Oki Electric Industry (6703) SWOT Analysis / TOWS Matrix / MBA Resources
Communications Equipment
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Oki Electric Industry (Japan)
Based on various researches at Oak Spring University , Oki Electric Industry is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of Oki Electric Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Oki Electric Industry can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oki Electric Industry, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oki Electric Industry 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 Oki Electric Industry can be done for the following purposes –
1. Strategic planning of Oki Electric Industry
2. Improving business portfolio management of Oki Electric Industry
3. Assessing feasibility of the new initiative in Japan
4. Making a Communications Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oki Electric Industry
Strengths of Oki Electric Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oki Electric Industry are -
Superior customer experience
– The customer experience strategy of Oki Electric Industry in Communications Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Oki Electric Industry is one of the most innovative firm in Communications Equipment sector.
Cross disciplinary teams
– Horizontal connected teams at the Oki Electric Industry 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 Oki Electric Industry
– The covid-19 pandemic has put organizational resilience at the centre of everthing Oki Electric Industry does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Oki Electric Industry has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Oki Electric Industry staying ahead in the Communications Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Oki Electric Industry is present in almost all the verticals within the Communications Equipment industry. This has provided Oki Electric Industry 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.
Successful track record of launching new products
– Oki Electric Industry has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oki Electric Industry 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.
Digital Transformation in Communications Equipment industry
- digital transformation varies from industry to industry. For Oki Electric Industry digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oki Electric Industry 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 Oki Electric Industry 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.
Training and development
– Oki Electric Industry 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.
Sustainable margins compare to other players in Communications Equipment industry
– Oki Electric Industry has clearly differentiated products in the market place. This has enabled Oki Electric Industry to fetch slight price premium compare to the competitors in the Communications Equipment industry. The sustainable margins have also helped Oki Electric Industry to invest into research and development (R&D) and innovation.
High brand equity
– Oki Electric Industry has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oki Electric Industry to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Oki Electric Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Oki Electric Industry are -
Slow decision making process
– As mentioned earlier in the report, Oki Electric Industry has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Communications Equipment industry over the last five years. Oki Electric Industry 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 Oki Electric Industry has some of the most successful models in the Communications Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Oki Electric Industry should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Communications Equipment industry
– because of the regulatory requirements in Japan, Oki Electric Industry 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 Communications Equipment industry.
Increasing silos among functional specialists
– The organizational structure of Oki Electric Industry is dominated by functional specialists. It is not different from other players in the Communications Equipment industry, but Oki Electric Industry needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oki Electric Industry to focus more on services in the Communications Equipment industry rather than just following the product oriented approach.
Lack of clear differentiation of Oki Electric Industry products
– To increase the profitability and margins on the products, Oki Electric Industry needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Japan, Oki Electric Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Communications Equipment industry, Oki Electric Industry 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.
Ability to respond to the competition
– As the decision making is very deliberative at Oki Electric Industry, in the dynamic environment of Communications Equipment industry it has struggled to respond to the nimble upstart competition. Oki Electric Industry has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Oki Electric Industry has high operating costs in the Communications Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Oki Electric Industry lucrative customers.
High dependence on Oki Electric Industry ‘s star products
– The top 2 products and services of Oki Electric Industry still accounts for major business revenue. This dependence on star products in Communications Equipment industry has resulted into insufficient focus on developing new products, even though Oki Electric Industry has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Oki Electric Industry 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 Communications Equipment industry using digital technology.
Oki Electric Industry Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Oki Electric Industry are -
Learning at scale
– Online learning technologies has now opened space for Oki Electric Industry 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oki Electric Industry 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. Oki Electric Industry 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oki Electric Industry 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 Oki Electric Industry to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Oki Electric Industry can develop new processes and procedures in Communications Equipment 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.
Leveraging digital technologies
– Oki Electric Industry 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.
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. Oki Electric Industry can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Oki Electric Industry has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Equipment sector. This continuous investment in analytics has enabled Oki Electric Industry to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oki Electric Industry to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oki Electric Industry can use these opportunities to build new business models that can help the communities that Oki Electric Industry operates in. Secondly it can use opportunities from government spending in Communications Equipment sector.
Better consumer reach
– The expansion of the 5G network will help Oki Electric Industry to increase its market reach. Oki Electric Industry 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oki Electric Industry is facing challenges because of the dominance of functional experts in the organization. Oki Electric Industry can utilize new technology in the field of Communications Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oki Electric Industry can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Oki Electric Industry has opened avenues for new revenue streams for the organization in Communications Equipment industry. This can help Oki Electric Industry to build a more holistic ecosystem for Oki Electric Industry products in the Communications Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Oki Electric Industry can use the latest technology developments to improve its manufacturing and designing process in Communications Equipment 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.
Threats Oki Electric Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Oki Electric Industry are -
Shortening product life cycle
– it is one of the major threat that Oki Electric Industry is facing in Communications Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Oki Electric Industry 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 Communications Equipment industry regulations.
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 Oki Electric Industry in the Communications Equipment sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Oki Electric Industry has witnessed rapid integration of technology during Covid-19 in the Communications Equipment industry. As one of the leading players in the industry, Oki Electric Industry needs to keep up with the evolution of technology in the Communications Equipment 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.
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. Oki Electric Industry needs to understand the core reasons impacting the Communications Equipment industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Communications Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oki Electric Industry can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oki Electric Industry in Communications Equipment industry. The Communications Equipment 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 dependence on third party suppliers
– Oki Electric Industry 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 Oki Electric Industry business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Oki Electric Industry 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 Communications Equipment industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oki Electric Industry 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 Oki Electric Industry prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Oki Electric Industry may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Equipment sector.
Weighted SWOT Analysis of Oki Electric Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Oki Electric Industry 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 Oki Electric Industry 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 Oki Electric Industry 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 Oki Electric Industry 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 Oki Electric Industry needs to make to build a sustainable competitive advantage.