Based on various researches at Oak Spring University , Hankyu Hanshin Holdings Inc is operating in a macro-environment that has been destablized by – increasing commodity prices, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Hankyu Hanshin Holdings Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hankyu Hanshin Holdings Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hankyu Hanshin Holdings Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings Inc can be done for the following purposes –
1. Strategic planning of Hankyu Hanshin Holdings Inc
2. Improving business portfolio management of Hankyu Hanshin Holdings Inc
3. Assessing feasibility of the new initiative in Japan
4. Making a Railroads sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hankyu Hanshin Holdings Inc
Strengths of Hankyu Hanshin Holdings Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hankyu Hanshin Holdings Inc are -
Sustainable margins compare to other players in Railroads industry
– Hankyu Hanshin Holdings Inc has clearly differentiated products in the market place. This has enabled Hankyu Hanshin Holdings Inc to fetch slight price premium compare to the competitors in the Railroads industry. The sustainable margins have also helped Hankyu Hanshin Holdings Inc to invest into research and development (R&D) and innovation.
Strong track record of project management in the Railroads industry
– Hankyu Hanshin Holdings Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Hankyu Hanshin Holdings Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hankyu Hanshin Holdings Inc staying ahead in the Railroads industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Railroads industry
- digital transformation varies from industry to industry. For Hankyu Hanshin Holdings Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hankyu Hanshin Holdings 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.
Successful track record of launching new products
– Hankyu Hanshin Holdings Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hankyu Hanshin Holdings 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.
Operational resilience
– The operational resilience strategy of Hankyu Hanshin Holdings Inc comprises – understanding the underlying the factors in the Railroads 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
– Hankyu Hanshin Holdings Inc is one of the most innovative firm in Railroads sector.
Highly skilled collaborators
– Hankyu Hanshin Holdings Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Railroads industry. Secondly the value chain collaborators of Hankyu Hanshin Holdings Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Hankyu Hanshin Holdings Inc in Railroads industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Hankyu Hanshin Holdings Inc is present in almost all the verticals within the Railroads industry. This has provided Hankyu Hanshin Holdings 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.
High brand equity
– Hankyu Hanshin Holdings Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hankyu Hanshin Holdings Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Hankyu Hanshin Holdings Inc has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses of Hankyu Hanshin Holdings Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hankyu Hanshin Holdings Inc are -
High dependence on Hankyu Hanshin Holdings Inc ‘s star products
– The top 2 products and services of Hankyu Hanshin Holdings Inc still accounts for major business revenue. This dependence on star products in Railroads industry has resulted into insufficient focus on developing new products, even though Hankyu Hanshin Holdings Inc has relatively successful track record of launching new products.
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 Hankyu Hanshin Holdings Inc supply chain. Even after few cautionary changes, Hankyu Hanshin Holdings Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hankyu Hanshin Holdings Inc vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Hankyu Hanshin Holdings Inc is one of the leading players in the Railroads industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Railroads industry in last five years.
Aligning sales with marketing
– From the outside it seems that Hankyu Hanshin Holdings Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Railroads industry have deep experience in developing customer relationships. Marketing department at Hankyu Hanshin Holdings Inc can leverage the sales team experience to cultivate customer relationships as Hankyu Hanshin Holdings Inc is planning to shift buying processes online.
Need for greater diversity
– Hankyu Hanshin Holdings 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.
Slow decision making process
– As mentioned earlier in the report, Hankyu Hanshin Holdings Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Railroads industry over the last five years. Hankyu Hanshin Holdings Inc even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Hankyu Hanshin Holdings Inc 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.
Employees’ less understanding of Hankyu Hanshin Holdings Inc strategy
– From the outside it seems that the employees of Hankyu Hanshin Holdings 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.
No frontier risks strategy
– From the 10K / annual statement of Hankyu Hanshin Holdings Inc, it seems that company is thinking out the frontier risks that can impact Railroads industry. 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.
Products dominated business model
– Even though Hankyu Hanshin Holdings Inc has some of the most successful models in the Railroads industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hankyu Hanshin Holdings Inc should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hankyu Hanshin Holdings Inc is slow explore the new channels of communication. These new channels of communication can help Hankyu Hanshin Holdings Inc to provide better information regarding Railroads products and services. It can also build an online community to further reach out to potential customers.
Hankyu Hanshin Holdings Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hankyu Hanshin Holdings Inc are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hankyu Hanshin Holdings 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 Railroads 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 Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings Inc to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Hankyu Hanshin Holdings Inc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hankyu Hanshin Holdings Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Hankyu Hanshin Holdings Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Railroads sector. This continuous investment in analytics has enabled Hankyu Hanshin Holdings Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hankyu Hanshin Holdings Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Railroads industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hankyu Hanshin Holdings Inc in the Railroads industry. Now Hankyu Hanshin Holdings Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Railroads industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hankyu Hanshin Holdings 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. Hankyu Hanshin Holdings 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.
Building a culture of innovation
– managers at Hankyu Hanshin Holdings Inc 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 Railroads industry.
Learning at scale
– Online learning technologies has now opened space for Hankyu Hanshin Holdings 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.
Better consumer reach
– The expansion of the 5G network will help Hankyu Hanshin Holdings Inc to increase its market reach. Hankyu Hanshin Holdings 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hankyu Hanshin Holdings Inc can use these opportunities to build new business models that can help the communities that Hankyu Hanshin Holdings Inc operates in. Secondly it can use opportunities from government spending in Railroads sector.
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. Hankyu Hanshin Holdings Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Hankyu Hanshin Holdings Inc can improve the customer journey of consumers in the Railroads 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.
Threats Hankyu Hanshin Holdings Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hankyu Hanshin Holdings Inc are -
Increasing wage structure of Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings Inc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Railroads industry are lowering. It can presents Hankyu Hanshin Holdings Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Railroads sector.
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. Hankyu Hanshin Holdings Inc needs to understand the core reasons impacting the Railroads industry. This will help it in building a better workplace.
Environmental challenges
– Hankyu Hanshin Holdings Inc 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. Hankyu Hanshin Holdings Inc can take advantage of this fund but it will also bring new competitors in the Railroads industry.
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 Hankyu Hanshin Holdings Inc in the Railroads sector and impact the bottomline of the organization.
Regulatory challenges
– Hankyu Hanshin Holdings 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 Railroads industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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 Hankyu Hanshin Holdings Inc business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hankyu Hanshin Holdings 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 Railroads sector.
Technology acceleration in Forth Industrial Revolution
– Hankyu Hanshin Holdings Inc has witnessed rapid integration of technology during Covid-19 in the Railroads industry. As one of the leading players in the industry, Hankyu Hanshin Holdings Inc needs to keep up with the evolution of technology in the Railroads 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.
High dependence on third party suppliers
– Hankyu Hanshin Holdings Inc 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 Railroads industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hankyu Hanshin Holdings Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Hankyu Hanshin Holdings Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings 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 Hankyu Hanshin Holdings Inc needs to make to build a sustainable competitive advantage.