SWOT Analysis / TOWS Matrix for Inaba Denki Sangyo (Japan)
Based on various researches at Oak Spring University , Inaba Denki Sangyo is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, technology disruption, supply chains are disrupted by pandemic , wage bills are increasing,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Inaba Denki Sangyo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Inaba Denki Sangyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inaba Denki Sangyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inaba Denki Sangyo 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 Inaba Denki Sangyo can be done for the following purposes –
1. Strategic planning of Inaba Denki Sangyo
2. Improving business portfolio management of Inaba Denki Sangyo
3. Assessing feasibility of the new initiative in Japan
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Inaba Denki Sangyo
Strengths of Inaba Denki Sangyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inaba Denki Sangyo are -
Training and development
– Inaba Denki Sangyo has one of the best training and development program in Technology 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 lead change in Electronic Instr. & Controls
– Inaba Denki Sangyo is one of the leading players in the Electronic Instr. & Controls industry in Japan. Over the years it has not only transformed the business landscape in the Electronic Instr. & Controls industry in Japan but also across the existing markets. The ability to lead change has enabled Inaba Denki Sangyo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
– Inaba Denki Sangyo 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 Electronic Instr. & Controls 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.
Cross disciplinary teams
– Horizontal connected teams at the Inaba Denki Sangyo 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.
Effective Research and Development (R&D)
– Inaba Denki Sangyo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Inaba Denki Sangyo staying ahead in the Electronic Instr. & Controls industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Inaba Denki Sangyo in the Technology sector have low bargaining power. Inaba Denki Sangyo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Inaba Denki Sangyo to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Electronic Instr. & Controls industry
– Inaba Denki Sangyo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
– The operational resilience strategy of Inaba Denki Sangyo comprises – understanding the underlying the factors in the Electronic Instr. & Controls 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.
High brand equity
– Inaba Denki Sangyo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Inaba Denki Sangyo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Inaba Denki Sangyo in Electronic Instr. & Controls industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Inaba Denki Sangyo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Inaba Denki Sangyo 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
– Inaba Denki Sangyo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Inaba Denki Sangyo 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 Inaba Denki Sangyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Inaba Denki Sangyo are -
High cash cycle compare to competitors
Inaba Denki Sangyo has a high cash cycle compare to other players in the Electronic Instr. & Controls industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Electronic Instr. & Controls industry
– The stress on hiring functional specialists at Inaba Denki Sangyo 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.
High dependence on Inaba Denki Sangyo ‘s star products
– The top 2 products and services of Inaba Denki Sangyo still accounts for major business revenue. This dependence on star products in Electronic Instr. & Controls industry has resulted into insufficient focus on developing new products, even though Inaba Denki Sangyo has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Japan, Inaba Denki Sangyo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Inaba Denki Sangyo products
– To increase the profitability and margins on the products, Inaba Denki Sangyo needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Inaba Denki Sangyo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electronic Instr. & Controls industry over the last five years. Inaba Denki Sangyo 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 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 Inaba Denki Sangyo supply chain. Even after few cautionary changes, Inaba Denki Sangyo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Inaba Denki Sangyo vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Inaba Denki Sangyo has some of the most successful models in the Electronic Instr. & Controls industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Inaba Denki Sangyo should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Inaba Denki Sangyo is just above the Electronic Instr. & Controls 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.
Employees’ less understanding of Inaba Denki Sangyo strategy
– From the outside it seems that the employees of Inaba Denki Sangyo 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.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in Japan, Inaba Denki Sangyo 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 Electronic Instr. & Controls industry.
Inaba Denki Sangyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Inaba Denki Sangyo are -
Developing new processes and practices
– Inaba Denki Sangyo can develop new processes and procedures in Electronic Instr. & Controls 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.
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. Inaba Denki Sangyo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Inaba Denki Sangyo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electronic Instr. & Controls sector. This continuous investment in analytics has enabled Inaba Denki Sangyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inaba Denki Sangyo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Electronic Instr. & Controls industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Inaba Denki Sangyo 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. Inaba Denki Sangyo 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electronic Instr. & Controls industry, but it has also influenced the consumer preferences. Inaba Denki Sangyo 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, Inaba Denki Sangyo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Inaba Denki Sangyo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
– Inaba Denki Sangyo can use the latest technology developments to improve its manufacturing and designing process in Electronic Instr. & Controls 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.
Learning at scale
– Online learning technologies has now opened space for Inaba Denki Sangyo 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.
– Inaba Denki Sangyo 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.
Leveraging digital technologies
– Inaba Denki Sangyo 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.
Building a culture of innovation
– managers at Inaba Denki Sangyo 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 Electronic Instr. & Controls industry.
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 Inaba Denki Sangyo 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.
Threats Inaba Denki Sangyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Inaba Denki Sangyo are -
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.
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. Inaba Denki Sangyo needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
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 Inaba Denki Sangyo business can come under increasing regulations regarding data privacy, data security, etc.
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 Inaba Denki Sangyo.
High dependence on third party suppliers
– Inaba Denki Sangyo 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.
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. Inaba Denki Sangyo 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 Inaba Denki Sangyo in Electronic Instr. & Controls industry. The Electronic Instr. & Controls 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.
– Inaba Denki Sangyo 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 Electronic Instr. & Controls industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Inaba Denki Sangyo 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 Inaba Denki Sangyo prominent markets.
– 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 Inaba Denki Sangyo in the Electronic Instr. & Controls sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Inaba Denki Sangyo is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
– Inaba Denki Sangyo 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. Inaba Denki Sangyo can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls industry.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Inaba Denki Sangyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Inaba Denki Sangyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Inaba Denki Sangyo 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 Inaba Denki Sangyo 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 Inaba Denki Sangyo 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 Inaba Denki Sangyo 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 Inaba Denki Sangyo needs to make to build a sustainable competitive advantage.