SWOT Analysis / TOWS Matrix for Heiwa Corp (Japan)
Based on various researches at Oak Spring University , Heiwa Corp is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Heiwa Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heiwa Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heiwa Corp 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 Heiwa Corp can be done for the following purposes –
1. Strategic planning of Heiwa Corp
2. Improving business portfolio management of Heiwa Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Casinos & Gaming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Heiwa Corp
Strengths of Heiwa Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heiwa Corp are -
Training and development
– Heiwa Corp 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.
Organizational Resilience of Heiwa Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Heiwa Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Heiwa Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Heiwa Corp staying ahead in the Casinos & Gaming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Casinos & Gaming industry
– Heiwa Corp has clearly differentiated products in the market place. This has enabled Heiwa Corp to fetch slight price premium compare to the competitors in the Casinos & Gaming industry. The sustainable margins have also helped Heiwa Corp to invest into research and development (R&D) and innovation.
Ability to lead change in Casinos & Gaming
– Heiwa Corp is one of the leading players in the Casinos & Gaming industry in Japan. Over the years it has not only transformed the business landscape in the Casinos & Gaming industry in Japan but also across the existing markets. The ability to lead change has enabled Heiwa Corp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Heiwa Corp is present in almost all the verticals within the Casinos & Gaming industry. This has provided Heiwa Corp 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 switching costs
– The high switching costs that Heiwa Corp 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.
Learning organization
- Heiwa Corp 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 Heiwa Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Heiwa Corp emphasize – knowledge, initiative, and innovation.
High brand equity
– Heiwa Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Heiwa Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Heiwa Corp in the Services sector have low bargaining power. Heiwa Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Heiwa Corp to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Heiwa Corp is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Casinos & Gaming industry. The technology infrastructure of Japan is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Heiwa Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Casinos & Gaming industry. Secondly the value chain collaborators of Heiwa Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Heiwa Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Heiwa Corp are -
High cash cycle compare to competitors
Heiwa Corp has a high cash cycle compare to other players in the Casinos & Gaming industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– From the 10K / annual statement of Heiwa Corp, it seems that company is thinking out the frontier risks that can impact Casinos & Gaming 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.
Workers concerns about automation
– As automation is fast increasing in the Casinos & Gaming industry, Heiwa Corp 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.
Aligning sales with marketing
– From the outside it seems that Heiwa Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Casinos & Gaming industry have deep experience in developing customer relationships. Marketing department at Heiwa Corp can leverage the sales team experience to cultivate customer relationships as Heiwa Corp is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Japan, Heiwa Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Heiwa Corp 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 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 Heiwa Corp supply chain. Even after few cautionary changes, Heiwa Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Heiwa Corp vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Heiwa Corp has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Casinos & Gaming industry over the last five years. Heiwa Corp 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 operating costs
– Compare to the competitors, Heiwa Corp has high operating costs in the Casinos & Gaming industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Heiwa Corp lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Heiwa Corp, in the dynamic environment of Casinos & Gaming industry it has struggled to respond to the nimble upstart competition. Heiwa Corp 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 Heiwa Corp is one of the leading players in the Casinos & Gaming industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Casinos & Gaming industry in last five years.
Heiwa Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Heiwa Corp are -
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 Heiwa Corp 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.
Using analytics as competitive advantage
– Heiwa Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Casinos & Gaming sector. This continuous investment in analytics has enabled Heiwa Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Heiwa Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Heiwa Corp can improve the customer journey of consumers in the Casinos & Gaming 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Heiwa Corp 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 Heiwa Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Casinos & Gaming industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Heiwa Corp in the Casinos & Gaming industry. Now Heiwa Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Heiwa Corp can use these opportunities to build new business models that can help the communities that Heiwa Corp operates in. Secondly it can use opportunities from government spending in Casinos & Gaming sector.
Developing new processes and practices
– Heiwa Corp can develop new processes and procedures in Casinos & Gaming 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.
Building a culture of innovation
– managers at Heiwa Corp can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Casinos & Gaming industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Heiwa Corp is facing challenges because of the dominance of functional experts in the organization. Heiwa Corp can utilize new technology in the field of Casinos & Gaming industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Heiwa Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Casinos & Gaming industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Heiwa Corp 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.
Creating value in data economy
– The success of analytics program of Heiwa Corp has opened avenues for new revenue streams for the organization in Casinos & Gaming industry. This can help Heiwa Corp to build a more holistic ecosystem for Heiwa Corp products in the Casinos & Gaming industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Heiwa Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Heiwa Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Heiwa Corp are -
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 Heiwa Corp business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Heiwa Corp has witnessed rapid integration of technology during Covid-19 in the Casinos & Gaming industry. As one of the leading players in the industry, Heiwa Corp needs to keep up with the evolution of technology in the Casinos & Gaming 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.
Easy access to finance
– Easy access to finance in Casinos & Gaming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Heiwa Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Heiwa Corp 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 Heiwa Corp is facing in Casinos & Gaming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Casinos & Gaming industry are lowering. It can presents Heiwa Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Casinos & Gaming sector.
Consumer confidence and its impact on Heiwa Corp 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 Casinos & Gaming industry and other sectors.
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. Heiwa Corp 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Heiwa Corp in Casinos & Gaming industry. The Casinos & Gaming 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. Heiwa Corp needs to understand the core reasons impacting the Casinos & Gaming industry. This will help it in building a better workplace.
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 Heiwa Corp.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Heiwa Corp 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 Heiwa Corp prominent markets.
Weighted SWOT Analysis of Heiwa Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Heiwa Corp 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 Heiwa Corp 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 Heiwa Corp 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 Heiwa Corp 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 Heiwa Corp needs to make to build a sustainable competitive advantage.