SWOT Analysis / TOWS Matrix for Ryohin Keikaku Ltd (Japan)
Based on various researches at Oak Spring University , Ryohin Keikaku Ltd is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Ryohin Keikaku Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ryohin Keikaku Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ryohin Keikaku Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd can be done for the following purposes –
1. Strategic planning of Ryohin Keikaku Ltd
2. Improving business portfolio management of Ryohin Keikaku Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ryohin Keikaku Ltd
Strengths of Ryohin Keikaku Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ryohin Keikaku Ltd are -
Diverse revenue streams
– Ryohin Keikaku Ltd is present in almost all the verticals within the Retail (Department & Discount) industry. This has provided Ryohin Keikaku Ltd 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 switching costs
– The high switching costs that Ryohin Keikaku Ltd 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
– Ryohin Keikaku Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Department & Discount) industry. Secondly the value chain collaborators of Ryohin Keikaku Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ryohin Keikaku Ltd in the Services sector have low bargaining power. Ryohin Keikaku Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ryohin Keikaku Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– Ryohin Keikaku Ltd has clearly differentiated products in the market place. This has enabled Ryohin Keikaku Ltd to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped Ryohin Keikaku Ltd to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ryohin Keikaku Ltd 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.
Ability to recruit top talent
– Ryohin Keikaku Ltd is one of the leading players in the Retail (Department & Discount) 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.
Superior customer experience
– The customer experience strategy of Ryohin Keikaku Ltd in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Retail (Department & Discount) industry
– Ryohin Keikaku Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Ryohin Keikaku Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ryohin Keikaku Ltd 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.
Learning organization
- Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ryohin Keikaku Ltd emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Ryohin Keikaku Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ryohin Keikaku Ltd staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Ryohin Keikaku Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ryohin Keikaku Ltd are -
High dependence on Ryohin Keikaku Ltd ‘s star products
– The top 2 products and services of Ryohin Keikaku Ltd still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though Ryohin Keikaku Ltd has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Ryohin Keikaku Ltd 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 Retail (Department & Discount) industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Ryohin Keikaku Ltd, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. Ryohin Keikaku Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Ryohin Keikaku Ltd is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but Ryohin Keikaku Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ryohin Keikaku Ltd to focus more on services in the Retail (Department & Discount) industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Ryohin Keikaku Ltd 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.
Low market penetration in new markets
– Outside its home market of Japan, Ryohin Keikaku Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Ryohin Keikaku Ltd has a high cash cycle compare to other players in the Retail (Department & Discount) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Ryohin Keikaku Ltd has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ryohin Keikaku Ltd should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Ryohin Keikaku Ltd is one of the leading players in the Retail (Department & Discount) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Department & Discount) industry in last five years.
Aligning sales with marketing
– From the outside it seems that Ryohin Keikaku Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at Ryohin Keikaku Ltd can leverage the sales team experience to cultivate customer relationships as Ryohin Keikaku Ltd is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Ryohin Keikaku Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Department & Discount) industry over the last five years. Ryohin Keikaku Ltd 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.
Ryohin Keikaku Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ryohin Keikaku Ltd are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Ryohin Keikaku Ltd 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, Ryohin Keikaku Ltd is facing challenges because of the dominance of functional experts in the organization. Ryohin Keikaku Ltd can utilize new technology in the field of Retail (Department & Discount) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Ryohin Keikaku Ltd to increase its market reach. Ryohin Keikaku Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ryohin Keikaku Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Ryohin Keikaku Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled Ryohin Keikaku Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ryohin Keikaku Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Ryohin Keikaku Ltd can improve the customer journey of consumers in the Retail (Department & Discount) 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.
Leveraging digital technologies
– Ryohin Keikaku Ltd 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ryohin Keikaku Ltd can use these opportunities to build new business models that can help the communities that Ryohin Keikaku Ltd operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Retail (Department & Discount) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ryohin Keikaku Ltd in the Retail (Department & Discount) industry. Now Ryohin Keikaku Ltd 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 Retail (Department & Discount) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ryohin Keikaku Ltd 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. Ryohin Keikaku Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ryohin Keikaku Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Department & Discount) industry, and it will provide faster access to the consumers.
Threats Ryohin Keikaku Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ryohin Keikaku Ltd are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ryohin Keikaku Ltd in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Ryohin Keikaku Ltd has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, Ryohin Keikaku Ltd needs to keep up with the evolution of technology in the Retail (Department & Discount) 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ryohin Keikaku Ltd in Retail (Department & Discount) industry. The Retail (Department & Discount) 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.
Increasing wage structure of Ryohin Keikaku Ltd
– 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 Ryohin Keikaku Ltd.
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 Ryohin Keikaku Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Ryohin Keikaku Ltd is facing in Retail (Department & Discount) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ryohin Keikaku Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Department & Discount) sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents Ryohin Keikaku Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
Consumer confidence and its impact on Ryohin Keikaku Ltd 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 Retail (Department & Discount) industry and other sectors.
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.
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. Ryohin Keikaku Ltd needs to understand the core reasons impacting the Retail (Department & Discount) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Ryohin Keikaku Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd 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 Ryohin Keikaku Ltd needs to make to build a sustainable competitive advantage.
