Kasai Kogyo Co Ltd (7256) SWOT Analysis / TOWS Matrix / MBA Resources
Textiles - Non Apparel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Kasai Kogyo Co Ltd (Japan)
Based on various researches at Oak Spring University , Kasai Kogyo Co Ltd is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, technology disruption, cloud computing is disrupting traditional business models, wage bills are increasing,
increasing transportation and logistics costs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Kasai Kogyo Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kasai Kogyo Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kasai Kogyo Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kasai Kogyo 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 Kasai Kogyo Co Ltd can be done for the following purposes –
1. Strategic planning of Kasai Kogyo Co Ltd
2. Improving business portfolio management of Kasai Kogyo Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kasai Kogyo Co Ltd
Strengths of Kasai Kogyo Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kasai Kogyo Co Ltd are -
Low bargaining power of suppliers
– Suppliers of Kasai Kogyo Co Ltd in the Consumer Cyclical sector have low bargaining power. Kasai Kogyo Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kasai Kogyo Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Kasai Kogyo Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kasai Kogyo 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.
Analytics focus
– Kasai Kogyo Co Ltd 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 Textiles - Non Apparel 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.
Effective Research and Development (R&D)
– Kasai Kogyo Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kasai Kogyo Co Ltd staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Kasai Kogyo Co Ltd is one of the most innovative firm in Textiles - Non Apparel sector.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Kasai Kogyo Co Ltd has clearly differentiated products in the market place. This has enabled Kasai Kogyo Co Ltd to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Kasai Kogyo Co Ltd to invest into research and development (R&D) and innovation.
High brand equity
– Kasai Kogyo Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kasai Kogyo Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Kasai Kogyo Co Ltd comprises – understanding the underlying the factors in the Textiles - Non Apparel 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.
Ability to lead change in Textiles - Non Apparel
– Kasai Kogyo Co Ltd is one of the leading players in the Textiles - Non Apparel industry in Japan. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in Japan but also across the existing markets. The ability to lead change has enabled Kasai Kogyo Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Kasai Kogyo 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.
Organizational Resilience of Kasai Kogyo Co Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kasai Kogyo Co Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Kasai Kogyo Co Ltd has one of the best training and development program in Consumer Cyclical 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.
Weaknesses of Kasai Kogyo Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kasai Kogyo Co Ltd are -
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Kasai Kogyo 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.
Products dominated business model
– Even though Kasai Kogyo Co Ltd has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kasai Kogyo Co Ltd should strive to include more intangible value offerings along with its core products and services.
High dependence on Kasai Kogyo Co Ltd ‘s star products
– The top 2 products and services of Kasai Kogyo Co Ltd still accounts for major business revenue. This dependence on star products in Textiles - Non Apparel industry has resulted into insufficient focus on developing new products, even though Kasai Kogyo Co Ltd has relatively successful track record of launching new products.
Lack of clear differentiation of Kasai Kogyo Co Ltd products
– To increase the profitability and margins on the products, Kasai Kogyo Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kasai Kogyo Co Ltd is slow explore the new channels of communication. These new channels of communication can help Kasai Kogyo Co Ltd to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Kasai Kogyo Co Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Textiles - Non Apparel industry over the last five years. Kasai Kogyo Co Ltd even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the Textiles - Non Apparel industry, Kasai Kogyo Co Ltd 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.
Ability to respond to the competition
– As the decision making is very deliberative at Kasai Kogyo Co Ltd, in the dynamic environment of Textiles - Non Apparel industry it has struggled to respond to the nimble upstart competition. Kasai Kogyo Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Textiles - Non Apparel industry
– because of the regulatory requirements in Japan, Kasai Kogyo 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 Textiles - Non Apparel industry.
Interest costs
– Compare to the competition, Kasai Kogyo 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.
Increasing silos among functional specialists
– The organizational structure of Kasai Kogyo Co Ltd is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Kasai Kogyo Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kasai Kogyo Co Ltd to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
Kasai Kogyo Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kasai Kogyo Co Ltd are -
Developing new processes and practices
– Kasai Kogyo Co Ltd can develop new processes and procedures in Textiles - Non Apparel 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.
Leveraging digital technologies
– Kasai Kogyo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kasai Kogyo 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kasai Kogyo 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. Kasai Kogyo 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Kasai Kogyo Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Kasai Kogyo Co Ltd can improve the customer journey of consumers in the Textiles - Non Apparel 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kasai Kogyo 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 Kasai Kogyo Co Ltd to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kasai Kogyo Co Ltd can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Kasai Kogyo Co Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Kasai Kogyo Co Ltd has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Kasai Kogyo Co Ltd to build a more holistic ecosystem for Kasai Kogyo Co Ltd products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kasai Kogyo Co Ltd is facing challenges because of the dominance of functional experts in the organization. Kasai Kogyo Co Ltd can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kasai Kogyo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kasai Kogyo Co Ltd can use these opportunities to build new business models that can help the communities that Kasai Kogyo Co Ltd operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kasai Kogyo 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 Textiles - Non Apparel industry, and it will provide faster access to the consumers.
Threats Kasai Kogyo Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kasai Kogyo 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 Kasai Kogyo Co Ltd in Textiles - Non Apparel industry. The Textiles - Non Apparel 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 Kasai Kogyo Co Ltd in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Kasai Kogyo 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 Textiles - Non Apparel industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kasai Kogyo Co Ltd 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 Kasai Kogyo Co Ltd prominent markets.
Increasing wage structure of Kasai Kogyo 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 Kasai Kogyo Co Ltd.
Technology acceleration in Forth Industrial Revolution
– Kasai Kogyo Co Ltd has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Kasai Kogyo Co Ltd needs to keep up with the evolution of technology in the Textiles - Non Apparel 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kasai Kogyo Co Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
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.
Consumer confidence and its impact on Kasai Kogyo 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 Textiles - Non Apparel 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. Kasai Kogyo 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.
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.
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. Kasai Kogyo Co Ltd needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
Environmental challenges
– Kasai Kogyo Co Ltd 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. Kasai Kogyo Co Ltd can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
Weighted SWOT Analysis of Kasai Kogyo Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kasai Kogyo 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 Kasai Kogyo 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 Kasai Kogyo 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 Kasai Kogyo 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 Kasai Kogyo Co Ltd needs to make to build a sustainable competitive advantage.