SWOT Analysis / TOWS Matrix for Kobayashi Pharmaceutical (Japan)
Based on various researches at Oak Spring University , Kobayashi Pharmaceutical is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Kobayashi Pharmaceutical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kobayashi Pharmaceutical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kobayashi Pharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical can be done for the following purposes –
1. Strategic planning of Kobayashi Pharmaceutical
2. Improving business portfolio management of Kobayashi Pharmaceutical
3. Assessing feasibility of the new initiative in Japan
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kobayashi Pharmaceutical
Strengths of Kobayashi Pharmaceutical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kobayashi Pharmaceutical are -
Highly skilled collaborators
– Kobayashi Pharmaceutical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Major Drugs industry. Secondly the value chain collaborators of Kobayashi Pharmaceutical have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kobayashi Pharmaceutical emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Kobayashi Pharmaceutical in the Healthcare sector have low bargaining power. Kobayashi Pharmaceutical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kobayashi Pharmaceutical to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Kobayashi Pharmaceutical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kobayashi Pharmaceutical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Kobayashi Pharmaceutical is one of the leading players in the Major Drugs 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.
Organizational Resilience of Kobayashi Pharmaceutical
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kobayashi Pharmaceutical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Major Drugs
– Kobayashi Pharmaceutical is one of the leading players in the Major Drugs industry in Japan. Over the years it has not only transformed the business landscape in the Major Drugs industry in Japan but also across the existing markets. The ability to lead change has enabled Kobayashi Pharmaceutical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Major Drugs industry
– Kobayashi Pharmaceutical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Kobayashi Pharmaceutical is present in almost all the verticals within the Major Drugs industry. This has provided Kobayashi Pharmaceutical 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.
Sustainable margins compare to other players in Major Drugs industry
– Kobayashi Pharmaceutical has clearly differentiated products in the market place. This has enabled Kobayashi Pharmaceutical to fetch slight price premium compare to the competitors in the Major Drugs industry. The sustainable margins have also helped Kobayashi Pharmaceutical to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Kobayashi Pharmaceutical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kobayashi Pharmaceutical staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Kobayashi Pharmaceutical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kobayashi Pharmaceutical 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.
Weaknesses of Kobayashi Pharmaceutical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kobayashi Pharmaceutical are -
Compensation and incentives
– The revenue per employee of Kobayashi Pharmaceutical is just above the Major Drugs 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 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 Kobayashi Pharmaceutical supply chain. Even after few cautionary changes, Kobayashi Pharmaceutical is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kobayashi Pharmaceutical vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Kobayashi Pharmaceutical 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 Major Drugs industry using digital technology.
Low market penetration in new markets
– Outside its home market of Japan, Kobayashi Pharmaceutical needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Major Drugs industry
– because of the regulatory requirements in Japan, Kobayashi Pharmaceutical 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 Major Drugs industry.
Workers concerns about automation
– As automation is fast increasing in the Major Drugs industry, Kobayashi Pharmaceutical 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.
Interest costs
– Compare to the competition, Kobayashi Pharmaceutical 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.
No frontier risks strategy
– From the 10K / annual statement of Kobayashi Pharmaceutical, it seems that company is thinking out the frontier risks that can impact Major Drugs 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 Kobayashi Pharmaceutical is one of the leading players in the Major Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Major Drugs industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kobayashi Pharmaceutical is slow explore the new channels of communication. These new channels of communication can help Kobayashi Pharmaceutical to provide better information regarding Major Drugs products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Kobayashi Pharmaceutical products
– To increase the profitability and margins on the products, Kobayashi Pharmaceutical needs to provide more differentiated products than what it is currently offering in the marketplace.
Kobayashi Pharmaceutical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kobayashi Pharmaceutical are -
Building a culture of innovation
– managers at Kobayashi Pharmaceutical 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 Major Drugs industry.
Learning at scale
– Online learning technologies has now opened space for Kobayashi Pharmaceutical 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.
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. Kobayashi Pharmaceutical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Kobayashi Pharmaceutical 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kobayashi Pharmaceutical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Major Drugs industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Major Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kobayashi Pharmaceutical 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. Kobayashi Pharmaceutical 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Major Drugs industry, but it has also influenced the consumer preferences. Kobayashi Pharmaceutical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Kobayashi Pharmaceutical can develop new processes and procedures in Major Drugs 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.
Creating value in data economy
– The success of analytics program of Kobayashi Pharmaceutical has opened avenues for new revenue streams for the organization in Major Drugs industry. This can help Kobayashi Pharmaceutical to build a more holistic ecosystem for Kobayashi Pharmaceutical products in the Major Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kobayashi Pharmaceutical is facing challenges because of the dominance of functional experts in the organization. Kobayashi Pharmaceutical can utilize new technology in the field of Major Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Kobayashi Pharmaceutical can use the latest technology developments to improve its manufacturing and designing process in Major Drugs 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.
Better consumer reach
– The expansion of the 5G network will help Kobayashi Pharmaceutical to increase its market reach. Kobayashi Pharmaceutical 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.
Buying journey improvements
– Kobayashi Pharmaceutical can improve the customer journey of consumers in the Major Drugs 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 Kobayashi Pharmaceutical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kobayashi Pharmaceutical are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kobayashi Pharmaceutical in Major Drugs industry. The Major Drugs 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kobayashi Pharmaceutical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Major Drugs sector.
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. Kobayashi Pharmaceutical 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.
Environmental challenges
– Kobayashi Pharmaceutical 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. Kobayashi Pharmaceutical can take advantage of this fund but it will also bring new competitors in the Major Drugs industry.
Consumer confidence and its impact on Kobayashi Pharmaceutical 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 Major Drugs industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Kobayashi Pharmaceutical has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, Kobayashi Pharmaceutical needs to keep up with the evolution of technology in the Major Drugs sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Kobayashi Pharmaceutical 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 Major Drugs industry regulations.
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.
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 Kobayashi Pharmaceutical in the Major Drugs sector and impact the bottomline of the organization.
Increasing wage structure of Kobayashi Pharmaceutical
– 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 Kobayashi Pharmaceutical.
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 Kobayashi Pharmaceutical business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Kobayashi Pharmaceutical 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 Major Drugs industry.
Weighted SWOT Analysis of Kobayashi Pharmaceutical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical 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 Kobayashi Pharmaceutical needs to make to build a sustainable competitive advantage.