SWOT Analysis / TOWS Matrix for Sakata Seed Corp (Japan)
Based on various researches at Oak Spring University , Sakata Seed Corp is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, technology disruption, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sakata Seed Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sakata Seed Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sakata Seed 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 Sakata Seed Corp can be done for the following purposes –
1. Strategic planning of Sakata Seed Corp
2. Improving business portfolio management of Sakata Seed Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sakata Seed Corp
Strengths of Sakata Seed Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sakata Seed Corp are -
Analytics focus
– Sakata Seed 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 Crops 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.
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For Sakata Seed Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sakata Seed Corp 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.
Successful track record of launching new products
– Sakata Seed Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sakata Seed Corp 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.
High brand equity
– Sakata Seed Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sakata Seed Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Sakata Seed 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.
Strong track record of project management in the Crops industry
– Sakata Seed Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Sakata Seed Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sakata Seed Corp staying ahead in the Crops industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Sakata Seed Corp in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Sakata Seed Corp in the Consumer/Non-Cyclical sector have low bargaining power. Sakata Seed Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sakata Seed Corp to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Sakata Seed Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of Sakata Seed Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Sakata Seed Corp is one of the most innovative firm in Crops sector.
Diverse revenue streams
– Sakata Seed Corp is present in almost all the verticals within the Crops industry. This has provided Sakata Seed 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.
Weaknesses of Sakata Seed Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sakata Seed Corp are -
High operating costs
– Compare to the competitors, Sakata Seed Corp has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sakata Seed Corp lucrative customers.
Low market penetration in new markets
– Outside its home market of Japan, Sakata Seed Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Sakata Seed Corp 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 Sakata Seed Corp is just above the Crops 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.
Ability to respond to the competition
– As the decision making is very deliberative at Sakata Seed Corp, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Sakata Seed Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Sakata Seed Corp has some of the most successful models in the Crops industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sakata Seed Corp should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Sakata Seed Corp has a high cash cycle compare to other players in the Crops industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Sakata Seed Corp strategy
– From the outside it seems that the employees of Sakata Seed Corp don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Sakata Seed Corp 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 Crops industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Sakata Seed Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at Sakata Seed Corp can leverage the sales team experience to cultivate customer relationships as Sakata Seed Corp is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Crops industry, Sakata Seed 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.
Sakata Seed Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sakata Seed Corp are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sakata Seed Corp 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 Sakata Seed Corp to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sakata Seed Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Sakata Seed Corp can develop new processes and procedures in Crops 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.
Loyalty marketing
– Sakata Seed Corp 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.
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. Sakata Seed Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Sakata Seed Corp can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
Leveraging digital technologies
– Sakata Seed 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sakata Seed Corp 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. Sakata Seed Corp 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sakata Seed Corp can use these opportunities to build new business models that can help the communities that Sakata Seed Corp operates in. Secondly it can use opportunities from government spending in Crops sector.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sakata Seed Corp in the Crops industry. Now Sakata Seed Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Sakata Seed Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled Sakata Seed Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sakata Seed Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. Sakata Seed Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sakata Seed Corp 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.
Threats Sakata Seed Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sakata Seed Corp are -
Stagnating economy with rate increase
– Sakata Seed Corp 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 Crops 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 Sakata Seed Corp in the Crops sector and impact the bottomline of the organization.
Environmental challenges
– Sakata Seed Corp 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. Sakata Seed Corp can take advantage of this fund but it will also bring new competitors in the Crops industry.
Consumer confidence and its impact on Sakata Seed 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 Crops industry and other sectors.
Regulatory challenges
– Sakata Seed Corp 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 Crops industry regulations.
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. Sakata Seed Corp needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Sakata Seed Corp has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, Sakata Seed Corp needs to keep up with the evolution of technology in the Crops 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sakata Seed Corp in Crops industry. The Crops 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.
Increasing wage structure of Sakata Seed Corp
– 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 Sakata Seed Corp.
High dependence on third party suppliers
– Sakata Seed 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.
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.
Shortening product life cycle
– it is one of the major threat that Sakata Seed Corp is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Sakata Seed Corp business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Sakata Seed Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sakata Seed 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 Sakata Seed 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 Sakata Seed 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 Sakata Seed 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 Sakata Seed Corp needs to make to build a sustainable competitive advantage.
