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 – talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
High switching costs
– The high switching costs that GMO Payment Gateway 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.
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.
Effective Research and Development (R&D)
– GMO Payment Gateway has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – GMO Payment Gateway staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For GMO Payment Gateway digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. GMO Payment Gateway 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.
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.
Training and development
– GMO Payment Gateway 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.
Strong track record of project management in the Business Services industry
– GMO Payment Gateway is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
Interest costs
– Compare to the competition, GMO Payment Gateway has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Japan, GMO Payment Gateway needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Need for greater diversity
– GMO Payment Gateway 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.
Employees’ less understanding of GMO Payment Gateway strategy
– From the outside it seems that the employees of GMO Payment Gateway don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– From the 10K / annual statement of GMO Payment Gateway, it seems that company is thinking out the frontier risks that can impact Business Services 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.
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.
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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, GMO Payment Gateway is slow explore the new channels of communication. These new channels of communication can help GMO Payment Gateway to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, GMO Payment Gateway can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help GMO Payment Gateway to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Developing new processes and practices
– GMO Payment Gateway can develop new processes and procedures in Business Services 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.
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.
Using analytics as competitive advantage
– GMO Payment Gateway has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled GMO Payment Gateway to build a competitive advantage using analytics. The analytics driven competitive advantage can help GMO Payment Gateway to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– GMO Payment Gateway can improve the customer journey of consumers in the Business Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects GMO Payment Gateway can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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 -
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 GMO Payment Gateway.
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 GMO Payment Gateway business can come under increasing regulations regarding data privacy, data security, etc.
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.
Stagnating economy with rate increase
– GMO Payment Gateway 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 Business Services industry.
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.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. GMO Payment Gateway can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
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.
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.