SWOT Analysis / TOWS Matrix for GMO Payment Gateway (Japan)
Based on various researches at Oak Spring University , GMO Payment Gateway is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of GMO Payment Gateway
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that GMO Payment Gateway can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the GMO Payment Gateway, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which GMO Payment Gateway 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 GMO Payment Gateway can be done for the following purposes –
1. Strategic planning of GMO Payment Gateway
2. Improving business portfolio management of GMO Payment Gateway
3. Assessing feasibility of the new initiative in Japan
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of GMO Payment Gateway
Strengths of GMO Payment Gateway | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of GMO Payment Gateway are -
Learning organization
- GMO Payment Gateway 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 GMO Payment Gateway is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at GMO Payment Gateway emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the GMO Payment Gateway 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.
High brand equity
– GMO Payment Gateway has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled GMO Payment Gateway to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– GMO Payment Gateway has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. GMO Payment Gateway 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.
Ability to lead change in Business Services
– GMO Payment Gateway is one of the leading players in the Business Services industry in Japan. Over the years it has not only transformed the business landscape in the Business Services industry in Japan but also across the existing markets. The ability to lead change has enabled GMO Payment Gateway in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– GMO Payment Gateway has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of GMO Payment Gateway have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– GMO Payment Gateway is one of the most innovative firm in Business Services sector.
Organizational Resilience of GMO Payment Gateway
– The covid-19 pandemic has put organizational resilience at the centre of everthing GMO Payment Gateway does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of GMO Payment Gateway comprises – understanding the underlying the factors in the Business Services 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.
Low bargaining power of suppliers
– Suppliers of GMO Payment Gateway in the Services sector have low bargaining power. GMO Payment Gateway has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps GMO Payment Gateway to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– GMO Payment Gateway is present in almost all the verticals within the Business Services industry. This has provided GMO Payment Gateway 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 Business Services industry
– GMO Payment Gateway has clearly differentiated products in the market place. This has enabled GMO Payment Gateway to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped GMO Payment Gateway to invest into research and development (R&D) and innovation.
Weaknesses of GMO Payment Gateway | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GMO Payment Gateway are -
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 GMO Payment Gateway supply chain. Even after few cautionary changes, GMO Payment Gateway is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left GMO Payment Gateway vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though GMO Payment Gateway has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. GMO Payment Gateway should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As GMO Payment Gateway is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
High dependence on GMO Payment Gateway ‘s star products
– The top 2 products and services of GMO Payment Gateway still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though GMO Payment Gateway has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at GMO Payment Gateway, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. GMO Payment Gateway has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that GMO Payment Gateway needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at GMO Payment Gateway can leverage the sales team experience to cultivate customer relationships as GMO Payment Gateway is planning to shift buying processes online.
High cash cycle compare to competitors
GMO Payment Gateway has a high cash cycle compare to other players in the Business Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in Japan, GMO Payment Gateway 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 Business Services industry.
Workers concerns about automation
– As automation is fast increasing in the Business Services industry, GMO Payment Gateway 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.
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at GMO Payment Gateway 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.
Low market penetration in new markets
– Outside its home market of Japan, GMO Payment Gateway needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
GMO Payment Gateway Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of GMO Payment Gateway are -
Leveraging digital technologies
– GMO Payment Gateway 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.
Better consumer reach
– The expansion of the 5G network will help GMO Payment Gateway to increase its market reach. GMO Payment Gateway 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. GMO Payment Gateway 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. GMO Payment Gateway 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.
Creating value in data economy
– The success of analytics program of GMO Payment Gateway has opened avenues for new revenue streams for the organization in Business Services industry. This can help GMO Payment Gateway to build a more holistic ecosystem for GMO Payment Gateway products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, 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, GMO Payment Gateway can use these opportunities to build new business models that can help the communities that GMO Payment Gateway operates in. Secondly it can use opportunities from government spending in Business Services sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for GMO Payment Gateway in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for GMO Payment Gateway in the Business Services industry. Now GMO Payment Gateway can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at GMO Payment Gateway 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 Business Services industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for GMO Payment Gateway 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 GMO Payment Gateway to hire the very best people irrespective of their geographical location.
Loyalty marketing
– GMO Payment Gateway 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.
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 GMO Payment Gateway 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, GMO Payment Gateway is facing challenges because of the dominance of functional experts in the organization. GMO Payment Gateway can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. GMO Payment Gateway can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats GMO Payment Gateway External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of GMO Payment Gateway are -
High dependence on third party suppliers
– GMO Payment Gateway 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.
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. GMO Payment Gateway needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for GMO Payment Gateway in Business Services industry. The Business Services 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.
Technology acceleration in Forth Industrial Revolution
– GMO Payment Gateway has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, GMO Payment Gateway needs to keep up with the evolution of technology in the Business Services 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.
Consumer confidence and its impact on GMO Payment Gateway 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 Business Services industry and other sectors.
Increasing wage structure of GMO Payment Gateway
– 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 GMO Payment Gateway.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents GMO Payment Gateway with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.
Regulatory challenges
– GMO Payment Gateway 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 Business Services industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, GMO Payment Gateway may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, GMO Payment Gateway 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 GMO Payment Gateway prominent markets.
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. GMO Payment Gateway 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
– GMO Payment Gateway 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. GMO Payment Gateway can take advantage of this fund but it will also bring new competitors in the Business Services industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for GMO Payment Gateway in the Business Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of GMO Payment Gateway Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at GMO Payment Gateway 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 GMO Payment Gateway 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 GMO Payment Gateway 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 GMO Payment Gateway 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 GMO Payment Gateway needs to make to build a sustainable competitive advantage.