SWOT Analysis / TOWS Matrix for Dai-Ichi Seiko (Japan)
Based on various researches at Oak Spring University , Dai-Ichi Seiko is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dai-Ichi Seiko can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dai-Ichi Seiko, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dai-Ichi Seiko 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 Dai-Ichi Seiko can be done for the following purposes –
1. Strategic planning of Dai-Ichi Seiko
2. Improving business portfolio management of Dai-Ichi Seiko
3. Assessing feasibility of the new initiative in Japan
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dai-Ichi Seiko
Strengths of Dai-Ichi Seiko | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dai-Ichi Seiko are -
Training and development
– Dai-Ichi Seiko has one of the best training and development program in Technology 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.
Organizational Resilience of Dai-Ichi Seiko
– The covid-19 pandemic has put organizational resilience at the centre of everthing Dai-Ichi Seiko does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Dai-Ichi Seiko has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electronic Instr. & Controls industry. Secondly the value chain collaborators of Dai-Ichi Seiko have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Dai-Ichi Seiko is present in almost all the verticals within the Electronic Instr. & Controls industry. This has provided Dai-Ichi Seiko 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.
High switching costs
– The high switching costs that Dai-Ichi Seiko 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.
Successful track record of launching new products
– Dai-Ichi Seiko has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dai-Ichi Seiko 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.
Digital Transformation in Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Dai-Ichi Seiko digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dai-Ichi Seiko 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.
Sustainable margins compare to other players in Electronic Instr. & Controls industry
– Dai-Ichi Seiko has clearly differentiated products in the market place. This has enabled Dai-Ichi Seiko to fetch slight price premium compare to the competitors in the Electronic Instr. & Controls industry. The sustainable margins have also helped Dai-Ichi Seiko to invest into research and development (R&D) and innovation.
High brand equity
– Dai-Ichi Seiko has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dai-Ichi Seiko to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Dai-Ichi Seiko is one of the most innovative firm in Electronic Instr. & Controls sector.
Effective Research and Development (R&D)
– Dai-Ichi Seiko has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dai-Ichi Seiko staying ahead in the Electronic Instr. & Controls industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Dai-Ichi Seiko 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 Electronic Instr. & Controls 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 Dai-Ichi Seiko | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dai-Ichi Seiko are -
Slow to strategic competitive environment developments
– As Dai-Ichi Seiko is one of the leading players in the Electronic Instr. & Controls industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electronic Instr. & Controls industry in last five years.
High dependence on Dai-Ichi Seiko ‘s star products
– The top 2 products and services of Dai-Ichi Seiko still accounts for major business revenue. This dependence on star products in Electronic Instr. & Controls industry has resulted into insufficient focus on developing new products, even though Dai-Ichi Seiko has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Dai-Ichi Seiko, in the dynamic environment of Electronic Instr. & Controls industry it has struggled to respond to the nimble upstart competition. Dai-Ichi Seiko has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Japan, Dai-Ichi Seiko needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Dai-Ichi Seiko strategy
– From the outside it seems that the employees of Dai-Ichi Seiko 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.
Lack of clear differentiation of Dai-Ichi Seiko products
– To increase the profitability and margins on the products, Dai-Ichi Seiko needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Dai-Ichi Seiko 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 Electronic Instr. & Controls industry using digital technology.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in Japan, Dai-Ichi Seiko 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 Electronic Instr. & Controls industry.
Increasing silos among functional specialists
– The organizational structure of Dai-Ichi Seiko is dominated by functional specialists. It is not different from other players in the Electronic Instr. & Controls industry, but Dai-Ichi Seiko needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dai-Ichi Seiko to focus more on services in the Electronic Instr. & Controls industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Dai-Ichi Seiko has a high cash cycle compare to other players in the Electronic Instr. & Controls industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Electronic Instr. & Controls industry, Dai-Ichi Seiko 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.
Dai-Ichi Seiko Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dai-Ichi Seiko are -
Buying journey improvements
– Dai-Ichi Seiko can improve the customer journey of consumers in the Electronic Instr. & Controls 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.
Better consumer reach
– The expansion of the 5G network will help Dai-Ichi Seiko to increase its market reach. Dai-Ichi Seiko 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dai-Ichi Seiko can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dai-Ichi Seiko 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 Dai-Ichi Seiko to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Dai-Ichi Seiko 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dai-Ichi Seiko can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dai-Ichi Seiko 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 Dai-Ichi Seiko to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dai-Ichi Seiko can use these opportunities to build new business models that can help the communities that Dai-Ichi Seiko operates in. Secondly it can use opportunities from government spending in Electronic Instr. & Controls sector.
Developing new processes and practices
– Dai-Ichi Seiko can develop new processes and procedures in Electronic Instr. & Controls 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 Dai-Ichi Seiko in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electronic Instr. & Controls industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Dai-Ichi Seiko has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Dai-Ichi Seiko to build a more holistic ecosystem for Dai-Ichi Seiko products in the Electronic Instr. & Controls industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electronic Instr. & Controls industry, but it has also influenced the consumer preferences. Dai-Ichi Seiko can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Electronic Instr. & Controls industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dai-Ichi Seiko 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. Dai-Ichi Seiko 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.
Threats Dai-Ichi Seiko External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dai-Ichi Seiko are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dai-Ichi Seiko 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 Dai-Ichi Seiko prominent markets.
Increasing wage structure of Dai-Ichi Seiko
– 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 Dai-Ichi Seiko.
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 Dai-Ichi Seiko business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Dai-Ichi Seiko is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Dai-Ichi Seiko 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 Electronic Instr. & Controls industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Dai-Ichi Seiko may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electronic Instr. & Controls sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dai-Ichi Seiko in Electronic Instr. & Controls industry. The Electronic Instr. & Controls 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.
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. Dai-Ichi Seiko needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Dai-Ichi Seiko 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.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dai-Ichi Seiko can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Dai-Ichi Seiko 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. Dai-Ichi Seiko can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls industry.
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.
Stagnating economy with rate increase
– Dai-Ichi Seiko 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 Electronic Instr. & Controls industry.
Weighted SWOT Analysis of Dai-Ichi Seiko Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dai-Ichi Seiko 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 Dai-Ichi Seiko 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 Dai-Ichi Seiko 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 Dai-Ichi Seiko 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 Dai-Ichi Seiko needs to make to build a sustainable competitive advantage.