The Sumitomo Warehouse Co Ltd (9303) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for The Sumitomo Warehouse Co Ltd (Japan)
Based on various researches at Oak Spring University , The Sumitomo Warehouse Co Ltd is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing energy prices, increasing commodity prices,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of The Sumitomo Warehouse Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that The Sumitomo Warehouse Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the The Sumitomo Warehouse Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd can be done for the following purposes –
1. Strategic planning of The Sumitomo Warehouse Co Ltd
2. Improving business portfolio management of The Sumitomo Warehouse Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of The Sumitomo Warehouse Co Ltd
Strengths of The Sumitomo Warehouse Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of The Sumitomo Warehouse Co Ltd are -
Innovation driven organization
– The Sumitomo Warehouse Co Ltd is one of the most innovative firm in Trucking sector.
Ability to lead change in Trucking
– The Sumitomo Warehouse Co Ltd is one of the leading players in the Trucking industry in Japan. Over the years it has not only transformed the business landscape in the Trucking industry in Japan but also across the existing markets. The ability to lead change has enabled The Sumitomo Warehouse Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– The Sumitomo Warehouse Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – The Sumitomo Warehouse Co Ltd staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For The Sumitomo Warehouse Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd 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.
Analytics focus
– The Sumitomo Warehouse Co Ltd 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 Trucking 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.
Ability to recruit top talent
– The Sumitomo Warehouse Co Ltd is one of the leading players in the Trucking 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.
Cross disciplinary teams
– Horizontal connected teams at the The Sumitomo Warehouse Co Ltd 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.
Highly skilled collaborators
– The Sumitomo Warehouse Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of The Sumitomo Warehouse Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at The Sumitomo Warehouse Co Ltd emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Trucking industry
– The Sumitomo Warehouse Co Ltd has clearly differentiated products in the market place. This has enabled The Sumitomo Warehouse Co Ltd to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped The Sumitomo Warehouse Co Ltd to invest into research and development (R&D) and innovation.
Training and development
– The Sumitomo Warehouse Co Ltd has one of the best training and development program in Transportation 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 The Sumitomo Warehouse Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Sumitomo Warehouse Co Ltd are -
High cash cycle compare to competitors
The Sumitomo Warehouse Co Ltd has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on The Sumitomo Warehouse Co Ltd ‘s star products
– The top 2 products and services of The Sumitomo Warehouse Co Ltd still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though The Sumitomo Warehouse Co Ltd has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As The Sumitomo Warehouse Co Ltd is one of the leading players in the Trucking industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Trucking industry in last five years.
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 The Sumitomo Warehouse Co Ltd supply chain. Even after few cautionary changes, The Sumitomo Warehouse Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left The Sumitomo Warehouse Co Ltd vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, The Sumitomo Warehouse Co Ltd is slow explore the new channels of communication. These new channels of communication can help The Sumitomo Warehouse Co Ltd to provide better information regarding Trucking products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, The Sumitomo Warehouse Co Ltd has high operating costs in the Trucking industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract The Sumitomo Warehouse Co Ltd lucrative customers.
Employees’ less understanding of The Sumitomo Warehouse Co Ltd strategy
– From the outside it seems that the employees of The Sumitomo Warehouse Co Ltd 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.
Interest costs
– Compare to the competition, The Sumitomo Warehouse Co Ltd 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.
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, The Sumitomo Warehouse Co Ltd 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.
Products dominated business model
– Even though The Sumitomo Warehouse Co Ltd has some of the most successful models in the Trucking industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. The Sumitomo Warehouse Co Ltd should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at The Sumitomo Warehouse Co Ltd, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. The Sumitomo Warehouse Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
The Sumitomo Warehouse Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of The Sumitomo Warehouse Co Ltd are -
Loyalty marketing
– The Sumitomo Warehouse Co Ltd 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.
Learning at scale
– Online learning technologies has now opened space for The Sumitomo Warehouse Co Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. The Sumitomo Warehouse Co Ltd 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. The Sumitomo Warehouse Co Ltd 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.
Buying journey improvements
– The Sumitomo Warehouse Co Ltd can improve the customer journey of consumers in the Trucking industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, The Sumitomo Warehouse Co Ltd can use these opportunities to build new business models that can help the communities that The Sumitomo Warehouse Co Ltd operates in. Secondly it can use opportunities from government spending in Trucking sector.
Using analytics as competitive advantage
– The Sumitomo Warehouse Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled The Sumitomo Warehouse Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help The Sumitomo Warehouse Co Ltd 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
– The Sumitomo Warehouse Co Ltd can develop new processes and procedures in Trucking 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.
Creating value in data economy
– The success of analytics program of The Sumitomo Warehouse Co Ltd has opened avenues for new revenue streams for the organization in Trucking industry. This can help The Sumitomo Warehouse Co Ltd to build a more holistic ecosystem for The Sumitomo Warehouse Co Ltd products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for The Sumitomo Warehouse Co Ltd in the Trucking industry. Now The Sumitomo Warehouse Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help The Sumitomo Warehouse Co Ltd to increase its market reach. The Sumitomo Warehouse Co Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects The Sumitomo Warehouse Co Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats The Sumitomo Warehouse Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of The Sumitomo Warehouse Co Ltd are -
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 The Sumitomo Warehouse Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on The Sumitomo Warehouse Co Ltd 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 Trucking industry and other sectors.
Regulatory challenges
– The Sumitomo Warehouse Co Ltd 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 Trucking industry regulations.
High dependence on third party suppliers
– The Sumitomo Warehouse Co Ltd 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.
Environmental challenges
– The Sumitomo Warehouse Co Ltd 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. The Sumitomo Warehouse Co Ltd can take advantage of this fund but it will also bring new competitors in the Trucking 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 The Sumitomo Warehouse Co Ltd in the Trucking sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– The Sumitomo Warehouse Co Ltd 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 Trucking industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, The Sumitomo Warehouse Co Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. The Sumitomo Warehouse Co Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of The Sumitomo Warehouse Co Ltd
– 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 The Sumitomo Warehouse Co Ltd.
Technology acceleration in Forth Industrial Revolution
– The Sumitomo Warehouse Co Ltd has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, The Sumitomo Warehouse Co Ltd needs to keep up with the evolution of technology in the Trucking 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents The Sumitomo Warehouse Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for The Sumitomo Warehouse Co Ltd in Trucking industry. The Trucking 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.
Weighted SWOT Analysis of The Sumitomo Warehouse Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd needs to make to build a sustainable competitive advantage.