Securities Group Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Daiwa Securities Group Inc. are -

Learning organization

- Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daiwa Securities Group Inc. emphasize – knowledge, initiative, and innovation.

Analytics focus

– Daiwa Securities Group Inc. 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 Investment Services industry. The technology infrastructure of Japan is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Low bargaining power of suppliers

– Suppliers of Daiwa Securities Group Inc. in the Financial sector have low bargaining power. Daiwa Securities Group Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daiwa Securities Group Inc. to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Daiwa Securities Group Inc. is one of the leading players in the Investment Services industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.

Cross disciplinary teams

– Horizontal connected teams at the Daiwa Securities Group Inc. 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.

Effective Research and Development (R&D)

– Daiwa Securities Group Inc. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daiwa Securities Group Inc. staying ahead in the Investment Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Daiwa Securities Group Inc. is present in almost all the verticals within the Investment Services industry. This has provided Daiwa Securities Group Inc. 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.

Successful track record of launching new products

– Daiwa Securities Group Inc. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daiwa Securities Group Inc. 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.

High switching costs

– The high switching costs that Daiwa Securities Group Inc. 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.

Highly skilled collaborators

– Daiwa Securities Group Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Investment Services industry. Secondly the value chain collaborators of Daiwa Securities Group Inc. have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in Investment Services industry

- digital transformation varies from industry to industry. For Daiwa Securities Group Inc. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daiwa Securities Group Inc. 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.

Organizational Resilience of Daiwa Securities Group Inc.

– The covid-19 pandemic has put organizational resilience at the centre of everthing Daiwa Securities Group Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.






Weaknesses of Daiwa Securities Group Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Daiwa Securities Group Inc. are -

Need for greater diversity

– Daiwa Securities Group Inc. 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.

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 Daiwa Securities Group Inc. supply chain. Even after few cautionary changes, Daiwa Securities Group Inc. is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daiwa Securities Group Inc. vulnerable to further global disruptions in South East Asia.

Employees’ less understanding of Daiwa Securities Group Inc. strategy

– From the outside it seems that the employees of Daiwa Securities Group Inc. don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Low market penetration in new markets

– Outside its home market of Japan, Daiwa Securities Group Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Workers concerns about automation

– As automation is fast increasing in the Investment Services industry, Daiwa Securities Group Inc. 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.

Slow to strategic competitive environment developments

– As Daiwa Securities Group Inc. is one of the leading players in the Investment Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Investment Services industry in last five years.

Ability to respond to the competition

– As the decision making is very deliberative at Daiwa Securities Group Inc., in the dynamic environment of Investment Services industry it has struggled to respond to the nimble upstart competition. Daiwa Securities Group Inc. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Aligning sales with marketing

– From the outside it seems that Daiwa Securities Group Inc. needs to have more collaboration between its sales team and marketing team. Sales professionals in the Investment Services industry have deep experience in developing customer relationships. Marketing department at Daiwa Securities Group Inc. can leverage the sales team experience to cultivate customer relationships as Daiwa Securities Group Inc. is planning to shift buying processes online.

Lack of clear differentiation of Daiwa Securities Group Inc. products

– To increase the profitability and margins on the products, Daiwa Securities Group Inc. needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daiwa Securities Group Inc. is slow explore the new channels of communication. These new channels of communication can help Daiwa Securities Group Inc. to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring in Investment Services industry

– The stress on hiring functional specialists at Daiwa Securities Group Inc. 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.




Daiwa Securities Group Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Daiwa Securities Group Inc. are -

Learning at scale

– Online learning technologies has now opened space for Daiwa Securities Group Inc. 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.

Leveraging digital technologies

– Daiwa Securities Group Inc. 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Developing new processes and practices

– Daiwa Securities Group Inc. can develop new processes and procedures in Investment Services 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.

Better consumer reach

– The expansion of the 5G network will help Daiwa Securities Group Inc. to increase its market reach. Daiwa Securities Group Inc. 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daiwa Securities Group Inc. 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. Daiwa Securities Group Inc. 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.

Buying journey improvements

– Daiwa Securities Group Inc. can improve the customer journey of consumers in the Investment Services industry by using analytics and artificial intelligence. It 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.

Creating value in data economy

– The success of analytics program of Daiwa Securities Group Inc. has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Daiwa Securities Group Inc. to build a more holistic ecosystem for Daiwa Securities Group Inc. products in the Investment Services industry by providing – 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 Investment Services industry, but it has also influenced the consumer preferences. Daiwa Securities Group Inc. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Manufacturing automation

– Daiwa Securities Group Inc. can use the latest technology developments to improve its manufacturing and designing process in Investment Services sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Use of Bitcoin and other crypto currencies for transactions in Investment Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daiwa Securities Group Inc. in the Investment Services industry. Now Daiwa Securities Group Inc. can target international markets with far fewer capital restrictions requirements than the existing system.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Daiwa Securities Group Inc. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Investment Services industry, and it will provide faster access to the consumers.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. to hire the very best people irrespective of their geographical location.




Threats Daiwa Securities Group Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Daiwa Securities Group Inc. are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. prominent markets.

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. Daiwa Securities Group Inc. 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.

Technology acceleration in Forth Industrial Revolution

– Daiwa Securities Group Inc. has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Daiwa Securities Group Inc. needs to keep up with the evolution of technology in the Investment Services 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.

Regulatory challenges

– Daiwa Securities Group Inc. 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 Investment Services industry regulations.

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 Daiwa Securities Group Inc. business can come under increasing regulations regarding data privacy, data security, 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. Daiwa Securities Group Inc. needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.

Increasing wage structure of Daiwa Securities Group Inc.

– 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 Daiwa Securities Group Inc..

Easy access to finance

– Easy access to finance in Investment Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daiwa Securities Group Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Daiwa Securities Group Inc. in Investment Services industry. The Investment Services 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents Daiwa Securities Group Inc. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Investment Services sector.

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 Daiwa Securities Group Inc. in the Investment Services sector and impact the bottomline of the organization.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Daiwa Securities Group Inc. may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Investment Services sector.




Weighted SWOT Analysis of Daiwa Securities Group Inc. Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. 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 Daiwa Securities Group Inc. needs to make to build a sustainable competitive advantage.



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