Riso Kyoiku Co Ltd (4714) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Riso Kyoiku Co Ltd (Japan)
Based on various researches at Oak Spring University , Riso Kyoiku Co Ltd is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing energy prices, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, there is backlash against globalization, etc
Introduction to SWOT Analysis of Riso Kyoiku Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Riso Kyoiku Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Riso Kyoiku Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Riso Kyoiku 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 Riso Kyoiku Co Ltd can be done for the following purposes –
1. Strategic planning of Riso Kyoiku Co Ltd
2. Improving business portfolio management of Riso Kyoiku Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Riso Kyoiku Co Ltd
Strengths of Riso Kyoiku Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Riso Kyoiku Co Ltd are -
High switching costs
– The high switching costs that Riso Kyoiku Co Ltd has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Riso Kyoiku Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Schools industry. Secondly the value chain collaborators of Riso Kyoiku Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For Riso Kyoiku Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Riso Kyoiku 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.
Cross disciplinary teams
– Horizontal connected teams at the Riso Kyoiku Co Ltd are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Schools industry
– Riso Kyoiku Co Ltd has clearly differentiated products in the market place. This has enabled Riso Kyoiku Co Ltd to fetch slight price premium compare to the competitors in the Schools industry. The sustainable margins have also helped Riso Kyoiku Co Ltd to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Riso Kyoiku Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Riso Kyoiku Co Ltd has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Riso Kyoiku 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 Schools 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.
Organizational Resilience of Riso Kyoiku Co Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Riso Kyoiku Co Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Riso Kyoiku Co Ltd comprises – understanding the underlying the factors in the Schools 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.
Learning organization
- Riso Kyoiku Co Ltd 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 Riso Kyoiku Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Riso Kyoiku Co Ltd emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Riso Kyoiku Co Ltd is one of the leading players in the Schools 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.
Diverse revenue streams
– Riso Kyoiku Co Ltd is present in almost all the verticals within the Schools industry. This has provided Riso Kyoiku 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.
Weaknesses of Riso Kyoiku Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Riso Kyoiku Co Ltd are -
Skills based hiring in Schools industry
– The stress on hiring functional specialists at Riso Kyoiku 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.
Ability to respond to the competition
– As the decision making is very deliberative at Riso Kyoiku Co Ltd, in the dynamic environment of Schools industry it has struggled to respond to the nimble upstart competition. Riso Kyoiku Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Riso Kyoiku 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 Schools industry using digital technology.
High operating costs
– Compare to the competitors, Riso Kyoiku Co Ltd has high operating costs in the Schools industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Riso Kyoiku Co Ltd lucrative customers.
Employees’ less understanding of Riso Kyoiku Co Ltd strategy
– From the outside it seems that the employees of Riso Kyoiku 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.
Slow decision making process
– As mentioned earlier in the report, Riso Kyoiku Co Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Schools industry over the last five years. Riso Kyoiku Co Ltd even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Riso Kyoiku Co Ltd is slow explore the new channels of communication. These new channels of communication can help Riso Kyoiku Co Ltd to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Riso Kyoiku Co Ltd has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on Riso Kyoiku Co Ltd ‘s star products
– The top 2 products and services of Riso Kyoiku Co Ltd still accounts for major business revenue. This dependence on star products in Schools industry has resulted into insufficient focus on developing new products, even though Riso Kyoiku Co Ltd has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Riso Kyoiku Co Ltd is just above the Schools 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 Riso Kyoiku Co Ltd is dominated by functional specialists. It is not different from other players in the Schools industry, but Riso Kyoiku Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Riso Kyoiku Co Ltd to focus more on services in the Schools industry rather than just following the product oriented approach.
Riso Kyoiku Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Riso Kyoiku Co Ltd are -
Using analytics as competitive advantage
– Riso Kyoiku Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled Riso Kyoiku Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Riso Kyoiku Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Riso Kyoiku 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Riso Kyoiku Co Ltd is facing challenges because of the dominance of functional experts in the organization. Riso Kyoiku Co Ltd can utilize new technology in the field of Schools industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Riso Kyoiku 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.
Buying journey improvements
– Riso Kyoiku Co Ltd can improve the customer journey of consumers in the Schools 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Schools industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Riso Kyoiku 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. Riso Kyoiku 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.
Creating value in data economy
– The success of analytics program of Riso Kyoiku Co Ltd has opened avenues for new revenue streams for the organization in Schools industry. This can help Riso Kyoiku Co Ltd to build a more holistic ecosystem for Riso Kyoiku Co Ltd products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, 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, Riso Kyoiku Co Ltd can use these opportunities to build new business models that can help the communities that Riso Kyoiku Co Ltd operates in. Secondly it can use opportunities from government spending in Schools sector.
Building a culture of innovation
– managers at Riso Kyoiku 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 Schools industry.
Loyalty marketing
– Riso Kyoiku 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.
Leveraging digital technologies
– Riso Kyoiku 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.
Developing new processes and practices
– Riso Kyoiku Co Ltd can develop new processes and procedures in Schools 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. Riso Kyoiku Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Riso Kyoiku Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Riso Kyoiku 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 Riso Kyoiku Co Ltd in the Schools sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Riso Kyoiku Co Ltd is facing in Schools sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Riso Kyoiku Co Ltd in Schools industry. The Schools 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.
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. Riso Kyoiku Co Ltd needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
Consumer confidence and its impact on Riso Kyoiku 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 Schools 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.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Riso Kyoiku 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.
Environmental challenges
– Riso Kyoiku 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. Riso Kyoiku Co Ltd can take advantage of this fund but it will also bring new competitors in the Schools industry.
Increasing wage structure of Riso Kyoiku Co Ltd
– 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 Riso Kyoiku Co Ltd.
Regulatory challenges
– Riso Kyoiku Co Ltd 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 Schools industry regulations.
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. Riso Kyoiku 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents Riso Kyoiku Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools 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.
Weighted SWOT Analysis of Riso Kyoiku Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Riso Kyoiku 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 Riso Kyoiku 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 Riso Kyoiku 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 Riso Kyoiku 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 Riso Kyoiku Co Ltd needs to make to build a sustainable competitive advantage.
