Riken Keiki Co Ltd (7734) SWOT Analysis / TOWS Matrix / MBA Resources
Scientific & Technical Instr.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Riken Keiki Co Ltd (Japan)
Based on various researches at Oak Spring University , Riken Keiki Co Ltd is operating in a macro-environment that has been destablized by – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, wage bills are increasing, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Riken Keiki Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Riken Keiki Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Riken Keiki Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Riken Keiki 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 Riken Keiki Co Ltd can be done for the following purposes –
1. Strategic planning of Riken Keiki Co Ltd
2. Improving business portfolio management of Riken Keiki Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Riken Keiki Co Ltd
Strengths of Riken Keiki Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Riken Keiki Co Ltd are -
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Riken Keiki Co Ltd has clearly differentiated products in the market place. This has enabled Riken Keiki Co Ltd to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Riken Keiki Co Ltd to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Riken Keiki Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Riken Keiki 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.
Digital Transformation in Scientific & Technical Instr. industry
- digital transformation varies from industry to industry. For Riken Keiki Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Riken Keiki 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.
Learning organization
- Riken Keiki 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 Riken Keiki Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Riken Keiki Co Ltd emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Riken Keiki Co Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Riken Keiki Co Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Riken Keiki 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
– Riken Keiki 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 Scientific & Technical Instr. industry. Secondly the value chain collaborators of Riken Keiki Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Riken Keiki Co Ltd has one of the best training and development program in Technology industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Riken Keiki Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Riken Keiki Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Riken Keiki Co Ltd is one of the most innovative firm in Scientific & Technical Instr. sector.
Diverse revenue streams
– Riken Keiki Co Ltd is present in almost all the verticals within the Scientific & Technical Instr. industry. This has provided Riken Keiki 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.
Low bargaining power of suppliers
– Suppliers of Riken Keiki Co Ltd in the Technology sector have low bargaining power. Riken Keiki Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Riken Keiki Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Riken Keiki Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Riken Keiki Co Ltd are -
Skills based hiring in Scientific & Technical Instr. industry
– The stress on hiring functional specialists at Riken Keiki 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.
Slow to strategic competitive environment developments
– As Riken Keiki Co Ltd is one of the leading players in the Scientific & Technical Instr. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Scientific & Technical Instr. industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Riken Keiki 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 Scientific & Technical Instr. industry using digital technology.
Interest costs
– Compare to the competition, Riken Keiki 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 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 Riken Keiki Co Ltd supply chain. Even after few cautionary changes, Riken Keiki Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Riken Keiki Co Ltd vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Riken Keiki Co Ltd is just above the Scientific & Technical Instr. 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.
High cash cycle compare to competitors
Riken Keiki Co Ltd has a high cash cycle compare to other players in the Scientific & Technical Instr. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in Japan, Riken Keiki Co Ltd 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 Scientific & Technical Instr. industry.
High dependence on Riken Keiki Co Ltd ‘s star products
– The top 2 products and services of Riken Keiki Co Ltd still accounts for major business revenue. This dependence on star products in Scientific & Technical Instr. industry has resulted into insufficient focus on developing new products, even though Riken Keiki Co Ltd has relatively successful track record of launching new products.
Products dominated business model
– Even though Riken Keiki Co Ltd has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Riken Keiki Co Ltd should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Riken Keiki Co Ltd, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. Riken Keiki Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Riken Keiki Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Riken Keiki Co Ltd are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Riken Keiki Co Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Scientific & Technical Instr. industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Riken Keiki Co Ltd 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 Riken Keiki 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 Scientific & Technical Instr. industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Riken Keiki Co Ltd is facing challenges because of the dominance of functional experts in the organization. Riken Keiki Co Ltd can utilize new technology in the field of Scientific & Technical Instr. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Riken Keiki Co Ltd can improve the customer journey of consumers in the Scientific & Technical Instr. 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.
Leveraging digital technologies
– Riken Keiki 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Riken Keiki Co Ltd 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.
Creating value in data economy
– The success of analytics program of Riken Keiki Co Ltd has opened avenues for new revenue streams for the organization in Scientific & Technical Instr. industry. This can help Riken Keiki Co Ltd to build a more holistic ecosystem for Riken Keiki Co Ltd products in the Scientific & Technical Instr. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Riken Keiki 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.
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 Riken Keiki 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Riken Keiki Co Ltd 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 Riken Keiki Co Ltd to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Riken Keiki 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Riken Keiki 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. Riken Keiki 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.
Threats Riken Keiki Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Riken Keiki Co Ltd are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Riken Keiki Co Ltd in Scientific & Technical Instr. industry. The Scientific & Technical Instr. 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.
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 Riken Keiki Co Ltd in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Riken Keiki Co Ltd has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Riken Keiki Co Ltd needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
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. Riken Keiki Co Ltd needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Riken Keiki Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Scientific & Technical Instr. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Riken Keiki 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.
Shortening product life cycle
– it is one of the major threat that Riken Keiki Co Ltd is facing in Scientific & Technical Instr. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Riken Keiki 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 Scientific & Technical Instr. industry and other sectors.
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. Riken Keiki 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.
Stagnating economy with rate increase
– Riken Keiki Co Ltd 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 Scientific & Technical Instr. 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.
Increasing wage structure of Riken Keiki 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 Riken Keiki Co Ltd.
High dependence on third party suppliers
– Riken Keiki Co Ltd 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.
Weighted SWOT Analysis of Riken Keiki Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Riken Keiki 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 Riken Keiki 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 Riken Keiki 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 Riken Keiki 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 Riken Keiki Co Ltd needs to make to build a sustainable competitive advantage.
