SWOT Analysis / TOWS Matrix for Maxvalu Hokkaido (Japan)
Based on various researches at Oak Spring University , Maxvalu Hokkaido is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing household debt because of falling income levels, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Maxvalu Hokkaido can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maxvalu Hokkaido, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maxvalu Hokkaido 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 Maxvalu Hokkaido can be done for the following purposes –
1. Strategic planning of Maxvalu Hokkaido
2. Improving business portfolio management of Maxvalu Hokkaido
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Maxvalu Hokkaido
Strengths of Maxvalu Hokkaido | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maxvalu Hokkaido are -
Training and development
– Maxvalu Hokkaido 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.
Sustainable margins compare to other players in Retail (Grocery) industry
– Maxvalu Hokkaido has clearly differentiated products in the market place. This has enabled Maxvalu Hokkaido to fetch slight price premium compare to the competitors in the Retail (Grocery) industry. The sustainable margins have also helped Maxvalu Hokkaido to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Maxvalu Hokkaido has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maxvalu Hokkaido 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.
Effective Research and Development (R&D)
– Maxvalu Hokkaido has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Maxvalu Hokkaido staying ahead in the Retail (Grocery) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Retail (Grocery) industry
– Maxvalu Hokkaido is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Maxvalu Hokkaido 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.
Digital Transformation in Retail (Grocery) industry
- digital transformation varies from industry to industry. For Maxvalu Hokkaido digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Maxvalu Hokkaido 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.
Ability to lead change in Retail (Grocery)
– Maxvalu Hokkaido is one of the leading players in the Retail (Grocery) industry in Japan. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in Japan but also across the existing markets. The ability to lead change has enabled Maxvalu Hokkaido 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
– Maxvalu Hokkaido is one of the leading players in the Retail (Grocery) 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
– Maxvalu Hokkaido 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 Retail (Grocery) 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
– Maxvalu Hokkaido has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maxvalu Hokkaido to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Maxvalu Hokkaido 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 Maxvalu Hokkaido is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Maxvalu Hokkaido emphasize – knowledge, initiative, and innovation.
Weaknesses of Maxvalu Hokkaido | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maxvalu Hokkaido are -
Compensation and incentives
– The revenue per employee of Maxvalu Hokkaido is just above the Retail (Grocery) 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.
Need for greater diversity
– Maxvalu Hokkaido 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.
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 Maxvalu Hokkaido supply chain. Even after few cautionary changes, Maxvalu Hokkaido is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Maxvalu Hokkaido vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Maxvalu Hokkaido has high operating costs in the Retail (Grocery) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Maxvalu Hokkaido lucrative customers.
Skills based hiring in Retail (Grocery) industry
– The stress on hiring functional specialists at Maxvalu Hokkaido 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.
High dependence on Maxvalu Hokkaido ‘s star products
– The top 2 products and services of Maxvalu Hokkaido still accounts for major business revenue. This dependence on star products in Retail (Grocery) industry has resulted into insufficient focus on developing new products, even though Maxvalu Hokkaido has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Maxvalu Hokkaido is one of the leading players in the Retail (Grocery) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Grocery) industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Maxvalu Hokkaido is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Maxvalu Hokkaido needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maxvalu Hokkaido to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.
Employees’ less understanding of Maxvalu Hokkaido strategy
– From the outside it seems that the employees of Maxvalu Hokkaido 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.
Products dominated business model
– Even though Maxvalu Hokkaido has some of the most successful models in the Retail (Grocery) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Maxvalu Hokkaido should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Maxvalu Hokkaido, in the dynamic environment of Retail (Grocery) industry it has struggled to respond to the nimble upstart competition. Maxvalu Hokkaido has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Maxvalu Hokkaido Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Maxvalu Hokkaido are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Maxvalu Hokkaido in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Grocery) industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Maxvalu Hokkaido 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Grocery) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Maxvalu Hokkaido 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. Maxvalu Hokkaido 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
– Maxvalu Hokkaido can improve the customer journey of consumers in the Retail (Grocery) 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
– Maxvalu Hokkaido can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Maxvalu Hokkaido can use these opportunities to build new business models that can help the communities that Maxvalu Hokkaido operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.
Developing new processes and practices
– Maxvalu Hokkaido can develop new processes and procedures in Retail (Grocery) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Maxvalu Hokkaido is facing challenges because of the dominance of functional experts in the organization. Maxvalu Hokkaido can utilize new technology in the field of Retail (Grocery) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Maxvalu Hokkaido 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 Maxvalu Hokkaido to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maxvalu Hokkaido can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Maxvalu Hokkaido 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 Maxvalu Hokkaido to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Maxvalu Hokkaido 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.
Learning at scale
– Online learning technologies has now opened space for Maxvalu Hokkaido 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.
Threats Maxvalu Hokkaido External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Maxvalu Hokkaido are -
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.
Easy access to finance
– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Maxvalu Hokkaido can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Maxvalu Hokkaido needs to understand the core reasons impacting the Retail (Grocery) industry. This will help it in building a better workplace.
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. Maxvalu Hokkaido 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, Maxvalu Hokkaido may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Grocery) sector.
Increasing wage structure of Maxvalu Hokkaido
– 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 Maxvalu Hokkaido.
Environmental challenges
– Maxvalu Hokkaido 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. Maxvalu Hokkaido can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.
High dependence on third party suppliers
– Maxvalu Hokkaido 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 Maxvalu Hokkaido.
Consumer confidence and its impact on Maxvalu Hokkaido 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 Retail (Grocery) industry and other sectors.
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 Maxvalu Hokkaido 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, Maxvalu Hokkaido 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 Maxvalu Hokkaido prominent markets.
Regulatory challenges
– Maxvalu Hokkaido 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 Retail (Grocery) industry regulations.
Weighted SWOT Analysis of Maxvalu Hokkaido Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Maxvalu Hokkaido 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 Maxvalu Hokkaido 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 Maxvalu Hokkaido 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 Maxvalu Hokkaido 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 Maxvalu Hokkaido needs to make to build a sustainable competitive advantage.