SWOT Analysis / TOWS Matrix for Kyokuto Kaihatsu Kogyo (Japan)
Based on various researches at Oak Spring University , Kyokuto Kaihatsu Kogyo is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of Kyokuto Kaihatsu Kogyo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kyokuto Kaihatsu Kogyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kyokuto Kaihatsu Kogyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo can be done for the following purposes –
1. Strategic planning of Kyokuto Kaihatsu Kogyo
2. Improving business portfolio management of Kyokuto Kaihatsu Kogyo
3. Assessing feasibility of the new initiative in Japan
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kyokuto Kaihatsu Kogyo
Strengths of Kyokuto Kaihatsu Kogyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kyokuto Kaihatsu Kogyo are -
Organizational Resilience of Kyokuto Kaihatsu Kogyo
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kyokuto Kaihatsu Kogyo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Kyokuto Kaihatsu Kogyo has one of the best training and development program in Capital Goods 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.
Operational resilience
– The operational resilience strategy of Kyokuto Kaihatsu Kogyo comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Highly skilled collaborators
– Kyokuto Kaihatsu Kogyo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Kyokuto Kaihatsu Kogyo have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Kyokuto Kaihatsu Kogyo in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Kyokuto Kaihatsu Kogyo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kyokuto Kaihatsu Kogyo 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.
Strong track record of project management in the Misc. Capital Goods industry
– Kyokuto Kaihatsu Kogyo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Misc. Capital Goods
– Kyokuto Kaihatsu Kogyo is one of the leading players in the Misc. Capital Goods industry in Japan. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in Japan but also across the existing markets. The ability to lead change has enabled Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo 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.
High brand equity
– Kyokuto Kaihatsu Kogyo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kyokuto Kaihatsu Kogyo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Kyokuto Kaihatsu Kogyo 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.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Kyokuto Kaihatsu Kogyo has clearly differentiated products in the market place. This has enabled Kyokuto Kaihatsu Kogyo to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Kyokuto Kaihatsu Kogyo to invest into research and development (R&D) and innovation.
Weaknesses of Kyokuto Kaihatsu Kogyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kyokuto Kaihatsu Kogyo are -
Slow to strategic competitive environment developments
– As Kyokuto Kaihatsu Kogyo is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
High cash cycle compare to competitors
Kyokuto Kaihatsu Kogyo has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Kyokuto Kaihatsu Kogyo needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Kyokuto Kaihatsu Kogyo can leverage the sales team experience to cultivate customer relationships as Kyokuto Kaihatsu Kogyo is planning to shift buying processes online.
High dependence on Kyokuto Kaihatsu Kogyo ‘s star products
– The top 2 products and services of Kyokuto Kaihatsu Kogyo still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Kyokuto Kaihatsu Kogyo has relatively successful track record of launching new products.
Need for greater diversity
– Kyokuto Kaihatsu Kogyo 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.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Kyokuto Kaihatsu Kogyo 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.
Capital Spending Reduction
– Even during the low interest decade, Kyokuto Kaihatsu Kogyo 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 Misc. Capital Goods industry using digital technology.
Lack of clear differentiation of Kyokuto Kaihatsu Kogyo products
– To increase the profitability and margins on the products, Kyokuto Kaihatsu Kogyo needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Kyokuto Kaihatsu Kogyo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kyokuto Kaihatsu Kogyo to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Kyokuto Kaihatsu Kogyo is just above the Misc. Capital Goods 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.
Kyokuto Kaihatsu Kogyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kyokuto Kaihatsu Kogyo are -
Manufacturing automation
– Kyokuto Kaihatsu Kogyo can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
Learning at scale
– Online learning technologies has now opened space for Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Kyokuto Kaihatsu Kogyo can develop new processes and procedures in Misc. Capital Goods 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kyokuto Kaihatsu Kogyo 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. Kyokuto Kaihatsu Kogyo 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.
Leveraging digital technologies
– Kyokuto Kaihatsu Kogyo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kyokuto Kaihatsu Kogyo can use these opportunities to build new business models that can help the communities that Kyokuto Kaihatsu Kogyo operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kyokuto Kaihatsu Kogyo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kyokuto Kaihatsu Kogyo 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
– Kyokuto Kaihatsu Kogyo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Kyokuto Kaihatsu Kogyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kyokuto Kaihatsu Kogyo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kyokuto Kaihatsu Kogyo in the Misc. Capital Goods industry. Now Kyokuto Kaihatsu Kogyo can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Kyokuto Kaihatsu Kogyo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Kyokuto Kaihatsu Kogyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo in the Misc. Capital Goods sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kyokuto Kaihatsu Kogyo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Stagnating economy with rate increase
– Kyokuto Kaihatsu Kogyo 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 Misc. Capital Goods industry.
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 dependence on third party suppliers
– Kyokuto Kaihatsu Kogyo 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.
Technology acceleration in Forth Industrial Revolution
– Kyokuto Kaihatsu Kogyo has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Kyokuto Kaihatsu Kogyo needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
Increasing wage structure of Kyokuto Kaihatsu Kogyo
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Kyokuto Kaihatsu Kogyo.
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 Kyokuto Kaihatsu Kogyo.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo prominent markets.
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. Kyokuto Kaihatsu Kogyo 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.
Environmental challenges
– Kyokuto Kaihatsu Kogyo 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. Kyokuto Kaihatsu Kogyo can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Consumer confidence and its impact on Kyokuto Kaihatsu Kogyo 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 Misc. Capital Goods industry and other sectors.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kyokuto Kaihatsu Kogyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Kyokuto Kaihatsu Kogyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo 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 Kyokuto Kaihatsu Kogyo needs to make to build a sustainable competitive advantage.