SWOT Analysis / TOWS Matrix for Fukuyama Transporting (Japan)
Based on various researches at Oak Spring University , Fukuyama Transporting is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing commodity prices, there is backlash against globalization, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Fukuyama Transporting
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fukuyama Transporting can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fukuyama Transporting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fukuyama Transporting 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 Fukuyama Transporting can be done for the following purposes –
1. Strategic planning of Fukuyama Transporting
2. Improving business portfolio management of Fukuyama Transporting
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 Fukuyama Transporting
Strengths of Fukuyama Transporting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fukuyama Transporting are -
Successful track record of launching new products
– Fukuyama Transporting has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fukuyama Transporting 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.
Cross disciplinary teams
– Horizontal connected teams at the Fukuyama Transporting 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.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For Fukuyama Transporting digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fukuyama Transporting 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 Trucking industry
– Fukuyama Transporting has clearly differentiated products in the market place. This has enabled Fukuyama Transporting to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped Fukuyama Transporting to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Fukuyama Transporting comprises – understanding the underlying the factors in the Trucking 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.
Effective Research and Development (R&D)
– Fukuyama Transporting has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Fukuyama Transporting 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.
Strong track record of project management in the Trucking industry
– Fukuyama Transporting is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Fukuyama Transporting in the Transportation sector have low bargaining power. Fukuyama Transporting has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fukuyama Transporting to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Fukuyama Transporting 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.
Superior customer experience
– The customer experience strategy of Fukuyama Transporting in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Fukuyama Transporting is one of the most innovative firm in Trucking sector.
Ability to recruit top talent
– Fukuyama Transporting 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.
Weaknesses of Fukuyama Transporting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fukuyama Transporting are -
Compensation and incentives
– The revenue per employee of Fukuyama Transporting 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.
High bargaining power of channel partners in Trucking industry
– because of the regulatory requirements in Japan, Fukuyama Transporting 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 Trucking industry.
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, Fukuyama Transporting 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.
Low market penetration in new markets
– Outside its home market of Japan, Fukuyama Transporting needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Fukuyama Transporting 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 Fukuyama Transporting lucrative customers.
Products dominated business model
– Even though Fukuyama Transporting 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. Fukuyama Transporting should strive to include more intangible value offerings along with its core products and services.
High dependence on Fukuyama Transporting ‘s star products
– The top 2 products and services of Fukuyama Transporting 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 Fukuyama Transporting has relatively successful track record of launching new products.
Need for greater diversity
– Fukuyama Transporting 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.
Ability to respond to the competition
– As the decision making is very deliberative at Fukuyama Transporting, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. Fukuyama Transporting has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Fukuyama Transporting is one of the leading players in the Trucking industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Trucking industry in last five years.
High cash cycle compare to competitors
Fukuyama Transporting has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Fukuyama Transporting Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Fukuyama Transporting are -
Creating value in data economy
– The success of analytics program of Fukuyama Transporting has opened avenues for new revenue streams for the organization in Trucking industry. This can help Fukuyama Transporting to build a more holistic ecosystem for Fukuyama Transporting products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Fukuyama Transporting 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 Fukuyama Transporting to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fukuyama Transporting to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Fukuyama Transporting can develop new processes and procedures in Trucking 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fukuyama Transporting is facing challenges because of the dominance of functional experts in the organization. Fukuyama Transporting can utilize new technology in the field of Trucking industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Fukuyama Transporting 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.
Loyalty marketing
– Fukuyama Transporting 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 Fukuyama Transporting 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fukuyama Transporting 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. Fukuyama Transporting 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.
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. Fukuyama Transporting can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Fukuyama Transporting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fukuyama Transporting 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 Fukuyama Transporting to hire the very best people irrespective of their geographical location.
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 Fukuyama Transporting in the Trucking industry. Now Fukuyama Transporting can target international markets with far fewer capital restrictions requirements than the existing system.
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. Fukuyama Transporting can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Fukuyama Transporting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Fukuyama Transporting are -
High dependence on third party suppliers
– Fukuyama Transporting 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.
Shortening product life cycle
– it is one of the major threat that Fukuyama Transporting is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Fukuyama Transporting 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. Fukuyama Transporting can take advantage of this fund but it will also bring new competitors in the Trucking industry.
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.
Stagnating economy with rate increase
– Fukuyama Transporting 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 Trucking 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 Fukuyama Transporting in the Trucking sector and impact the bottomline of the organization.
Regulatory challenges
– Fukuyama Transporting 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 Trucking industry regulations.
Technology acceleration in Forth Industrial Revolution
– Fukuyama Transporting has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Fukuyama Transporting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Fukuyama Transporting with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
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. Fukuyama Transporting 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.
Increasing wage structure of Fukuyama Transporting
– 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 Fukuyama Transporting.
Consumer confidence and its impact on Fukuyama Transporting 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.
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 Fukuyama Transporting.
Weighted SWOT Analysis of Fukuyama Transporting Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fukuyama Transporting 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 Fukuyama Transporting 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 Fukuyama Transporting 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 Fukuyama Transporting 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 Fukuyama Transporting needs to make to build a sustainable competitive advantage.