Hitachi Transport Sys Ltd (9086) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hitachi Transport Sys Ltd (Japan)
Based on various researches at Oak Spring University , Hitachi Transport Sys Ltd is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, 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, increasing commodity prices, etc
Introduction to SWOT Analysis of Hitachi Transport Sys Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hitachi Transport Sys Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hitachi Transport Sys Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd can be done for the following purposes –
1. Strategic planning of Hitachi Transport Sys Ltd
2. Improving business portfolio management of Hitachi Transport Sys Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hitachi Transport Sys Ltd
Strengths of Hitachi Transport Sys Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hitachi Transport Sys Ltd are -
Highly skilled collaborators
– Hitachi Transport Sys Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Hitachi Transport Sys Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Trucking
– Hitachi Transport Sys Ltd is one of the leading players in the Trucking industry in Japan. Over the years it has not only transformed the business landscape in the Trucking industry in Japan but also across the existing markets. The ability to lead change has enabled Hitachi Transport Sys Ltd 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)
– Hitachi Transport Sys Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hitachi Transport Sys Ltd staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For Hitachi Transport Sys Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hitachi Transport Sys Ltd 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.
Learning organization
- Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hitachi Transport Sys Ltd emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Hitachi Transport Sys Ltd is one of the leading players in the Trucking industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Hitachi Transport Sys Ltd in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Hitachi Transport Sys Ltd has one of the best training and development program in Transportation 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.
High switching costs
– The high switching costs that Hitachi Transport Sys Ltd 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.
Diverse revenue streams
– Hitachi Transport Sys Ltd is present in almost all the verticals within the Trucking industry. This has provided Hitachi Transport Sys Ltd 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.
Organizational Resilience of Hitachi Transport Sys Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hitachi Transport Sys Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Hitachi Transport Sys Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hitachi Transport Sys Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Hitachi Transport Sys Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hitachi Transport Sys Ltd are -
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Hitachi Transport Sys Ltd 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.
Increasing silos among functional specialists
– The organizational structure of Hitachi Transport Sys Ltd is dominated by functional specialists. It is not different from other players in the Trucking industry, but Hitachi Transport Sys Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hitachi Transport Sys Ltd to focus more on services in the Trucking industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Hitachi Transport Sys Ltd, it seems that company is thinking out the frontier risks that can impact Trucking industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hitachi Transport Sys Ltd is slow explore the new channels of communication. These new channels of communication can help Hitachi Transport Sys Ltd to provide better information regarding Trucking 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 Hitachi Transport Sys Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Trucking industry have deep experience in developing customer relationships. Marketing department at Hitachi Transport Sys Ltd can leverage the sales team experience to cultivate customer relationships as Hitachi Transport Sys Ltd is planning to shift buying processes online.
Products dominated business model
– Even though Hitachi Transport Sys Ltd has some of the most successful models in the Trucking industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hitachi Transport Sys Ltd should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Japan, Hitachi Transport Sys Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Hitachi Transport Sys Ltd has high operating costs in the Trucking industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hitachi Transport Sys Ltd lucrative customers.
Compensation and incentives
– The revenue per employee of Hitachi Transport Sys Ltd is just above the Trucking 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.
Interest costs
– Compare to the competition, Hitachi Transport Sys Ltd 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 dependence on Hitachi Transport Sys Ltd ‘s star products
– The top 2 products and services of Hitachi Transport Sys Ltd still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though Hitachi Transport Sys Ltd has relatively successful track record of launching new products.
Hitachi Transport Sys Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hitachi Transport Sys Ltd are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hitachi Transport Sys Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Hitachi Transport Sys Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled Hitachi Transport Sys Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hitachi Transport Sys Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Hitachi Transport Sys Ltd to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Hitachi Transport Sys Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hitachi Transport Sys Ltd in the Trucking industry. Now Hitachi Transport Sys Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Hitachi Transport Sys Ltd has opened avenues for new revenue streams for the organization in Trucking industry. This can help Hitachi Transport Sys Ltd to build a more holistic ecosystem for Hitachi Transport Sys Ltd products in the Trucking 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 Hitachi Transport Sys Ltd to increase its market reach. Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Hitachi Transport Sys Ltd 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, Hitachi Transport Sys Ltd can use these opportunities to build new business models that can help the communities that Hitachi Transport Sys Ltd operates in. Secondly it can use opportunities from government spending in Trucking sector.
Manufacturing automation
– Hitachi Transport Sys Ltd can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.
Threats Hitachi Transport Sys Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hitachi Transport Sys Ltd are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Hitachi Transport Sys Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hitachi Transport Sys Ltd in Trucking industry. The Trucking 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.
Environmental challenges
– Hitachi Transport Sys Ltd 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. Hitachi Transport Sys Ltd can take advantage of this fund but it will also bring new competitors in the Trucking industry.
Consumer confidence and its impact on Hitachi Transport Sys Ltd 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 Trucking industry and other sectors.
High dependence on third party suppliers
– Hitachi Transport Sys Ltd 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.
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 Hitachi Transport Sys Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Hitachi Transport Sys Ltd is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hitachi Transport Sys Ltd in the Trucking sector and impact the bottomline of the organization.
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. Hitachi Transport Sys Ltd 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hitachi Transport Sys Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Technology acceleration in Forth Industrial Revolution
– Hitachi Transport Sys Ltd has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Hitachi Transport Sys Ltd needs to keep up with the evolution of technology in the Trucking 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.
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. Hitachi Transport Sys Ltd needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Hitachi Transport Sys Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd 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 Hitachi Transport Sys Ltd needs to make to build a sustainable competitive advantage.