Bank of The Ryukyus (8399) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Bank of The Ryukyus (Japan)
Based on various researches at Oak Spring University , Bank of The Ryukyus is operating in a macro-environment that has been destablized by – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Bank of The Ryukyus
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bank of The Ryukyus can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank of The Ryukyus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank of The Ryukyus 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 Bank of The Ryukyus can be done for the following purposes –
1. Strategic planning of Bank of The Ryukyus
2. Improving business portfolio management of Bank of The Ryukyus
3. Assessing feasibility of the new initiative in Japan
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bank of The Ryukyus
Strengths of Bank of The Ryukyus | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank of The Ryukyus are -
High brand equity
– Bank of The Ryukyus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bank of The Ryukyus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Regional Banks
– Bank of The Ryukyus is one of the leading players in the Regional Banks industry in Japan. Over the years it has not only transformed the business landscape in the Regional Banks industry in Japan but also across the existing markets. The ability to lead change has enabled Bank of The Ryukyus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Bank of The Ryukyus is present in almost all the verticals within the Regional Banks industry. This has provided Bank of The Ryukyus 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.
Organizational Resilience of Bank of The Ryukyus
– The covid-19 pandemic has put organizational resilience at the centre of everthing Bank of The Ryukyus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Bank of The Ryukyus is one of the most innovative firm in Regional Banks sector.
Low bargaining power of suppliers
– Suppliers of Bank of The Ryukyus in the Financial sector have low bargaining power. Bank of The Ryukyus has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank of The Ryukyus to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Regional Banks industry
– Bank of The Ryukyus has clearly differentiated products in the market place. This has enabled Bank of The Ryukyus to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped Bank of The Ryukyus to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Bank of The Ryukyus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank of The Ryukyus 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.
Highly skilled collaborators
– Bank of The Ryukyus has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Regional Banks industry. Secondly the value chain collaborators of Bank of The Ryukyus have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Bank of The Ryukyus 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 Regional Banks 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.
Training and development
– Bank of The Ryukyus has one of the best training and development program in Financial 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.
Cross disciplinary teams
– Horizontal connected teams at the Bank of The Ryukyus 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.
Weaknesses of Bank of The Ryukyus | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank of The Ryukyus are -
Low market penetration in new markets
– Outside its home market of Japan, Bank of The Ryukyus needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Bank of The Ryukyus is just above the Regional Banks 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.
Aligning sales with marketing
– From the outside it seems that Bank of The Ryukyus needs to have more collaboration between its sales team and marketing team. Sales professionals in the Regional Banks industry have deep experience in developing customer relationships. Marketing department at Bank of The Ryukyus can leverage the sales team experience to cultivate customer relationships as Bank of The Ryukyus is planning to shift buying processes online.
Need for greater diversity
– Bank of The Ryukyus has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Bank of The Ryukyus 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 Regional Banks industry using digital technology.
High bargaining power of channel partners in Regional Banks industry
– because of the regulatory requirements in Japan, Bank of The Ryukyus 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 Regional Banks industry.
Interest costs
– Compare to the competition, Bank of The Ryukyus 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.
Increasing silos among functional specialists
– The organizational structure of Bank of The Ryukyus is dominated by functional specialists. It is not different from other players in the Regional Banks industry, but Bank of The Ryukyus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bank of The Ryukyus to focus more on services in the Regional Banks industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bank of The Ryukyus is slow explore the new channels of communication. These new channels of communication can help Bank of The Ryukyus to provide better information regarding Regional Banks products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Bank of The Ryukyus has a high cash cycle compare to other players in the Regional Banks 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 operating costs
– Compare to the competitors, Bank of The Ryukyus has high operating costs in the Regional Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bank of The Ryukyus lucrative customers.
Bank of The Ryukyus Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Bank of The Ryukyus are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bank of The Ryukyus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Bank of The Ryukyus has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Regional Banks sector. This continuous investment in analytics has enabled Bank of The Ryukyus to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bank of The Ryukyus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Regional Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bank of The Ryukyus in the Regional Banks industry. Now Bank of The Ryukyus can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Bank of The Ryukyus 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bank of The Ryukyus is facing challenges because of the dominance of functional experts in the organization. Bank of The Ryukyus can utilize new technology in the field of Regional Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Bank of The Ryukyus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Bank of The Ryukyus 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.
Manufacturing automation
– Bank of The Ryukyus can use the latest technology developments to improve its manufacturing and designing process in Regional Banks 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.
Creating value in data economy
– The success of analytics program of Bank of The Ryukyus has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Bank of The Ryukyus to build a more holistic ecosystem for Bank of The Ryukyus products in the Regional Banks 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, Bank of The Ryukyus can use these opportunities to build new business models that can help the communities that Bank of The Ryukyus operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Better consumer reach
– The expansion of the 5G network will help Bank of The Ryukyus to increase its market reach. Bank of The Ryukyus 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bank of The Ryukyus 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 Bank of The Ryukyus to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Bank of The Ryukyus can develop new processes and procedures in Regional Banks 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.
Threats Bank of The Ryukyus External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Bank of The Ryukyus are -
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 Regional Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bank of The Ryukyus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bank of The Ryukyus 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 Bank of The Ryukyus prominent markets.
Environmental challenges
– Bank of The Ryukyus 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. Bank of The Ryukyus can take advantage of this fund but it will also bring new competitors in the Regional Banks 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.
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. Bank of The Ryukyus 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
– Bank of The Ryukyus 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 Regional Banks industry.
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 Bank of The Ryukyus in the Regional Banks sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Bank of The Ryukyus is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Bank of The Ryukyus needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Bank of The Ryukyus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks sector.
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 Bank of The Ryukyus.
Technology acceleration in Forth Industrial Revolution
– Bank of The Ryukyus has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, Bank of The Ryukyus needs to keep up with the evolution of technology in the Regional Banks 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.
Weighted SWOT Analysis of Bank of The Ryukyus Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bank of The Ryukyus 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 Bank of The Ryukyus 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 Bank of The Ryukyus 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 Bank of The Ryukyus 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 Bank of The Ryukyus needs to make to build a sustainable competitive advantage.
