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 – there is backlash against globalization, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , geopolitical disruptions,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, 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 -
High brand equity
– Insource has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Insource to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Successful track record of launching new products
– Insource has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Insource 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.
Analytics focus
– Insource 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 Schools 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.
Cross disciplinary teams
– Horizontal connected teams at the Insource 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
– 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.
Learning organization
- Insource 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 Insource is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Insource emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
Weaknesses of Insource | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Insource are -
Slow to strategic competitive environment developments
– As Insource is one of the leading players in the Schools industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Schools industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Insource is slow explore the new channels of communication. These new channels of communication can help Insource to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Insource products
– To increase the profitability and margins on the products, Insource needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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 bargaining power of channel partners in Schools industry
– because of the regulatory requirements in Japan, Insource 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 Schools industry.
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 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.
Low market penetration in new markets
– Outside its home market of Japan, Insource needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Insource Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Insource are -
Using analytics as competitive advantage
– Insource has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled Insource to build a competitive advantage using analytics. The analytics driven competitive advantage can help Insource 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 Schools industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Insource in the Schools industry. Now Insource can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. Insource can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Insource 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 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.
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 Insource 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.
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.
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.
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.
Developing new processes and practices
– Insource can develop new processes and procedures in Schools 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.
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.
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.
Threats Insource External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Insource are -
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents Insource with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools sector.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Insource has witnessed rapid integration of technology during Covid-19 in the Schools industry. As one of the leading players in the industry, Insource needs to keep up with the evolution of technology in the Schools 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.
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.
Environmental challenges
– Insource 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. Insource can take advantage of this fund but it will also bring new competitors in the Schools industry.
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. Insource needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
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.
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.
