Kusuri No Aoki Holdings Co Ltd (3549) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Drugs)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Kusuri No Aoki Holdings Co Ltd (Japan)
Based on various researches at Oak Spring University , Kusuri No Aoki Holdings Co Ltd is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of Kusuri No Aoki Holdings Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kusuri No Aoki Holdings Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kusuri No Aoki Holdings Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co Ltd can be done for the following purposes –
1. Strategic planning of Kusuri No Aoki Holdings Co Ltd
2. Improving business portfolio management of Kusuri No Aoki Holdings Co Ltd
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 Kusuri No Aoki Holdings Co Ltd
Strengths of Kusuri No Aoki Holdings Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kusuri No Aoki Holdings Co Ltd are -
Operational resilience
– The operational resilience strategy of Kusuri No Aoki Holdings Co Ltd 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.
Ability to lead change in Retail (Drugs)
– Kusuri No Aoki Holdings Co Ltd is one of the leading players in the Retail (Drugs) industry in Japan. Over the years it has not only transformed the business landscape in the Retail (Drugs) industry in Japan but also across the existing markets. The ability to lead change has enabled Kusuri No Aoki Holdings Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Kusuri No Aoki Holdings Co Ltd 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.
Highly skilled collaborators
– Kusuri No Aoki Holdings Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Kusuri No Aoki Holdings Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Kusuri No Aoki Holdings Co Ltd in the Services sector have low bargaining power. Kusuri No Aoki Holdings Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kusuri No Aoki Holdings Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Kusuri No Aoki Holdings Co Ltd is one of the most innovative firm in Retail (Drugs) sector.
Sustainable margins compare to other players in Retail (Drugs) industry
– Kusuri No Aoki Holdings Co Ltd has clearly differentiated products in the market place. This has enabled Kusuri No Aoki Holdings Co Ltd to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Kusuri No Aoki Holdings Co Ltd to invest into research and development (R&D) and innovation.
High brand equity
– Kusuri No Aoki Holdings Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kusuri No Aoki Holdings Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Kusuri No Aoki Holdings Co Ltd 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.
Ability to recruit top talent
– Kusuri No Aoki Holdings Co Ltd is one of the leading players in the Retail (Drugs) 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.
Effective Research and Development (R&D)
– Kusuri No Aoki Holdings Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kusuri No Aoki Holdings Co Ltd 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.
Successful track record of launching new products
– Kusuri No Aoki Holdings Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kusuri No Aoki Holdings Co Ltd 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.
Weaknesses of Kusuri No Aoki Holdings Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kusuri No Aoki Holdings Co Ltd are -
Aligning sales with marketing
– From the outside it seems that Kusuri No Aoki Holdings Co Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Kusuri No Aoki Holdings Co Ltd can leverage the sales team experience to cultivate customer relationships as Kusuri No Aoki Holdings Co Ltd is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Kusuri No Aoki Holdings Co Ltd, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Kusuri No Aoki Holdings Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Kusuri No Aoki Holdings Co Ltd 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.
Compensation and incentives
– The revenue per employee of Kusuri No Aoki Holdings Co Ltd 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.
Low market penetration in new markets
– Outside its home market of Japan, Kusuri No Aoki Holdings Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Kusuri No Aoki Holdings Co Ltd is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but Kusuri No Aoki Holdings Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kusuri No Aoki Holdings Co Ltd to focus more on services in the Retail (Drugs) industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Kusuri No Aoki Holdings Co Ltd has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Retail (Drugs) industry using digital technology.
Products dominated business model
– Even though Kusuri No Aoki Holdings Co Ltd 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. Kusuri No Aoki Holdings Co Ltd should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Kusuri No Aoki Holdings Co Ltd 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.
High dependence on Kusuri No Aoki Holdings Co Ltd ‘s star products
– The top 2 products and services of Kusuri No Aoki Holdings Co Ltd still accounts for major business revenue. This dependence on star products in Retail (Drugs) industry has resulted into insufficient focus on developing new products, even though Kusuri No Aoki Holdings Co Ltd has relatively successful track record of launching new products.
High bargaining power of channel partners in Retail (Drugs) industry
– because of the regulatory requirements in Japan, Kusuri No Aoki Holdings Co Ltd 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.
Kusuri No Aoki Holdings Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kusuri No Aoki Holdings Co Ltd are -
Creating value in data economy
– The success of analytics program of Kusuri No Aoki Holdings Co Ltd has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Kusuri No Aoki Holdings Co Ltd to build a more holistic ecosystem for Kusuri No Aoki Holdings Co Ltd products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Kusuri No Aoki Holdings Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kusuri No Aoki Holdings Co 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 Retail (Drugs) industry, and it will provide faster access to the consumers.
Loyalty marketing
– Kusuri No Aoki Holdings Co Ltd 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.
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 Kusuri No Aoki Holdings Co Ltd in the Retail (Drugs) industry. Now Kusuri No Aoki Holdings Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kusuri No Aoki Holdings Co Ltd 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.
Using analytics as competitive advantage
– Kusuri No Aoki Holdings Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Drugs) sector. This continuous investment in analytics has enabled Kusuri No Aoki Holdings Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kusuri No Aoki Holdings Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Kusuri No Aoki Holdings Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Kusuri No Aoki Holdings Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Retail (Drugs) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kusuri No Aoki Holdings Co Ltd can use these opportunities to build new business models that can help the communities that Kusuri No Aoki Holdings Co Ltd operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Better consumer reach
– The expansion of the 5G network will help Kusuri No Aoki Holdings Co Ltd to increase its market reach. Kusuri No Aoki Holdings Co 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.
Developing new processes and practices
– Kusuri No Aoki Holdings Co Ltd can develop new processes and procedures in Retail (Drugs) 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.
Threats Kusuri No Aoki Holdings Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kusuri No Aoki Holdings Co Ltd are -
Shortening product life cycle
– it is one of the major threat that Kusuri No Aoki Holdings Co Ltd is facing in Retail (Drugs) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Kusuri No Aoki Holdings Co 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kusuri No Aoki Holdings Co 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 Retail (Drugs) 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. Kusuri No Aoki Holdings Co 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.
Stagnating economy with rate increase
– Kusuri No Aoki Holdings Co Ltd 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 Retail (Drugs) industry.
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 Kusuri No Aoki Holdings Co Ltd.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kusuri No Aoki Holdings Co Ltd 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.
Easy access to finance
– Easy access to finance in Retail (Drugs) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kusuri No Aoki Holdings Co Ltd 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. Kusuri No Aoki Holdings Co Ltd needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
Regulatory challenges
– Kusuri No Aoki Holdings Co Ltd 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.
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 Kusuri No Aoki Holdings Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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 Kusuri No Aoki Holdings Co Ltd in the Retail (Drugs) sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Kusuri No Aoki Holdings Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co 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 Kusuri No Aoki Holdings Co Ltd needs to make to build a sustainable competitive advantage.