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 – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , technology disruption, increasing household debt because of falling income levels, increasing commodity prices,
there is backlash against globalization, cloud computing is disrupting traditional business models, 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 -
Low bargaining power of suppliers
– Suppliers of Iwatsuka Confectionery in the Consumer/Non-Cyclical sector have low bargaining power. Iwatsuka Confectionery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Iwatsuka Confectionery to manage not only supply disruptions but also source products at highly competitive prices.
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.
Highly skilled collaborators
– Iwatsuka Confectionery has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Iwatsuka Confectionery have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Iwatsuka Confectionery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Iwatsuka Confectionery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Innovation driven organization
– Iwatsuka Confectionery is one of the most innovative firm in Food Processing sector.
Training and development
– Iwatsuka Confectionery has one of the best training and development program in Consumer/Non-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.
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.
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.
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.
Weaknesses of Iwatsuka Confectionery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Iwatsuka Confectionery are -
Capital Spending Reduction
– Even during the low interest decade, Iwatsuka Confectionery has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Food Processing industry using digital technology.
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.
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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Iwatsuka Confectionery 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.
Slow decision making process
– As mentioned earlier in the report, Iwatsuka Confectionery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Iwatsuka Confectionery 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Iwatsuka Confectionery is slow explore the new channels of communication. These new channels of communication can help Iwatsuka Confectionery to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
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.
Iwatsuka Confectionery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Iwatsuka Confectionery 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 Iwatsuka Confectionery 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.
Manufacturing automation
– Iwatsuka Confectionery can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.
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.
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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Iwatsuka Confectionery 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.
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.
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.
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. Iwatsuka Confectionery can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Iwatsuka Confectionery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Iwatsuka Confectionery are -
Shortening product life cycle
– it is one of the major threat that Iwatsuka Confectionery is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Iwatsuka Confectionery business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Iwatsuka Confectionery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing 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. 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.
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.
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.
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.
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.
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.
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. Iwatsuka Confectionery needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
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.
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.
