Japan Wool Textile (3201) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Japan Wool Textile (Japan)

Based on various researches at Oak Spring University , Japan Wool Textile is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Japan Wool Textile

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Japan Wool Textile can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Japan Wool Textile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Japan Wool Textile 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Japan Wool Textile can be done for the following purposes –
1. Strategic planning of Japan Wool Textile
2. Improving business portfolio management of Japan Wool Textile
3. Assessing feasibility of the new initiative in Japan
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Japan Wool Textile

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Strengths of Japan Wool Textile | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Japan Wool Textile are -

Successful track record of launching new products

– Japan Wool Textile has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Japan Wool Textile 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.

Low bargaining power of suppliers

– Suppliers of Japan Wool Textile in the Consumer Cyclical sector have low bargaining power. Japan Wool Textile has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Japan Wool Textile to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Textiles - Non Apparel

– Japan Wool Textile is one of the leading players in the Textiles - Non Apparel industry in Japan. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in Japan but also across the existing markets. The ability to lead change has enabled Japan Wool Textile in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Diverse revenue streams

– Japan Wool Textile is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided Japan Wool Textile 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.

Learning organization

- Japan Wool Textile 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 Japan Wool Textile is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Japan Wool Textile emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– Japan Wool Textile has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Japan Wool Textile staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Digital Transformation in Textiles - Non Apparel industry

- digital transformation varies from industry to industry. For Japan Wool Textile digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Japan Wool Textile 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.

Sustainable margins compare to other players in Textiles - Non Apparel industry

– Japan Wool Textile has clearly differentiated products in the market place. This has enabled Japan Wool Textile to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Japan Wool Textile to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Japan Wool Textile has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of Japan Wool Textile have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– Japan Wool Textile 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 Textiles - Non Apparel 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.

Training and development

– Japan Wool Textile has one of the best training and development program in Consumer Cyclical 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.

High brand equity

– Japan Wool Textile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Japan Wool Textile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses of Japan Wool Textile | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Japan Wool Textile are -

Employees’ less understanding of Japan Wool Textile strategy

– From the outside it seems that the employees of Japan Wool Textile 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 cash cycle compare to competitors

Japan Wool Textile has a high cash cycle compare to other players in the Textiles - Non Apparel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Compensation and incentives

– The revenue per employee of Japan Wool Textile is just above the Textiles - Non Apparel 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.

Increasing silos among functional specialists

– The organizational structure of Japan Wool Textile is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Japan Wool Textile needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Japan Wool Textile to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.

Lack of clear differentiation of Japan Wool Textile products

– To increase the profitability and margins on the products, Japan Wool Textile needs to provide more differentiated products than what it is currently offering in the marketplace.

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 Japan Wool Textile supply chain. Even after few cautionary changes, Japan Wool Textile is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Japan Wool Textile vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Japan Wool Textile has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Products dominated business model

– Even though Japan Wool Textile has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Japan Wool Textile should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Japan Wool Textile is slow explore the new channels of communication. These new channels of communication can help Japan Wool Textile to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.

Low market penetration in new markets

– Outside its home market of Japan, Japan Wool Textile needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Textiles - Non Apparel industry

– The stress on hiring functional specialists at Japan Wool Textile 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.

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Japan Wool Textile Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Japan Wool Textile are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Japan Wool Textile 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. Japan Wool Textile 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Japan Wool Textile 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 Japan Wool Textile to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Japan Wool Textile can improve the customer journey of consumers in the Textiles - Non Apparel 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.

Learning at scale

– Online learning technologies has now opened space for Japan Wool Textile 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.

Manufacturing automation

– Japan Wool Textile can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non Apparel 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.

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. Japan Wool Textile can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Japan Wool Textile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Using analytics as competitive advantage

– Japan Wool Textile has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Textiles - Non Apparel sector. This continuous investment in analytics has enabled Japan Wool Textile to build a competitive advantage using analytics. The analytics driven competitive advantage can help Japan Wool Textile 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

– Japan Wool Textile can develop new processes and procedures in Textiles - Non Apparel 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Japan Wool Textile can use these opportunities to build new business models that can help the communities that Japan Wool Textile operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Japan Wool Textile can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Building a culture of innovation

– managers at Japan Wool Textile 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 Textiles - Non Apparel industry.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Japan Wool Textile 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 Japan Wool Textile to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Japan Wool Textile External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Japan Wool Textile are -

Regulatory challenges

– Japan Wool Textile 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 Textiles - Non Apparel industry regulations.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Japan Wool Textile in the Textiles - Non Apparel sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Japan Wool Textile 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 Textiles - Non Apparel industry.

Easy access to finance

– Easy access to finance in Textiles - Non Apparel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Japan Wool Textile can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Shortening product life cycle

– it is one of the major threat that Japan Wool Textile is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Japan Wool Textile high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Japan Wool Textile business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Japan Wool Textile in Textiles - Non Apparel industry. The Textiles - Non Apparel 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.

Environmental challenges

– Japan Wool Textile 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. Japan Wool Textile can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Japan Wool Textile with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.

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.

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. Japan Wool Textile needs to understand the core reasons impacting the Textiles - Non Apparel 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 Japan Wool Textile.

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Weighted SWOT Analysis of Japan Wool Textile Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Japan Wool Textile 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 Japan Wool Textile 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 Japan Wool Textile 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 Japan Wool Textile 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 Japan Wool Textile needs to make to build a sustainable competitive advantage.

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