SWOT Analysis / TOWS Matrix for Forval Corp (Japan)
Based on various researches at Oak Spring University , Forval Corp is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, geopolitical disruptions, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Forval Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Forval Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Forval Corp 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 Forval Corp can be done for the following purposes –
1. Strategic planning of Forval Corp
2. Improving business portfolio management of Forval Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Office Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Forval Corp
Strengths of Forval Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Forval Corp are -
Low bargaining power of suppliers
– Suppliers of Forval Corp in the Technology sector have low bargaining power. Forval Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Forval Corp to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Forval Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Equipment industry. Secondly the value chain collaborators of Forval Corp have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Forval Corp 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.
Learning organization
- Forval Corp 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 Forval Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Forval Corp emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Forval Corp comprises – understanding the underlying the factors in the Office Equipment 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.
High brand equity
– Forval Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Forval Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Forval Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Forval Corp staying ahead in the Office Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Forval Corp in Office Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Office Equipment industry
- digital transformation varies from industry to industry. For Forval Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Forval Corp 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.
Diverse revenue streams
– Forval Corp is present in almost all the verticals within the Office Equipment industry. This has provided Forval Corp 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.
Ability to recruit top talent
– Forval Corp is one of the leading players in the Office Equipment 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
– Forval Corp 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 Office Equipment 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 Forval Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Forval Corp are -
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 Forval Corp supply chain. Even after few cautionary changes, Forval Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Forval Corp vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Forval Corp is slow explore the new channels of communication. These new channels of communication can help Forval Corp to provide better information regarding Office Equipment products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Forval Corp, in the dynamic environment of Office Equipment industry it has struggled to respond to the nimble upstart competition. Forval Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Office Equipment industry
– The stress on hiring functional specialists at Forval Corp 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.
Products dominated business model
– Even though Forval Corp has some of the most successful models in the Office Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Forval Corp should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Forval Corp is just above the Office Equipment 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.
Low market penetration in new markets
– Outside its home market of Japan, Forval Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Forval Corp, it seems that company is thinking out the frontier risks that can impact Office Equipment industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Forval Corp has a high cash cycle compare to other players in the Office Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Forval Corp 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 Office Equipment industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Forval Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Office Equipment industry have deep experience in developing customer relationships. Marketing department at Forval Corp can leverage the sales team experience to cultivate customer relationships as Forval Corp is planning to shift buying processes online.
Forval Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Forval Corp are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Office Equipment industry, but it has also influenced the consumer preferences. Forval Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Forval Corp can improve the customer journey of consumers in the Office Equipment 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 Forval Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Equipment industry, and it will provide faster access to the consumers.
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. Forval Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Forval Corp 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 Forval Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Forval Corp is facing challenges because of the dominance of functional experts in the organization. Forval Corp can utilize new technology in the field of Office Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Forval Corp 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.
Developing new processes and practices
– Forval Corp can develop new processes and procedures in Office Equipment 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.
Learning at scale
– Online learning technologies has now opened space for Forval Corp 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Forval Corp 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 Forval Corp to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Forval Corp to increase its market reach. Forval Corp 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.
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 Forval Corp 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.
Using analytics as competitive advantage
– Forval Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Equipment sector. This continuous investment in analytics has enabled Forval Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Forval Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Forval Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Forval Corp are -
High dependence on third party suppliers
– Forval Corp 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.
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 Forval Corp business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Forval Corp in Office Equipment industry. The Office Equipment 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Forval Corp 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 Forval Corp prominent markets.
Stagnating economy with rate increase
– Forval Corp 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 Office Equipment industry.
Consumer confidence and its impact on Forval Corp 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 Office Equipment industry and other sectors.
Regulatory challenges
– Forval Corp 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 Office Equipment industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Forval Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Equipment sector.
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 Forval Corp in the Office Equipment sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Office Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Forval Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Forval Corp
– 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 Forval Corp.
Environmental challenges
– Forval Corp 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. Forval Corp can take advantage of this fund but it will also bring new competitors in the Office Equipment industry.
Weighted SWOT Analysis of Forval Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Forval Corp 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 Forval Corp 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 Forval Corp 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 Forval Corp 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 Forval Corp needs to make to build a sustainable competitive advantage.
