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 – geopolitical disruptions, there is backlash against globalization, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing commodity prices, increasing energy prices,
challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, 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 -
Low bargaining power of suppliers
– Suppliers of The Sumitomo Warehouse Co Ltd in the Transportation sector have low bargaining power. The Sumitomo Warehouse Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps The Sumitomo Warehouse Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– The Sumitomo Warehouse Co Ltd is one of the most innovative firm in Trucking sector.
Superior customer experience
– The customer experience strategy of The Sumitomo Warehouse Co Ltd in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
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 brand equity
– The Sumitomo Warehouse Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled The Sumitomo Warehouse Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– The Sumitomo Warehouse Co Ltd is present in almost all the verticals within the Trucking industry. This has provided The Sumitomo Warehouse Co Ltd 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.
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.
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.
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 -
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.
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.
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.
High bargaining power of channel partners in Trucking industry
– because of the regulatory requirements in Japan, The Sumitomo Warehouse Co Ltd 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 Trucking industry.
No frontier risks strategy
– From the 10K / annual statement of The Sumitomo Warehouse Co Ltd, it seems that company is thinking out the frontier risks that can impact Trucking industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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 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.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at The Sumitomo Warehouse Co Ltd 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.
Low market penetration in new markets
– Outside its home market of Japan, The Sumitomo Warehouse Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
Building a culture of innovation
– managers at The Sumitomo Warehouse Co Ltd 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 Trucking industry.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, The Sumitomo Warehouse Co Ltd 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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. The Sumitomo Warehouse Co Ltd 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.
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.
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 The Sumitomo Warehouse Co Ltd.
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.
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.
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.
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.
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.
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.