SWOT Analysis / TOWS Matrix for Kyoritsu Maintenance (Japan)
Based on various researches at Oak Spring University , Kyoritsu Maintenance is operating in a macro-environment that has been destablized by – geopolitical disruptions, wage bills are increasing, increasing transportation and logistics costs, increasing commodity prices, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Kyoritsu Maintenance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kyoritsu Maintenance can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kyoritsu Maintenance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kyoritsu Maintenance 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 Kyoritsu Maintenance can be done for the following purposes –
1. Strategic planning of Kyoritsu Maintenance
2. Improving business portfolio management of Kyoritsu Maintenance
3. Assessing feasibility of the new initiative in Japan
4. Making a Rental & Leasing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kyoritsu Maintenance
Strengths of Kyoritsu Maintenance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kyoritsu Maintenance are -
Highly skilled collaborators
– Kyoritsu Maintenance has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Rental & Leasing industry. Secondly the value chain collaborators of Kyoritsu Maintenance have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Rental & Leasing industry
- digital transformation varies from industry to industry. For Kyoritsu Maintenance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kyoritsu Maintenance 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.
Cross disciplinary teams
– Horizontal connected teams at the Kyoritsu Maintenance 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.
Ability to lead change in Rental & Leasing
– Kyoritsu Maintenance is one of the leading players in the Rental & Leasing industry in Japan. Over the years it has not only transformed the business landscape in the Rental & Leasing industry in Japan but also across the existing markets. The ability to lead change has enabled Kyoritsu Maintenance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Rental & Leasing industry
– Kyoritsu Maintenance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Kyoritsu Maintenance in Rental & Leasing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Kyoritsu Maintenance is present in almost all the verticals within the Rental & Leasing industry. This has provided Kyoritsu Maintenance 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.
Analytics focus
– Kyoritsu Maintenance 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 Rental & Leasing 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.
High brand equity
– Kyoritsu Maintenance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kyoritsu Maintenance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Kyoritsu Maintenance 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.
Effective Research and Development (R&D)
– Kyoritsu Maintenance has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kyoritsu Maintenance staying ahead in the Rental & Leasing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Kyoritsu Maintenance comprises – understanding the underlying the factors in the Rental & Leasing 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.
Weaknesses of Kyoritsu Maintenance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kyoritsu Maintenance are -
Aligning sales with marketing
– From the outside it seems that Kyoritsu Maintenance needs to have more collaboration between its sales team and marketing team. Sales professionals in the Rental & Leasing industry have deep experience in developing customer relationships. Marketing department at Kyoritsu Maintenance can leverage the sales team experience to cultivate customer relationships as Kyoritsu Maintenance is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of Kyoritsu Maintenance is just above the Rental & Leasing industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the Rental & Leasing industry, Kyoritsu Maintenance 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.
Capital Spending Reduction
– Even during the low interest decade, Kyoritsu Maintenance 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 Rental & Leasing industry using digital technology.
Need for greater diversity
– Kyoritsu Maintenance 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.
Increasing silos among functional specialists
– The organizational structure of Kyoritsu Maintenance is dominated by functional specialists. It is not different from other players in the Rental & Leasing industry, but Kyoritsu Maintenance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kyoritsu Maintenance to focus more on services in the Rental & Leasing industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Japan, Kyoritsu Maintenance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Kyoritsu Maintenance 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kyoritsu Maintenance is slow explore the new channels of communication. These new channels of communication can help Kyoritsu Maintenance to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.
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 Kyoritsu Maintenance supply chain. Even after few cautionary changes, Kyoritsu Maintenance is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kyoritsu Maintenance vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Kyoritsu Maintenance has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Rental & Leasing industry over the last five years. Kyoritsu Maintenance 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.
Kyoritsu Maintenance Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kyoritsu Maintenance are -
Leveraging digital technologies
– Kyoritsu Maintenance 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.
Manufacturing automation
– Kyoritsu Maintenance can use the latest technology developments to improve its manufacturing and designing process in Rental & Leasing 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 Kyoritsu Maintenance 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 Kyoritsu Maintenance to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Kyoritsu Maintenance has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Rental & Leasing sector. This continuous investment in analytics has enabled Kyoritsu Maintenance to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kyoritsu Maintenance 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
– Kyoritsu Maintenance can develop new processes and procedures in Rental & Leasing 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 Kyoritsu Maintenance 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 Rental & Leasing industry.
Creating value in data economy
– The success of analytics program of Kyoritsu Maintenance has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help Kyoritsu Maintenance to build a more holistic ecosystem for Kyoritsu Maintenance products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kyoritsu Maintenance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Rental & Leasing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kyoritsu Maintenance 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. Kyoritsu Maintenance 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kyoritsu Maintenance is facing challenges because of the dominance of functional experts in the organization. Kyoritsu Maintenance can utilize new technology in the field of Rental & Leasing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Kyoritsu Maintenance 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.
Better consumer reach
– The expansion of the 5G network will help Kyoritsu Maintenance to increase its market reach. Kyoritsu Maintenance 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kyoritsu Maintenance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Rental & Leasing industry, and it will provide faster access to the consumers.
Threats Kyoritsu Maintenance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kyoritsu Maintenance are -
Environmental challenges
– Kyoritsu Maintenance 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. Kyoritsu Maintenance can take advantage of this fund but it will also bring new competitors in the Rental & Leasing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kyoritsu Maintenance 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 Kyoritsu Maintenance prominent markets.
High dependence on third party suppliers
– Kyoritsu Maintenance 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 Kyoritsu Maintenance business can come under increasing regulations regarding data privacy, data security, 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kyoritsu Maintenance may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Rental & Leasing sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kyoritsu Maintenance.
Technology acceleration in Forth Industrial Revolution
– Kyoritsu Maintenance has witnessed rapid integration of technology during Covid-19 in the Rental & Leasing industry. As one of the leading players in the industry, Kyoritsu Maintenance needs to keep up with the evolution of technology in the Rental & Leasing 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.
Regulatory challenges
– Kyoritsu Maintenance 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 Rental & Leasing industry regulations.
Shortening product life cycle
– it is one of the major threat that Kyoritsu Maintenance is facing in Rental & Leasing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Kyoritsu Maintenance 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 Rental & Leasing industry and other sectors.
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 Kyoritsu Maintenance in the Rental & Leasing sector and impact the bottomline of the organization.
Increasing wage structure of Kyoritsu Maintenance
– 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 Kyoritsu Maintenance.
Weighted SWOT Analysis of Kyoritsu Maintenance Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kyoritsu Maintenance 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 Kyoritsu Maintenance 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 Kyoritsu Maintenance 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 Kyoritsu Maintenance 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 Kyoritsu Maintenance needs to make to build a sustainable competitive advantage.