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 – increasing household debt because of falling income levels, technology disruption, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing energy prices, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, 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 -
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.
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.
Strong track record of project management in the Trucking industry
– The Sumitomo Warehouse Co Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
Innovation driven organization
– The Sumitomo Warehouse Co Ltd is one of the most innovative firm in Trucking sector.
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.
Operational resilience
– The operational resilience strategy of The Sumitomo Warehouse Co Ltd comprises – understanding the underlying the factors in the Trucking 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.
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.
Successful track record of launching new products
– The Sumitomo Warehouse Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. The Sumitomo Warehouse Co Ltd 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 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 -
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, The Sumitomo Warehouse Co Ltd 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 Trucking industry using digital technology.
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.
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.
Slow decision making process
– As mentioned earlier in the report, The Sumitomo Warehouse Co Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Trucking industry over the last five years. The Sumitomo Warehouse Co Ltd 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 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.
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.
Increasing silos among functional specialists
– The organizational structure of The Sumitomo Warehouse Co Ltd is dominated by functional specialists. It is not different from other players in the Trucking industry, but The Sumitomo Warehouse Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help The Sumitomo Warehouse Co Ltd to focus more on services in the Trucking industry rather than just following the product oriented approach.
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 -
Leveraging digital technologies
– The Sumitomo Warehouse Co Ltd 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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for The Sumitomo Warehouse Co Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
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.
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.
Manufacturing automation
– The Sumitomo Warehouse Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.
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 The Sumitomo Warehouse Co Ltd 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.
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.
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.
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. The Sumitomo Warehouse Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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 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.
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.
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.
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.
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.
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. The Sumitomo Warehouse Co Ltd needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that The Sumitomo Warehouse Co Ltd is facing in Trucking 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 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, The Sumitomo Warehouse Co Ltd 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 The Sumitomo Warehouse Co Ltd prominent markets.
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.
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.
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.
