Hoshizaki Electric (6465) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hoshizaki Electric (Japan)

Based on various researches at Oak Spring University , Hoshizaki Electric is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, technology disruption, etc

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Introduction to SWOT Analysis of Hoshizaki Electric

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hoshizaki Electric can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hoshizaki Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hoshizaki Electric 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Hoshizaki Electric can be done for the following purposes –
1. Strategic planning of Hoshizaki Electric
2. Improving business portfolio management of Hoshizaki Electric
3. Assessing feasibility of the new initiative in Japan
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hoshizaki Electric

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Strengths of Hoshizaki Electric | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hoshizaki Electric are -

Learning organization

- Hoshizaki Electric 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 Hoshizaki Electric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hoshizaki Electric emphasize – knowledge, initiative, and innovation.

Training and development

– Hoshizaki Electric has one of the best training and development program in Consumer Cyclical 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.

Highly skilled collaborators

– Hoshizaki Electric has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Hoshizaki Electric have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Hoshizaki Electric has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hoshizaki Electric staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Hoshizaki Electric is present in almost all the verticals within the Appliance & Tool industry. This has provided Hoshizaki Electric 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

– Hoshizaki Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hoshizaki Electric 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.

Strong track record of project management in the Appliance & Tool industry

– Hoshizaki Electric is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Organizational Resilience of Hoshizaki Electric

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

Ability to lead change in Appliance & Tool

– Hoshizaki Electric is one of the leading players in the Appliance & Tool industry in Japan. Over the years it has not only transformed the business landscape in the Appliance & Tool industry in Japan but also across the existing markets. The ability to lead change has enabled Hoshizaki Electric in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Digital Transformation in Appliance & Tool industry

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

Operational resilience

– The operational resilience strategy of Hoshizaki Electric comprises – understanding the underlying the factors in the Appliance & Tool 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.

Superior customer experience

– The customer experience strategy of Hoshizaki Electric in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of Hoshizaki Electric | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hoshizaki Electric are -

Increasing silos among functional specialists

– The organizational structure of Hoshizaki Electric is dominated by functional specialists. It is not different from other players in the Appliance & Tool industry, but Hoshizaki Electric needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hoshizaki Electric to focus more on services in the Appliance & Tool industry rather than just following the product oriented approach.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hoshizaki Electric is slow explore the new channels of communication. These new channels of communication can help Hoshizaki Electric to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.

Need for greater diversity

– Hoshizaki Electric 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.

No frontier risks strategy

– From the 10K / annual statement of Hoshizaki Electric, it seems that company is thinking out the frontier risks that can impact Appliance & Tool 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.

Interest costs

– Compare to the competition, Hoshizaki Electric 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.

Slow decision making process

– As mentioned earlier in the report, Hoshizaki Electric has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Appliance & Tool industry over the last five years. Hoshizaki Electric 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.

Slow to strategic competitive environment developments

– As Hoshizaki Electric is one of the leading players in the Appliance & Tool industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Appliance & Tool industry in last five years.

Products dominated business model

– Even though Hoshizaki Electric has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hoshizaki Electric should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Hoshizaki Electric products

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

Capital Spending Reduction

– Even during the low interest decade, Hoshizaki Electric 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 Appliance & Tool industry using digital technology.

High bargaining power of channel partners in Appliance & Tool industry

– because of the regulatory requirements in Japan, Hoshizaki Electric is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Appliance & Tool industry.

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Hoshizaki Electric Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hoshizaki Electric are -

Creating value in data economy

– The success of analytics program of Hoshizaki Electric has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help Hoshizaki Electric to build a more holistic ecosystem for Hoshizaki Electric products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Hoshizaki Electric can use the latest technology developments to improve its manufacturing and designing process in Appliance & Tool 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hoshizaki Electric can use these opportunities to build new business models that can help the communities that Hoshizaki Electric operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.

Use of Bitcoin and other crypto currencies for transactions in Appliance & Tool industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hoshizaki Electric in the Appliance & Tool industry. Now Hoshizaki Electric can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

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

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Hoshizaki Electric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Hoshizaki Electric can develop new processes and procedures in Appliance & Tool 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.

Leveraging digital technologies

– Hoshizaki Electric 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Hoshizaki Electric 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Hoshizaki Electric in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Appliance & Tool industry, and it will provide faster access to the consumers.

Building a culture of innovation

– managers at Hoshizaki Electric 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 Appliance & Tool industry.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hoshizaki Electric to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

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. Hoshizaki Electric can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Hoshizaki Electric External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hoshizaki Electric are -

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 Hoshizaki Electric business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Hoshizaki Electric

– 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 Hoshizaki Electric.

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. Hoshizaki Electric 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.

Regulatory challenges

– Hoshizaki Electric 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 Appliance & Tool industry regulations.

Technology acceleration in Forth Industrial Revolution

– Hoshizaki Electric has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Hoshizaki Electric needs to keep up with the evolution of technology in the Appliance & Tool 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, Hoshizaki Electric 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 Hoshizaki Electric prominent markets.

Easy access to finance

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

Stagnating economy with rate increase

– Hoshizaki Electric 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 Appliance & Tool industry.

Consumer confidence and its impact on Hoshizaki Electric 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 Appliance & Tool industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hoshizaki Electric may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Appliance & Tool sector.

Environmental challenges

– Hoshizaki Electric 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. Hoshizaki Electric can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.

Shortening product life cycle

– it is one of the major threat that Hoshizaki Electric is facing in Appliance & Tool sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents Hoshizaki Electric with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.

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Weighted SWOT Analysis of Hoshizaki Electric Template, Example

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

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