SWOT Analysis / TOWS Matrix for Daiken Corp (Japan)
Based on various researches at Oak Spring University , Daiken Corp is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daiken Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daiken Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daiken Corp 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 Daiken Corp can be done for the following purposes –
1. Strategic planning of Daiken Corp
2. Improving business portfolio management of Daiken Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daiken Corp
Strengths of Daiken Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daiken Corp are -
Diverse revenue streams
– Daiken Corp is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Daiken Corp 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.
Operational resilience
– The operational resilience strategy of Daiken Corp comprises – understanding the underlying the factors in the Forestry & Wood Products 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.
Strong track record of project management in the Forestry & Wood Products industry
– Daiken Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Daiken Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daiken Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Daiken Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daiken Corp staying ahead in the Forestry & Wood Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Daiken Corp in the Basic Materials sector have low bargaining power. Daiken Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daiken Corp to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Daiken Corp 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.
Innovation driven organization
– Daiken Corp is one of the most innovative firm in Forestry & Wood Products sector.
High switching costs
– The high switching costs that Daiken Corp 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.
Learning organization
- Daiken Corp 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 Daiken Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daiken Corp emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Daiken Corp is one of the leading players in the Forestry & Wood Products 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.
Analytics focus
– Daiken Corp 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 Forestry & Wood Products 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.
Weaknesses of Daiken Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daiken Corp are -
Skills based hiring in Forestry & Wood Products industry
– The stress on hiring functional specialists at Daiken Corp 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.
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 Daiken Corp supply chain. Even after few cautionary changes, Daiken Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daiken Corp vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Daiken Corp has a high cash cycle compare to other players in the Forestry & Wood Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at Daiken Corp, in the dynamic environment of Forestry & Wood Products industry it has struggled to respond to the nimble upstart competition. Daiken Corp 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, Daiken Corp 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 Forestry & Wood Products industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Daiken Corp, it seems that company is thinking out the frontier risks that can impact Forestry & Wood Products industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, Daiken Corp has high operating costs in the Forestry & Wood Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Daiken Corp lucrative customers.
High bargaining power of channel partners in Forestry & Wood Products industry
– because of the regulatory requirements in Japan, Daiken Corp is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Forestry & Wood Products industry.
Compensation and incentives
– The revenue per employee of Daiken Corp is just above the Forestry & Wood Products 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.
Lack of clear differentiation of Daiken Corp products
– To increase the profitability and margins on the products, Daiken Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Daiken Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Forestry & Wood Products industry have deep experience in developing customer relationships. Marketing department at Daiken Corp can leverage the sales team experience to cultivate customer relationships as Daiken Corp is planning to shift buying processes online.
Daiken Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daiken Corp are -
Loyalty marketing
– Daiken Corp 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.
Building a culture of innovation
– managers at Daiken Corp 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 Forestry & Wood Products industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Forestry & Wood Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daiken Corp 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. Daiken Corp 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.
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 Daiken Corp 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.
Leveraging digital technologies
– Daiken Corp 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.
Using analytics as competitive advantage
– Daiken Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled Daiken Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daiken Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Daiken Corp to increase its market reach. Daiken Corp 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.
Developing new processes and practices
– Daiken Corp can develop new processes and procedures in Forestry & Wood Products 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daiken Corp 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 Daiken Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Daiken Corp 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 Daiken Corp 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
– Daiken Corp can improve the customer journey of consumers in the Forestry & Wood Products 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daiken Corp 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 Daiken Corp to hire the very best people irrespective of their geographical location.
Threats Daiken Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daiken Corp are -
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 Daiken Corp.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Forestry & Wood Products industry are lowering. It can presents Daiken Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Forestry & Wood Products sector.
Increasing wage structure of Daiken Corp
– 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 Daiken Corp.
Environmental challenges
– Daiken Corp 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. Daiken Corp can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
Stagnating economy with rate increase
– Daiken Corp 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 Forestry & Wood Products industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daiken Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Forestry & Wood Products sector.
Shortening product life cycle
– it is one of the major threat that Daiken Corp is facing in Forestry & Wood Products 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 Daiken Corp in the Forestry & Wood Products sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daiken Corp 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 Daiken Corp prominent markets.
Easy access to finance
– Easy access to finance in Forestry & Wood Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daiken Corp 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
– Daiken Corp has witnessed rapid integration of technology during Covid-19 in the Forestry & Wood Products industry. As one of the leading players in the industry, Daiken Corp needs to keep up with the evolution of technology in the Forestry & Wood Products 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.
Regulatory challenges
– Daiken Corp 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 Forestry & Wood Products 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. Daiken Corp 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.
Weighted SWOT Analysis of Daiken Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daiken Corp 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 Daiken Corp 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 Daiken Corp 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 Daiken Corp 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 Daiken Corp needs to make to build a sustainable competitive advantage.