SWOT Analysis / TOWS Matrix for Kobelco Eco-Solutions (Japan)
Based on various researches at Oak Spring University , Kobelco Eco-Solutions is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China, increasing commodity prices, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Kobelco Eco-Solutions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kobelco Eco-Solutions can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kobelco Eco-Solutions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kobelco Eco-Solutions 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 Kobelco Eco-Solutions can be done for the following purposes –
1. Strategic planning of Kobelco Eco-Solutions
2. Improving business portfolio management of Kobelco Eco-Solutions
3. Assessing feasibility of the new initiative in Japan
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kobelco Eco-Solutions
Strengths of Kobelco Eco-Solutions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kobelco Eco-Solutions are -
Innovation driven organization
– Kobelco Eco-Solutions is one of the most innovative firm in Waste Management Services sector.
Successful track record of launching new products
– Kobelco Eco-Solutions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kobelco Eco-Solutions 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.
Organizational Resilience of Kobelco Eco-Solutions
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kobelco Eco-Solutions does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Waste Management Services
– Kobelco Eco-Solutions is one of the leading players in the Waste Management Services industry in Japan. Over the years it has not only transformed the business landscape in the Waste Management Services industry in Japan but also across the existing markets. The ability to lead change has enabled Kobelco Eco-Solutions 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 Kobelco Eco-Solutions in the Services sector have low bargaining power. Kobelco Eco-Solutions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kobelco Eco-Solutions to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Waste Management Services industry
– Kobelco Eco-Solutions is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Kobelco Eco-Solutions 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 Waste Management Services industry
- digital transformation varies from industry to industry. For Kobelco Eco-Solutions digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kobelco Eco-Solutions 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.
Analytics focus
– Kobelco Eco-Solutions 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 Waste Management 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.
Effective Research and Development (R&D)
– Kobelco Eco-Solutions has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kobelco Eco-Solutions staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Kobelco Eco-Solutions has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kobelco Eco-Solutions to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Kobelco Eco-Solutions comprises – understanding the underlying the factors in the Waste Management Services 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.
Weaknesses of Kobelco Eco-Solutions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kobelco Eco-Solutions are -
Employees’ less understanding of Kobelco Eco-Solutions strategy
– From the outside it seems that the employees of Kobelco Eco-Solutions 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.
Interest costs
– Compare to the competition, Kobelco Eco-Solutions 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.
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 Kobelco Eco-Solutions supply chain. Even after few cautionary changes, Kobelco Eco-Solutions is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kobelco Eco-Solutions vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Waste Management Services industry, Kobelco Eco-Solutions 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.
High dependence on Kobelco Eco-Solutions ‘s star products
– The top 2 products and services of Kobelco Eco-Solutions still accounts for major business revenue. This dependence on star products in Waste Management Services industry has resulted into insufficient focus on developing new products, even though Kobelco Eco-Solutions has relatively successful track record of launching new products.
Lack of clear differentiation of Kobelco Eco-Solutions products
– To increase the profitability and margins on the products, Kobelco Eco-Solutions needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Kobelco Eco-Solutions needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at Kobelco Eco-Solutions can leverage the sales team experience to cultivate customer relationships as Kobelco Eco-Solutions is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Kobelco Eco-Solutions, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Kobelco Eco-Solutions 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 Waste Management Services industry
– because of the regulatory requirements in Japan, Kobelco Eco-Solutions 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 Waste Management Services industry.
High cash cycle compare to competitors
Kobelco Eco-Solutions has a high cash cycle compare to other players in the Waste Management Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Waste Management Services industry
– The stress on hiring functional specialists at Kobelco Eco-Solutions 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.
Kobelco Eco-Solutions Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kobelco Eco-Solutions are -
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 Kobelco Eco-Solutions 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.
Leveraging digital technologies
– Kobelco Eco-Solutions 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
– Kobelco Eco-Solutions can develop new processes and procedures in Waste Management 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kobelco Eco-Solutions can use these opportunities to build new business models that can help the communities that Kobelco Eco-Solutions operates in. Secondly it can use opportunities from government spending in Waste Management Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kobelco Eco-Solutions 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 Kobelco Eco-Solutions to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Kobelco Eco-Solutions to increase its market reach. Kobelco Eco-Solutions 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.
Using analytics as competitive advantage
– Kobelco Eco-Solutions has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Waste Management Services sector. This continuous investment in analytics has enabled Kobelco Eco-Solutions to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kobelco Eco-Solutions to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Waste Management Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kobelco Eco-Solutions 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. Kobelco Eco-Solutions 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 Waste Management Services industry, but it has also influenced the consumer preferences. Kobelco Eco-Solutions can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Kobelco Eco-Solutions 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 Kobelco Eco-Solutions has opened avenues for new revenue streams for the organization in Waste Management Services industry. This can help Kobelco Eco-Solutions to build a more holistic ecosystem for Kobelco Eco-Solutions products in the Waste Management Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Kobelco Eco-Solutions can improve the customer journey of consumers in the Waste Management 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kobelco Eco-Solutions in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Waste Management Services industry, and it will provide faster access to the consumers.
Threats Kobelco Eco-Solutions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kobelco Eco-Solutions are -
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 Kobelco Eco-Solutions in the Waste Management Services sector and impact the bottomline of the organization.
Consumer confidence and its impact on Kobelco Eco-Solutions 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 Waste Management Services industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kobelco Eco-Solutions 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 Kobelco Eco-Solutions prominent markets.
High dependence on third party suppliers
– Kobelco Eco-Solutions 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kobelco Eco-Solutions may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.
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. Kobelco Eco-Solutions 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.
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 Kobelco Eco-Solutions 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 Kobelco Eco-Solutions
– 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 Kobelco Eco-Solutions.
Technology acceleration in Forth Industrial Revolution
– Kobelco Eco-Solutions has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, Kobelco Eco-Solutions needs to keep up with the evolution of technology in the Waste Management Services 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.
Easy access to finance
– Easy access to finance in Waste Management Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kobelco Eco-Solutions can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents Kobelco Eco-Solutions with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services sector.
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. Kobelco Eco-Solutions needs to understand the core reasons impacting the Waste Management Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kobelco Eco-Solutions Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kobelco Eco-Solutions 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 Kobelco Eco-Solutions 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 Kobelco Eco-Solutions 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 Kobelco Eco-Solutions 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 Kobelco Eco-Solutions needs to make to build a sustainable competitive advantage.