Insource (6200) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Insource (Japan)
Based on various researches at Oak Spring University , Insource is operating in a macro-environment that has been destablized by – technology disruption, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing transportation and logistics costs, increasing household debt because of falling income levels, there is increasing trade war between United States & China,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Insource can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Insource, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Insource 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 Insource can be done for the following purposes –
1. Strategic planning of Insource
2. Improving business portfolio management of Insource
3. Assessing feasibility of the new initiative in Japan
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Insource
Strengths of Insource | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Insource are -
Ability to lead change in Schools
– Insource is one of the leading players in the Schools industry in Japan. Over the years it has not only transformed the business landscape in the Schools industry in Japan but also across the existing markets. The ability to lead change has enabled Insource in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Insource in the Services sector have low bargaining power. Insource has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Insource to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Insource 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.
Innovation driven organization
– Insource is one of the most innovative firm in Schools sector.
Effective Research and Development (R&D)
– Insource has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Insource staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Insource is present in almost all the verticals within the Schools industry. This has provided Insource 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 Insource
– The covid-19 pandemic has put organizational resilience at the centre of everthing Insource does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Insource is one of the leading players in the Schools 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.
Strong track record of project management in the Schools industry
– Insource is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Insource in Schools industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Insource has one of the best training and development program in Services 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.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For Insource digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Insource 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.
Weaknesses of Insource | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Insource are -
Ability to respond to the competition
– As the decision making is very deliberative at Insource, in the dynamic environment of Schools industry it has struggled to respond to the nimble upstart competition. Insource has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Insource is just above the Schools 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 dependence on Insource ‘s star products
– The top 2 products and services of Insource still accounts for major business revenue. This dependence on star products in Schools industry has resulted into insufficient focus on developing new products, even though Insource has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Insource needs to have more collaboration between its sales team and marketing team. Sales professionals in the Schools industry have deep experience in developing customer relationships. Marketing department at Insource can leverage the sales team experience to cultivate customer relationships as Insource is planning to shift buying processes online.
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 Insource supply chain. Even after few cautionary changes, Insource is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Insource vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Insource has high operating costs in the Schools industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Insource lucrative customers.
Products dominated business model
– Even though Insource has some of the most successful models in the Schools industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Insource should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Insource 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.
Increasing silos among functional specialists
– The organizational structure of Insource is dominated by functional specialists. It is not different from other players in the Schools industry, but Insource needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Insource to focus more on services in the Schools industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Insource has a high cash cycle compare to other players in the Schools industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Insource strategy
– From the outside it seems that the employees of Insource 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.
Insource Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Insource are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Insource 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 Insource to increase its market reach. Insource 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.
Building a culture of innovation
– managers at Insource 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 Schools industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Insource is facing challenges because of the dominance of functional experts in the organization. Insource can utilize new technology in the field of Schools industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Schools industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Insource 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. Insource 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.
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. Insource can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Insource can improve the customer journey of consumers in the Schools 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.
Manufacturing automation
– Insource can use the latest technology developments to improve its manufacturing and designing process in Schools 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.
Loyalty marketing
– Insource 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Insource 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 Insource to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Insource can use these opportunities to build new business models that can help the communities that Insource operates in. Secondly it can use opportunities from government spending in Schools sector.
Creating value in data economy
– The success of analytics program of Insource has opened avenues for new revenue streams for the organization in Schools industry. This can help Insource to build a more holistic ecosystem for Insource products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Insource 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.
Threats Insource External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Insource are -
Shortening product life cycle
– it is one of the major threat that Insource is facing in Schools sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Insource.
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.
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. Insource 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.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Insource can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Insource 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 Schools industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Insource in Schools industry. The Schools 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Insource may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Schools sector.
High dependence on third party suppliers
– Insource 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.
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 Insource in the Schools sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Insource 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 Schools industry.
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 Insource business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Insource Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Insource 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 Insource 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 Insource 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 Insource 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 Insource needs to make to build a sustainable competitive advantage.