SWOT Analysis / TOWS Matrix for Kintetsu Corp (Japan)
Based on various researches at Oak Spring University , Kintetsu Corp is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kintetsu Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kintetsu Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kintetsu Corp 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 Kintetsu Corp can be done for the following purposes –
1. Strategic planning of Kintetsu Corp
2. Improving business portfolio management of Kintetsu Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kintetsu Corp
Strengths of Kintetsu Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kintetsu Corp are -
Effective Research and Development (R&D)
– Kintetsu Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kintetsu Corp staying ahead in the Misc. Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Misc. Transportation industry
– Kintetsu Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Kintetsu Corp in Misc. Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Kintetsu Corp 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 Misc. Transportation 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.
Ability to lead change in Misc. Transportation
– Kintetsu Corp is one of the leading players in the Misc. Transportation industry in Japan. Over the years it has not only transformed the business landscape in the Misc. Transportation industry in Japan but also across the existing markets. The ability to lead change has enabled Kintetsu Corp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Kintetsu Corp in the Transportation sector have low bargaining power. Kintetsu Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kintetsu Corp to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Kintetsu Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Transportation industry. Secondly the value chain collaborators of Kintetsu Corp have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Kintetsu Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kintetsu Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Kintetsu Corp 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.
Successful track record of launching new products
– Kintetsu Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kintetsu Corp 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 Kintetsu Corp comprises – understanding the underlying the factors in the Misc. Transportation 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.
Diverse revenue streams
– Kintetsu Corp is present in almost all the verticals within the Misc. Transportation industry. This has provided Kintetsu Corp 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.
Weaknesses of Kintetsu Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kintetsu Corp are -
Ability to respond to the competition
– As the decision making is very deliberative at Kintetsu Corp, in the dynamic environment of Misc. Transportation industry it has struggled to respond to the nimble upstart competition. Kintetsu Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kintetsu Corp is slow explore the new channels of communication. These new channels of communication can help Kintetsu Corp to provide better information regarding Misc. Transportation products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Misc. Transportation industry, Kintetsu Corp 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.
Compensation and incentives
– The revenue per employee of Kintetsu Corp is just above the Misc. Transportation industry average. It 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.
High dependence on Kintetsu Corp ‘s star products
– The top 2 products and services of Kintetsu Corp still accounts for major business revenue. This dependence on star products in Misc. Transportation industry has resulted into insufficient focus on developing new products, even though Kintetsu Corp has relatively successful track record of launching new products.
Lack of clear differentiation of Kintetsu Corp products
– To increase the profitability and margins on the products, Kintetsu Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Kintetsu Corp has some of the most successful models in the Misc. Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kintetsu Corp should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Kintetsu Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Transportation industry have deep experience in developing customer relationships. Marketing department at Kintetsu Corp can leverage the sales team experience to cultivate customer relationships as Kintetsu Corp is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Kintetsu Corp, it seems that company is thinking out the frontier risks that can impact Misc. Transportation 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.
Slow to strategic competitive environment developments
– As Kintetsu Corp is one of the leading players in the Misc. Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Transportation industry in last five years.
High operating costs
– Compare to the competitors, Kintetsu Corp has high operating costs in the Misc. Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kintetsu Corp lucrative customers.
Kintetsu Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kintetsu Corp are -
Using analytics as competitive advantage
– Kintetsu Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Transportation sector. This continuous investment in analytics has enabled Kintetsu Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kintetsu Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Kintetsu Corp 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 Misc. Transportation industry.
Learning at scale
– Online learning technologies has now opened space for Kintetsu Corp 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.
Manufacturing automation
– Kintetsu Corp can use the latest technology developments to improve its manufacturing and designing process in Misc. Transportation 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.
Developing new processes and practices
– Kintetsu Corp can develop new processes and procedures in Misc. Transportation 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kintetsu Corp in the Misc. Transportation industry. Now Kintetsu Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Kintetsu Corp can improve the customer journey of consumers in the Misc. Transportation 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Transportation industry, but it has also influenced the consumer preferences. Kintetsu Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kintetsu Corp 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, Kintetsu Corp 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kintetsu Corp is facing challenges because of the dominance of functional experts in the organization. Kintetsu Corp can utilize new technology in the field of Misc. Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Kintetsu Corp has opened avenues for new revenue streams for the organization in Misc. Transportation industry. This can help Kintetsu Corp to build a more holistic ecosystem for Kintetsu Corp products in the Misc. Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Kintetsu Corp to increase its market reach. Kintetsu Corp 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.
Threats Kintetsu Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kintetsu Corp 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kintetsu Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation sector.
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.
Regulatory challenges
– Kintetsu Corp 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 Misc. Transportation industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kintetsu Corp 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 Kintetsu Corp prominent markets.
Consumer confidence and its impact on Kintetsu Corp 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 Misc. Transportation industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Kintetsu Corp has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, Kintetsu Corp needs to keep up with the evolution of technology in the Misc. Transportation 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kintetsu Corp.
Shortening product life cycle
– it is one of the major threat that Kintetsu Corp is facing in Misc. Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Kintetsu Corp 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 Misc. Transportation 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 Kintetsu Corp in the Misc. Transportation sector and impact the bottomline of the organization.
Environmental challenges
– Kintetsu Corp 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. Kintetsu Corp can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Transportation industry are lowering. It can presents Kintetsu Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Transportation sector.
Weighted SWOT Analysis of Kintetsu Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kintetsu Corp 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 Kintetsu Corp 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 Kintetsu Corp 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 Kintetsu Corp 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 Kintetsu Corp needs to make to build a sustainable competitive advantage.