SWOT Analysis / TOWS Matrix for Tsuruha Holdings Inc (Japan)
Based on various researches at Oak Spring University , Tsuruha Holdings Inc is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Tsuruha Holdings Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tsuruha Holdings Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tsuruha Holdings Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tsuruha Holdings Inc operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tsuruha Holdings Inc can be done for the following purposes –
1. Strategic planning of Tsuruha Holdings Inc
2. Improving business portfolio management of Tsuruha Holdings Inc
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tsuruha Holdings Inc
Strengths of Tsuruha Holdings Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tsuruha Holdings Inc are -
Learning organization
- Tsuruha Holdings Inc 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 Tsuruha Holdings Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Tsuruha Holdings Inc emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Tsuruha Holdings Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tsuruha Holdings Inc staying ahead in the Retail (Drugs) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Tsuruha Holdings Inc comprises – understanding the underlying the factors in the Retail (Drugs) 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.
Successful track record of launching new products
– Tsuruha Holdings Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tsuruha Holdings Inc has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Tsuruha Holdings Inc 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.
Low bargaining power of suppliers
– Suppliers of Tsuruha Holdings Inc in the Services sector have low bargaining power. Tsuruha Holdings Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tsuruha Holdings Inc to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Retail (Drugs) industry
– Tsuruha Holdings Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Retail (Drugs) industry
– Tsuruha Holdings Inc has clearly differentiated products in the market place. This has enabled Tsuruha Holdings Inc to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Tsuruha Holdings Inc to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Tsuruha Holdings Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Tsuruha Holdings Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Tsuruha Holdings Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tsuruha Holdings Inc has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Retail (Drugs)
– Tsuruha Holdings Inc is one of the leading players in the Retail (Drugs) industry in Japan. Over the years it has not only transformed the business landscape in the Retail (Drugs) industry in Japan but also across the existing markets. The ability to lead change has enabled Tsuruha Holdings Inc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Tsuruha Holdings Inc has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses of Tsuruha Holdings Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tsuruha Holdings Inc are -
High cash cycle compare to competitors
Tsuruha Holdings Inc has a high cash cycle compare to other players in the Retail (Drugs) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Tsuruha Holdings Inc is just above the Retail (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.
Lack of clear differentiation of Tsuruha Holdings Inc products
– To increase the profitability and margins on the products, Tsuruha Holdings Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Tsuruha Holdings Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Drugs) industry over the last five years. Tsuruha Holdings Inc even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 Tsuruha Holdings Inc supply chain. Even after few cautionary changes, Tsuruha Holdings Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tsuruha Holdings Inc vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Tsuruha Holdings Inc has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Tsuruha Holdings Inc is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but Tsuruha Holdings Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tsuruha Holdings Inc to focus more on services in the Retail (Drugs) industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Tsuruha Holdings Inc, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Tsuruha Holdings Inc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Retail (Drugs) industry
– The stress on hiring functional specialists at Tsuruha Holdings Inc has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on Tsuruha Holdings Inc ‘s star products
– The top 2 products and services of Tsuruha Holdings Inc still accounts for major business revenue. This dependence on star products in Retail (Drugs) industry has resulted into insufficient focus on developing new products, even though Tsuruha Holdings Inc has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tsuruha Holdings Inc is slow explore the new channels of communication. These new channels of communication can help Tsuruha Holdings Inc to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
Tsuruha Holdings Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tsuruha Holdings Inc are -
Building a culture of innovation
– managers at Tsuruha Holdings Inc can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Retail (Drugs) industry.
Leveraging digital technologies
– Tsuruha Holdings Inc 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tsuruha Holdings Inc to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tsuruha Holdings Inc to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tsuruha Holdings Inc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Drugs) industry, and it will provide faster access to the consumers.
Manufacturing automation
– Tsuruha Holdings Inc can use the latest technology developments to improve its manufacturing and designing process in Retail (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.
Creating value in data economy
– The success of analytics program of Tsuruha Holdings Inc has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Tsuruha Holdings Inc to build a more holistic ecosystem for Tsuruha Holdings Inc products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tsuruha Holdings Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Retail (Drugs) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tsuruha Holdings Inc in the Retail (Drugs) industry. Now Tsuruha Holdings Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Tsuruha Holdings Inc to increase its market reach. Tsuruha Holdings Inc will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tsuruha Holdings Inc is facing challenges because of the dominance of functional experts in the organization. Tsuruha Holdings Inc can utilize new technology in the field of Retail (Drugs) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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, Tsuruha Holdings Inc can use these opportunities to build new business models that can help the communities that Tsuruha Holdings Inc operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Loyalty marketing
– Tsuruha Holdings Inc has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Tsuruha Holdings Inc can improve the customer journey of consumers in the Retail (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 Tsuruha Holdings Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tsuruha Holdings Inc are -
Shortening product life cycle
– it is one of the major threat that Tsuruha Holdings Inc is facing in Retail (Drugs) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tsuruha Holdings Inc 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 Tsuruha Holdings Inc prominent markets.
High dependence on third party suppliers
– Tsuruha Holdings Inc high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 Tsuruha Holdings Inc in the Retail (Drugs) sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Tsuruha Holdings Inc 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 Retail (Drugs) industry.
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. Tsuruha Holdings Inc needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
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.
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 Tsuruha Holdings Inc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tsuruha Holdings Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Drugs) sector.
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.
Increasing wage structure of Tsuruha Holdings Inc
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Tsuruha Holdings Inc.
Regulatory challenges
– Tsuruha Holdings Inc needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Retail (Drugs) industry regulations.
Consumer confidence and its impact on Tsuruha Holdings Inc 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 (Drugs) industry and other sectors.
Weighted SWOT Analysis of Tsuruha Holdings Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tsuruha Holdings Inc needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Tsuruha Holdings Inc is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Tsuruha Holdings Inc is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tsuruha Holdings Inc to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tsuruha Holdings Inc needs to make to build a sustainable competitive advantage.