SWOT Analysis / TOWS Matrix for Future Architect (Japan)
Based on various researches at Oak Spring University , Future Architect is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, there is backlash against globalization, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
wage bills are increasing, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Future Architect can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Future Architect, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Future Architect 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 Future Architect can be done for the following purposes –
1. Strategic planning of Future Architect
2. Improving business portfolio management of Future Architect
3. Assessing feasibility of the new initiative in Japan
4. Making a Computer Networks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Future Architect
Strengths of Future Architect | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Future Architect are -
High switching costs
– The high switching costs that Future Architect 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.
Strong track record of project management in the Computer Networks industry
– Future Architect is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Future Architect is present in almost all the verticals within the Computer Networks industry. This has provided Future Architect 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
– Future Architect 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.
Effective Research and Development (R&D)
– Future Architect has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Future Architect staying ahead in the Computer Networks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Computer Networks
– Future Architect is one of the leading players in the Computer Networks industry in Japan. Over the years it has not only transformed the business landscape in the Computer Networks industry in Japan but also across the existing markets. The ability to lead change has enabled Future Architect in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Future Architect 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.
Analytics focus
– Future Architect 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 Computer Networks 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 Future Architect comprises – understanding the underlying the factors in the Computer Networks 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.
Low bargaining power of suppliers
– Suppliers of Future Architect in the Technology sector have low bargaining power. Future Architect has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Future Architect to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Future Architect 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 Future Architect is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Future Architect emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Future Architect is one of the most innovative firm in Computer Networks sector.
Weaknesses of Future Architect | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Future Architect are -
Interest costs
– Compare to the competition, Future Architect 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.
High dependence on Future Architect ‘s star products
– The top 2 products and services of Future Architect still accounts for major business revenue. This dependence on star products in Computer Networks industry has resulted into insufficient focus on developing new products, even though Future Architect has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Future Architect needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Networks industry have deep experience in developing customer relationships. Marketing department at Future Architect can leverage the sales team experience to cultivate customer relationships as Future Architect is planning to shift buying processes online.
Products dominated business model
– Even though Future Architect has some of the most successful models in the Computer Networks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Future Architect should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of Future Architect strategy
– From the outside it seems that the employees of Future Architect 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.
Workers concerns about automation
– As automation is fast increasing in the Computer Networks industry, Future Architect 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.
Compensation and incentives
– The revenue per employee of Future Architect is just above the Computer Networks industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Future Architect is slow explore the new channels of communication. These new channels of communication can help Future Architect to provide better information regarding Computer Networks products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Future Architect 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 Computer Networks industry using digital technology.
High bargaining power of channel partners in Computer Networks industry
– because of the regulatory requirements in Japan, Future Architect 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 Computer Networks industry.
Lack of clear differentiation of Future Architect products
– To increase the profitability and margins on the products, Future Architect needs to provide more differentiated products than what it is currently offering in the marketplace.
Future Architect Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Future Architect are -
Building a culture of innovation
– managers at Future Architect 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 Computer Networks industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Future Architect in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Networks industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Future Architect can use these opportunities to build new business models that can help the communities that Future Architect operates in. Secondly it can use opportunities from government spending in Computer Networks sector.
Use of Bitcoin and other crypto currencies for transactions in Computer Networks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Future Architect in the Computer Networks industry. Now Future Architect can target international markets with far fewer capital restrictions requirements than the existing system.
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 Future Architect 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, Future Architect 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 Future Architect to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Future Architect has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Networks sector. This continuous investment in analytics has enabled Future Architect to build a competitive advantage using analytics. The analytics driven competitive advantage can help Future Architect to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Future Architect 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 Future Architect 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Future Architect 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 Future Architect to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Future Architect 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.
Better consumer reach
– The expansion of the 5G network will help Future Architect to increase its market reach. Future Architect 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.
Loyalty marketing
– Future Architect 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.
Threats Future Architect External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Future Architect are -
Technology acceleration in Forth Industrial Revolution
– Future Architect has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, Future Architect needs to keep up with the evolution of technology in the Computer Networks 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Future Architect may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Networks sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Future Architect in Computer Networks industry. The Computer Networks 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Networks industry are lowering. It can presents Future Architect with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Networks sector.
Consumer confidence and its impact on Future Architect 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 Computer Networks industry and other sectors.
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. Future Architect 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.
Easy access to finance
– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Future Architect 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, Future Architect 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 Future Architect prominent markets.
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 Future Architect in the Computer Networks sector and impact the bottomline of the organization.
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.
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 Future Architect.
Regulatory challenges
– Future Architect 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 Computer Networks industry regulations.
Shortening product life cycle
– it is one of the major threat that Future Architect is facing in Computer Networks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Future Architect Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Future Architect 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 Future Architect 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 Future Architect 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 Future Architect 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 Future Architect needs to make to build a sustainable competitive advantage.