IBJ (6071) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for IBJ (Japan)

Based on various researches at Oak Spring University , IBJ is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing commodity prices, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, etc

---

---

---

---

Introduction to SWOT Analysis of IBJ

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that IBJ can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the IBJ, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which IBJ 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 IBJ can be done for the following purposes –
1. Strategic planning of IBJ
2. Improving business portfolio management of IBJ
3. Assessing feasibility of the new initiative in Japan
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of IBJ

---

Strengths of IBJ | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of IBJ are -

Diverse revenue streams

– IBJ is present in almost all the verticals within the Personal Services industry. This has provided IBJ 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.

Low bargaining power of suppliers

– Suppliers of IBJ in the Services sector have low bargaining power. IBJ has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps IBJ to manage not only supply disruptions but also source products at highly competitive prices.

Organizational Resilience of IBJ

– The covid-19 pandemic has put organizational resilience at the centre of everthing IBJ does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Successful track record of launching new products

– IBJ has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. IBJ 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.

Superior customer experience

– The customer experience strategy of IBJ in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Learning organization

- IBJ 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 IBJ is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at IBJ emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– IBJ has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of IBJ have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the IBJ 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.

High brand equity

– IBJ has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled IBJ to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Personal Services

– IBJ is one of the leading players in the Personal Services industry in Japan. Over the years it has not only transformed the business landscape in the Personal Services industry in Japan but also across the existing markets. The ability to lead change has enabled IBJ in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– IBJ is one of the leading players in the Personal Services 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.

Analytics focus

– IBJ 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 Personal Services 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.

---

---

Weaknesses of IBJ | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of IBJ are -

Products dominated business model

– Even though IBJ has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. IBJ should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, IBJ is slow explore the new channels of communication. These new channels of communication can help IBJ to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.

Slow to strategic competitive environment developments

– As IBJ is one of the leading players in the Personal Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Personal Services industry in last five years.

High bargaining power of channel partners in Personal Services industry

– because of the regulatory requirements in Japan, IBJ 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 Personal Services industry.

Low market penetration in new markets

– Outside its home market of Japan, IBJ needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow decision making process

– As mentioned earlier in the report, IBJ has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal Services industry over the last five years. IBJ 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.

Interest costs

– Compare to the competition, IBJ 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.

Compensation and incentives

– The revenue per employee of IBJ is just above the Personal Services 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 IBJ needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal Services industry have deep experience in developing customer relationships. Marketing department at IBJ can leverage the sales team experience to cultivate customer relationships as IBJ 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 IBJ supply chain. Even after few cautionary changes, IBJ is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left IBJ vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

– The organizational structure of IBJ is dominated by functional specialists. It is not different from other players in the Personal Services industry, but IBJ needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help IBJ to focus more on services in the Personal Services industry rather than just following the product oriented approach.

---

IBJ Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of IBJ are -

Leveraging digital technologies

– IBJ 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.

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. IBJ can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– IBJ can develop new processes and procedures in Personal Services 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.

Loyalty marketing

– IBJ 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.

Better consumer reach

– The expansion of the 5G network will help IBJ to increase its market reach. IBJ 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 IBJ 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 Personal Services industry.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, IBJ 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 IBJ to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Use of Bitcoin and other crypto currencies for transactions in Personal Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for IBJ in the Personal Services industry. Now IBJ can target international markets with far fewer capital restrictions requirements than the existing system.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects IBJ can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, IBJ is facing challenges because of the dominance of functional experts in the organization. IBJ can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Creating value in data economy

– The success of analytics program of IBJ has opened avenues for new revenue streams for the organization in Personal Services industry. This can help IBJ to build a more holistic ecosystem for IBJ products in the Personal Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– IBJ can improve the customer journey of consumers in the Personal Services 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 IBJ 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 IBJ to hire the very best people irrespective of their geographical location.

---

Threats IBJ External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of IBJ 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 IBJ business can come under increasing regulations regarding data privacy, data security, 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.

Increasing wage structure of IBJ

– 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 IBJ.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, IBJ may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal Services sector.

Stagnating economy with rate increase

– IBJ 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 Personal Services industry.

High dependence on third party suppliers

– IBJ 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.

Shortening product life cycle

– it is one of the major threat that IBJ is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– IBJ 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. IBJ can take advantage of this fund but it will also bring new competitors in the Personal Services industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, IBJ 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 IBJ prominent markets.

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 IBJ in the Personal Services sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Personal Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. IBJ can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for IBJ in Personal Services industry. The Personal Services 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.

---

Weighted SWOT Analysis of IBJ Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at IBJ 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 IBJ 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 IBJ 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 IBJ 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 IBJ needs to make to build a sustainable competitive advantage.

--- ---