SWOT Analysis / TOWS Matrix for Taihei Dengyo Kaisha (Japan)
Based on various researches at Oak Spring University , Taihei Dengyo Kaisha is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing commodity prices, central banks are concerned over increasing inflation, technology disruption, increasing transportation and logistics costs, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing household debt because of falling income levels, geopolitical disruptions, etc
Introduction to SWOT Analysis of Taihei Dengyo Kaisha
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Taihei Dengyo Kaisha can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taihei Dengyo Kaisha, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha can be done for the following purposes –
1. Strategic planning of Taihei Dengyo Kaisha
2. Improving business portfolio management of Taihei Dengyo Kaisha
3. Assessing feasibility of the new initiative in Japan
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Taihei Dengyo Kaisha
Strengths of Taihei Dengyo Kaisha | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taihei Dengyo Kaisha are -
Highly skilled collaborators
– Taihei Dengyo Kaisha has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Taihei Dengyo Kaisha have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Taihei Dengyo Kaisha is one of the leading players in the Business Services 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.
Low bargaining power of suppliers
– Suppliers of Taihei Dengyo Kaisha in the Services sector have low bargaining power. Taihei Dengyo Kaisha has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taihei Dengyo Kaisha to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Taihei Dengyo Kaisha digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Taihei Dengyo Kaisha 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 Business Services industry
– Taihei Dengyo Kaisha has clearly differentiated products in the market place. This has enabled Taihei Dengyo Kaisha to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped Taihei Dengyo Kaisha to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Taihei Dengyo Kaisha comprises – understanding the underlying the factors in the Business Services 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.
Innovation driven organization
– Taihei Dengyo Kaisha is one of the most innovative firm in Business Services sector.
Ability to lead change in Business Services
– Taihei Dengyo Kaisha is one of the leading players in the Business Services industry in Japan. Over the years it has not only transformed the business landscape in the Business Services industry in Japan but also across the existing markets. The ability to lead change has enabled Taihei Dengyo Kaisha in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Taihei Dengyo Kaisha in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Taihei Dengyo Kaisha 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.
Cross disciplinary teams
– Horizontal connected teams at the Taihei Dengyo Kaisha 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.
Organizational Resilience of Taihei Dengyo Kaisha
– The covid-19 pandemic has put organizational resilience at the centre of everthing Taihei Dengyo Kaisha does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Taihei Dengyo Kaisha | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taihei Dengyo Kaisha are -
Capital Spending Reduction
– Even during the low interest decade, Taihei Dengyo Kaisha 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 Business Services industry using digital technology.
High dependence on Taihei Dengyo Kaisha ‘s star products
– The top 2 products and services of Taihei Dengyo Kaisha still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Taihei Dengyo Kaisha has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Taihei Dengyo Kaisha 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 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 Taihei Dengyo Kaisha supply chain. Even after few cautionary changes, Taihei Dengyo Kaisha is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taihei Dengyo Kaisha vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Japan, Taihei Dengyo Kaisha needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Taihei Dengyo Kaisha has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Taihei Dengyo Kaisha should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Taihei Dengyo Kaisha is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Taihei Dengyo Kaisha is slow explore the new channels of communication. These new channels of communication can help Taihei Dengyo Kaisha to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Taihei Dengyo Kaisha has a high cash cycle compare to other players in the Business Services 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 Taihei Dengyo Kaisha needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Taihei Dengyo Kaisha can leverage the sales team experience to cultivate customer relationships as Taihei Dengyo Kaisha is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Taihei Dengyo Kaisha has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Taihei Dengyo Kaisha 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.
Taihei Dengyo Kaisha Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Taihei Dengyo Kaisha are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Taihei Dengyo Kaisha can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Taihei Dengyo Kaisha to increase its market reach. Taihei Dengyo Kaisha 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.
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 Taihei Dengyo Kaisha 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Taihei Dengyo Kaisha 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. Taihei Dengyo Kaisha 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Taihei Dengyo Kaisha can use these opportunities to build new business models that can help the communities that Taihei Dengyo Kaisha operates in. Secondly it can use opportunities from government spending in Business Services sector.
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. Taihei Dengyo Kaisha can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha 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.
Building a culture of innovation
– managers at Taihei Dengyo Kaisha 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 Business Services industry.
Creating value in data economy
– The success of analytics program of Taihei Dengyo Kaisha has opened avenues for new revenue streams for the organization in Business Services industry. This can help Taihei Dengyo Kaisha to build a more holistic ecosystem for Taihei Dengyo Kaisha products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Taihei Dengyo Kaisha can use the latest technology developments to improve its manufacturing and designing process in Business Services 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Taihei Dengyo Kaisha in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Threats Taihei Dengyo Kaisha External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Taihei Dengyo Kaisha are -
Increasing wage structure of Taihei Dengyo Kaisha
– 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 Taihei Dengyo Kaisha.
Regulatory challenges
– Taihei Dengyo Kaisha 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 Business Services industry regulations.
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 Taihei Dengyo Kaisha.
Consumer confidence and its impact on Taihei Dengyo Kaisha 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 Business Services industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Taihei Dengyo Kaisha in Business Services industry. The Business Services 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.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Taihei Dengyo Kaisha can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Taihei Dengyo Kaisha has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Taihei Dengyo Kaisha needs to keep up with the evolution of technology in the Business Services 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Taihei Dengyo Kaisha is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Taihei Dengyo Kaisha in the Business Services sector and impact the bottomline of the organization.
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. Taihei Dengyo Kaisha 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
– Taihei Dengyo Kaisha 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. Taihei Dengyo Kaisha can take advantage of this fund but it will also bring new competitors in the Business Services industry.
Weighted SWOT Analysis of Taihei Dengyo Kaisha Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha 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 Taihei Dengyo Kaisha needs to make to build a sustainable competitive advantage.