SWOT Analysis / TOWS Matrix for Iwatsuka Confectionery (Japan)
Based on various researches at Oak Spring University , Iwatsuka Confectionery is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is backlash against globalization, 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 , increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Iwatsuka Confectionery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Iwatsuka Confectionery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Iwatsuka Confectionery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Iwatsuka Confectionery 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 Iwatsuka Confectionery can be done for the following purposes –
1. Strategic planning of Iwatsuka Confectionery
2. Improving business portfolio management of Iwatsuka Confectionery
3. Assessing feasibility of the new initiative in Japan
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Iwatsuka Confectionery
Strengths of Iwatsuka Confectionery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Iwatsuka Confectionery are -
Learning organization
- Iwatsuka Confectionery 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 Iwatsuka Confectionery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Iwatsuka Confectionery emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Iwatsuka Confectionery 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.
Superior customer experience
– The customer experience strategy of Iwatsuka Confectionery in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Iwatsuka Confectionery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Iwatsuka Confectionery staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Iwatsuka Confectionery is one of the most innovative firm in Food Processing sector.
Ability to recruit top talent
– Iwatsuka Confectionery is one of the leading players in the Food Processing 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.
Operational resilience
– The operational resilience strategy of Iwatsuka Confectionery comprises – understanding the underlying the factors in the Food Processing 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.
Diverse revenue streams
– Iwatsuka Confectionery is present in almost all the verticals within the Food Processing industry. This has provided Iwatsuka Confectionery 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Iwatsuka Confectionery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Iwatsuka Confectionery 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.
Organizational Resilience of Iwatsuka Confectionery
– The covid-19 pandemic has put organizational resilience at the centre of everthing Iwatsuka Confectionery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Iwatsuka Confectionery 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.
Analytics focus
– Iwatsuka Confectionery 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 Food Processing 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 Iwatsuka Confectionery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Iwatsuka Confectionery are -
Interest costs
– Compare to the competition, Iwatsuka Confectionery 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.
Lack of clear differentiation of Iwatsuka Confectionery products
– To increase the profitability and margins on the products, Iwatsuka Confectionery needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in Japan, Iwatsuka Confectionery 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 Food Processing industry.
Slow to strategic competitive environment developments
– As Iwatsuka Confectionery is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
Need for greater diversity
– Iwatsuka Confectionery 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.
Low market penetration in new markets
– Outside its home market of Japan, Iwatsuka Confectionery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Iwatsuka Confectionery has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Iwatsuka Confectionery lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Iwatsuka Confectionery, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Iwatsuka Confectionery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Iwatsuka Confectionery has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Iwatsuka Confectionery should strive to include more intangible value offerings along with its core products and services.
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 Iwatsuka Confectionery supply chain. Even after few cautionary changes, Iwatsuka Confectionery is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Iwatsuka Confectionery vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Iwatsuka Confectionery is just above the Food Processing 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.
Iwatsuka Confectionery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Iwatsuka Confectionery are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Food Processing industry, but it has also influenced the consumer preferences. Iwatsuka Confectionery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Iwatsuka Confectionery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Iwatsuka Confectionery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Iwatsuka Confectionery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Iwatsuka Confectionery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Iwatsuka Confectionery has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Iwatsuka Confectionery to build a more holistic ecosystem for Iwatsuka Confectionery products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, 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, Iwatsuka Confectionery can use these opportunities to build new business models that can help the communities that Iwatsuka Confectionery operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Iwatsuka Confectionery 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. Iwatsuka Confectionery 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.
Loyalty marketing
– Iwatsuka Confectionery 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Iwatsuka Confectionery is facing challenges because of the dominance of functional experts in the organization. Iwatsuka Confectionery can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Iwatsuka Confectionery to increase its market reach. Iwatsuka Confectionery 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 Iwatsuka Confectionery 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 Food Processing industry.
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Iwatsuka Confectionery in the Food Processing industry. Now Iwatsuka Confectionery can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Iwatsuka Confectionery can develop new processes and procedures in Food Processing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Iwatsuka Confectionery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Threats Iwatsuka Confectionery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Iwatsuka Confectionery are -
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Iwatsuka Confectionery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Iwatsuka Confectionery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Technology acceleration in Forth Industrial Revolution
– Iwatsuka Confectionery has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Iwatsuka Confectionery needs to keep up with the evolution of technology in the Food Processing 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.
Stagnating economy with rate increase
– Iwatsuka Confectionery 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 Food Processing industry.
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 Iwatsuka Confectionery in the Food Processing sector and impact the bottomline of the organization.
Regulatory challenges
– Iwatsuka Confectionery 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 Food Processing industry regulations.
Environmental challenges
– Iwatsuka Confectionery 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. Iwatsuka Confectionery can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
High dependence on third party suppliers
– Iwatsuka Confectionery 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.
Consumer confidence and its impact on Iwatsuka Confectionery 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 Food Processing industry and other sectors.
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 Iwatsuka Confectionery.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Iwatsuka Confectionery in Food Processing industry. The Food Processing 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.
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. Iwatsuka Confectionery 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.
Weighted SWOT Analysis of Iwatsuka Confectionery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Iwatsuka Confectionery 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 Iwatsuka Confectionery 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 Iwatsuka Confectionery 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 Iwatsuka Confectionery 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 Iwatsuka Confectionery needs to make to build a sustainable competitive advantage.