SWOT Analysis / TOWS Matrix for Askul Corp (Japan)
Based on various researches at Oak Spring University , Askul Corp is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing commodity prices, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Askul Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Askul Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Askul 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 Askul Corp can be done for the following purposes –
1. Strategic planning of Askul Corp
2. Improving business portfolio management of Askul Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Askul Corp
Strengths of Askul Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Askul Corp are -
Sustainable margins compare to other players in Office Supplies industry
– Askul Corp has clearly differentiated products in the market place. This has enabled Askul Corp to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped Askul Corp to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Askul Corp 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.
Organizational Resilience of Askul Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Askul Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Askul Corp is one of the most innovative firm in Office Supplies sector.
Ability to recruit top talent
– Askul Corp is one of the leading players in the Office Supplies 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.
Digital Transformation in Office Supplies industry
- digital transformation varies from industry to industry. For Askul Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Askul 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.
High switching costs
– The high switching costs that Askul 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.
Low bargaining power of suppliers
– Suppliers of Askul Corp in the Consumer/Non-Cyclical sector have low bargaining power. Askul Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Askul Corp to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Askul 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 Askul Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Askul Corp emphasize – knowledge, initiative, and innovation.
High brand equity
– Askul Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Askul Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Askul 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 Office Supplies 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.
Training and development
– Askul Corp has one of the best training and development program in Consumer/Non-Cyclical 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.
Weaknesses of Askul Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Askul Corp are -
Interest costs
– Compare to the competition, Askul 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.
Ability to respond to the competition
– As the decision making is very deliberative at Askul Corp, in the dynamic environment of Office Supplies industry it has struggled to respond to the nimble upstart competition. Askul Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Japan, Askul Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Askul Corp is dominated by functional specialists. It is not different from other players in the Office Supplies industry, but Askul Corp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Askul Corp to focus more on services in the Office Supplies industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Askul Corp, it seems that company is thinking out the frontier risks that can impact Office Supplies 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.
High cash cycle compare to competitors
Askul Corp has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Askul 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 Office Supplies industry over the last five years. Askul 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.
Products dominated business model
– Even though Askul Corp has some of the most successful models in the Office Supplies industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Askul Corp should strive to include more intangible value offerings along with its core products and services.
High dependence on Askul Corp ‘s star products
– The top 2 products and services of Askul Corp still accounts for major business revenue. This dependence on star products in Office Supplies industry has resulted into insufficient focus on developing new products, even though Askul Corp has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Askul Corp is just above the Office Supplies 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.
Skills based hiring in Office Supplies industry
– The stress on hiring functional specialists at Askul Corp has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Askul Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Askul Corp are -
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. Askul Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Office Supplies industry, but it has also influenced the consumer preferences. Askul Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Askul 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 Askul 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Askul Corp is facing challenges because of the dominance of functional experts in the organization. Askul Corp can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Askul 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Askul Corp 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 Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Askul 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. Askul 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.
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 Askul 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.
Manufacturing automation
– Askul Corp can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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, Askul Corp can use these opportunities to build new business models that can help the communities that Askul Corp operates in. Secondly it can use opportunities from government spending in Office Supplies sector.
Better consumer reach
– The expansion of the 5G network will help Askul Corp to increase its market reach. Askul Corp 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.
Leveraging digital technologies
– Askul 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.
Developing new processes and practices
– Askul Corp can develop new processes and procedures in Office Supplies 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 Askul Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Askul Corp are -
Technology acceleration in Forth Industrial Revolution
– Askul Corp has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, Askul Corp needs to keep up with the evolution of technology in the Office Supplies 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.
Environmental challenges
– Askul 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. Askul Corp can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Askul Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Supplies sector.
Regulatory challenges
– Askul 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 Office Supplies 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. Askul Corp needs to understand the core reasons impacting the Office Supplies industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents Askul Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.
Shortening product life cycle
– it is one of the major threat that Askul Corp is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Askul Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Askul Corp.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Askul 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 Askul Corp prominent markets.
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 Askul Corp in the Office Supplies 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.
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 Askul Corp business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Askul Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Askul 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 Askul 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 Askul 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 Askul 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 Askul Corp needs to make to build a sustainable competitive advantage.
