MatsumotoKiyoshi Holdings Co (3088) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for MatsumotoKiyoshi Holdings Co (Japan)

Based on various researches at Oak Spring University , MatsumotoKiyoshi Holdings Co is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, there is backlash against globalization, etc

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Introduction to SWOT Analysis of MatsumotoKiyoshi Holdings Co

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MatsumotoKiyoshi Holdings Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MatsumotoKiyoshi Holdings Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MatsumotoKiyoshi Holdings Co 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 MatsumotoKiyoshi Holdings Co can be done for the following purposes –
1. Strategic planning of MatsumotoKiyoshi Holdings Co
2. Improving business portfolio management of MatsumotoKiyoshi Holdings Co
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 MatsumotoKiyoshi Holdings Co

Strengths of MatsumotoKiyoshi Holdings Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of MatsumotoKiyoshi Holdings Co are -

Diverse revenue streams

– MatsumotoKiyoshi Holdings Co is present in almost all the verticals within the Retail (Drugs) industry. This has provided MatsumotoKiyoshi Holdings Co 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.

High brand equity

– MatsumotoKiyoshi Holdings Co has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled MatsumotoKiyoshi Holdings Co to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Cross disciplinary teams

– Horizontal connected teams at the MatsumotoKiyoshi Holdings Co 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.

Low bargaining power of suppliers

– Suppliers of MatsumotoKiyoshi Holdings Co in the Services sector have low bargaining power. MatsumotoKiyoshi Holdings Co has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MatsumotoKiyoshi Holdings Co to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy of MatsumotoKiyoshi Holdings Co 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.

Strong track record of project management in the Retail (Drugs) industry

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

Innovation driven organization

– MatsumotoKiyoshi Holdings Co is one of the most innovative firm in Retail (Drugs) sector.

Superior customer experience

– The customer experience strategy of MatsumotoKiyoshi Holdings Co in Retail (Drugs) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Learning organization

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

Training and development

– MatsumotoKiyoshi Holdings Co 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.

Digital Transformation in Retail (Drugs) industry

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

Effective Research and Development (R&D)

– MatsumotoKiyoshi Holdings Co has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – MatsumotoKiyoshi Holdings Co 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.

Weaknesses of MatsumotoKiyoshi Holdings Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of MatsumotoKiyoshi Holdings Co are -

No frontier risks strategy

– From the 10K / annual statement of MatsumotoKiyoshi Holdings Co, it seems that company is thinking out the frontier risks that can impact Retail (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.

High cash cycle compare to competitors

MatsumotoKiyoshi Holdings Co 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MatsumotoKiyoshi Holdings Co is slow explore the new channels of communication. These new channels of communication can help MatsumotoKiyoshi Holdings Co to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.

Compensation and incentives

– The revenue per employee of MatsumotoKiyoshi Holdings Co 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.

Workers concerns about automation

– As automation is fast increasing in the Retail (Drugs) industry, MatsumotoKiyoshi Holdings Co 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.

Slow to strategic competitive environment developments

– As MatsumotoKiyoshi Holdings Co is one of the leading players in the Retail (Drugs) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Drugs) industry in last five years.

Products dominated business model

– Even though MatsumotoKiyoshi Holdings Co has some of the most successful models in the Retail (Drugs) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. MatsumotoKiyoshi Holdings Co should strive to include more intangible value offerings along with its core products and services.

Slow decision making process

– As mentioned earlier in the report, MatsumotoKiyoshi Holdings Co 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. MatsumotoKiyoshi Holdings Co 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 MatsumotoKiyoshi Holdings Co supply chain. Even after few cautionary changes, MatsumotoKiyoshi Holdings Co is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left MatsumotoKiyoshi Holdings Co vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, MatsumotoKiyoshi Holdings Co 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.

High bargaining power of channel partners in Retail (Drugs) industry

– because of the regulatory requirements in Japan, MatsumotoKiyoshi Holdings Co 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 Retail (Drugs) industry.

MatsumotoKiyoshi Holdings Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of MatsumotoKiyoshi Holdings Co are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Retail (Drugs) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. MatsumotoKiyoshi Holdings Co 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. MatsumotoKiyoshi Holdings Co 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, MatsumotoKiyoshi Holdings Co 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 MatsumotoKiyoshi Holdings Co to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Buying journey improvements

– MatsumotoKiyoshi Holdings Co 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.

Remote work and new talent hiring opportunities

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

Low interest rates

– Even though inflation is raising its head in most developed economies, MatsumotoKiyoshi Holdings Co can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Better consumer reach

– The expansion of the 5G network will help MatsumotoKiyoshi Holdings Co to increase its market reach. MatsumotoKiyoshi Holdings Co 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.

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 MatsumotoKiyoshi Holdings Co to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. MatsumotoKiyoshi Holdings Co can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, MatsumotoKiyoshi Holdings Co is facing challenges because of the dominance of functional experts in the organization. MatsumotoKiyoshi Holdings Co 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.

Leveraging digital technologies

– MatsumotoKiyoshi Holdings Co 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, MatsumotoKiyoshi Holdings Co can use these opportunities to build new business models that can help the communities that MatsumotoKiyoshi Holdings Co operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.

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 MatsumotoKiyoshi Holdings Co in the Retail (Drugs) industry. Now MatsumotoKiyoshi Holdings Co can target international markets with far fewer capital restrictions requirements than the existing system.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Retail (Drugs) industry, but it has also influenced the consumer preferences. MatsumotoKiyoshi Holdings Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Threats MatsumotoKiyoshi Holdings Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of MatsumotoKiyoshi Holdings Co are -

Environmental challenges

– MatsumotoKiyoshi Holdings Co 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. MatsumotoKiyoshi Holdings Co can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.

High dependence on third party suppliers

– MatsumotoKiyoshi Holdings Co 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, MatsumotoKiyoshi Holdings Co 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.

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 MatsumotoKiyoshi Holdings Co in the Retail (Drugs) sector and impact the bottomline of the organization.

Regulatory challenges

– MatsumotoKiyoshi Holdings Co 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.

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. MatsumotoKiyoshi Holdings Co 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.

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.

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 MatsumotoKiyoshi Holdings Co business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents MatsumotoKiyoshi Holdings Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.

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 MatsumotoKiyoshi Holdings Co.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for MatsumotoKiyoshi Holdings Co in Retail (Drugs) industry. The Retail (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.

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. MatsumotoKiyoshi Holdings Co needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, MatsumotoKiyoshi Holdings Co 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 MatsumotoKiyoshi Holdings Co prominent markets.

Weighted SWOT Analysis of MatsumotoKiyoshi Holdings Co Template, Example

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

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