SWOT Analysis / TOWS Matrix for Mitsui Soko Holdings (Japan)
Based on various researches at Oak Spring University , Mitsui Soko Holdings is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Mitsui Soko Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mitsui Soko Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mitsui Soko Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mitsui Soko Holdings 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 Mitsui Soko Holdings can be done for the following purposes –
1. Strategic planning of Mitsui Soko Holdings
2. Improving business portfolio management of Mitsui Soko Holdings
3. Assessing feasibility of the new initiative in Japan
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mitsui Soko Holdings
Strengths of Mitsui Soko Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mitsui Soko Holdings are -
Sustainable margins compare to other players in Trucking industry
– Mitsui Soko Holdings has clearly differentiated products in the market place. This has enabled Mitsui Soko Holdings to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped Mitsui Soko Holdings to invest into research and development (R&D) and innovation.
Innovation driven organization
– Mitsui Soko Holdings is one of the most innovative firm in Trucking sector.
Analytics focus
– Mitsui Soko Holdings 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 Trucking 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.
High brand equity
– Mitsui Soko Holdings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mitsui Soko Holdings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Mitsui Soko Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Mitsui Soko Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Trucking
– Mitsui Soko Holdings is one of the leading players in the Trucking industry in Japan. Over the years it has not only transformed the business landscape in the Trucking industry in Japan but also across the existing markets. The ability to lead change has enabled Mitsui Soko Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Mitsui Soko Holdings is present in almost all the verticals within the Trucking industry. This has provided Mitsui Soko Holdings 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.
Ability to recruit top talent
– Mitsui Soko Holdings is one of the leading players in the Trucking 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.
Training and development
– Mitsui Soko Holdings has one of the best training and development program in Transportation 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.
Highly skilled collaborators
– Mitsui Soko Holdings has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Mitsui Soko Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mitsui Soko Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mitsui Soko Holdings staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Mitsui Soko Holdings comprises – understanding the underlying the factors in the Trucking 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.
Weaknesses of Mitsui Soko Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mitsui Soko Holdings are -
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, Mitsui Soko Holdings needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mitsui Soko Holdings is slow explore the new channels of communication. These new channels of communication can help Mitsui Soko Holdings to provide better information regarding Trucking products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Mitsui Soko Holdings, it seems that company is thinking out the frontier risks that can impact Trucking 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.
Capital Spending Reduction
– Even during the low interest decade, Mitsui Soko Holdings 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 Trucking industry using digital technology.
High dependence on Mitsui Soko Holdings ‘s star products
– The top 2 products and services of Mitsui Soko Holdings still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though Mitsui Soko Holdings has relatively successful track record of launching new products.
Employees’ less understanding of Mitsui Soko Holdings strategy
– From the outside it seems that the employees of Mitsui Soko Holdings 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.
Ability to respond to the competition
– As the decision making is very deliberative at Mitsui Soko Holdings, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. Mitsui Soko Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Mitsui Soko Holdings 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 Mitsui Soko Holdings is one of the leading players in the Trucking industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Trucking industry in last five years.
High cash cycle compare to competitors
Mitsui Soko Holdings has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Mitsui Soko Holdings 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.
Mitsui Soko Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mitsui Soko Holdings are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mitsui Soko Holdings 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 Mitsui Soko Holdings to hire the very best people irrespective of their geographical location.
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. Mitsui Soko Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mitsui Soko Holdings in the Trucking industry. Now Mitsui Soko Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Mitsui Soko Holdings has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled Mitsui Soko Holdings to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mitsui Soko Holdings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mitsui Soko Holdings 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. Mitsui Soko Holdings 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, Mitsui Soko Holdings can use these opportunities to build new business models that can help the communities that Mitsui Soko Holdings operates in. Secondly it can use opportunities from government spending in Trucking sector.
Building a culture of innovation
– managers at Mitsui Soko Holdings 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 Trucking industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mitsui Soko Holdings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Mitsui Soko Holdings has opened avenues for new revenue streams for the organization in Trucking industry. This can help Mitsui Soko Holdings to build a more holistic ecosystem for Mitsui Soko Holdings products in the Trucking 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 Mitsui Soko Holdings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Mitsui Soko Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Mitsui Soko Holdings 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.
Developing new processes and practices
– Mitsui Soko Holdings can develop new processes and procedures in Trucking 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 Mitsui Soko Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mitsui Soko Holdings are -
Shortening product life cycle
– it is one of the major threat that Mitsui Soko Holdings is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Mitsui Soko Holdings 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.
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 Mitsui Soko Holdings.
Technology acceleration in Forth Industrial Revolution
– Mitsui Soko Holdings has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Mitsui Soko Holdings needs to keep up with the evolution of technology in the Trucking 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.
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. Mitsui Soko Holdings 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Mitsui Soko Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mitsui Soko Holdings 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
– Mitsui Soko Holdings 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. Mitsui Soko Holdings can take advantage of this fund but it will also bring new competitors in the Trucking 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 Mitsui Soko Holdings in the Trucking sector and impact the bottomline of the organization.
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 Mitsui Soko Holdings business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mitsui Soko Holdings 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 Mitsui Soko Holdings prominent markets.
Increasing wage structure of Mitsui Soko Holdings
– 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 Mitsui Soko Holdings.
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.
Weighted SWOT Analysis of Mitsui Soko Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mitsui Soko Holdings 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 Mitsui Soko Holdings 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 Mitsui Soko Holdings 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 Mitsui Soko Holdings 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 Mitsui Soko Holdings needs to make to build a sustainable competitive advantage.