Shimizu Bank Ltd (8364) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shimizu Bank Ltd (Japan)
Based on various researches at Oak Spring University , Shimizu Bank Ltd is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing energy prices,
competitive advantages are harder to sustain because of technology dispersion, 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 Shimizu Bank Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shimizu Bank Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shimizu Bank Ltd 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 Shimizu Bank Ltd can be done for the following purposes –
1. Strategic planning of Shimizu Bank Ltd
2. Improving business portfolio management of Shimizu Bank Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shimizu Bank Ltd
Strengths of Shimizu Bank Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shimizu Bank Ltd are -
High brand equity
– Shimizu Bank Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shimizu Bank Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Shimizu Bank Ltd in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Regional Banks industry
– Shimizu Bank Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Shimizu Bank Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shimizu Bank Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Shimizu Bank Ltd is present in almost all the verticals within the Regional Banks industry. This has provided Shimizu Bank Ltd 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.
Learning organization
- Shimizu Bank Ltd 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 Shimizu Bank Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shimizu Bank Ltd emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Shimizu Bank Ltd is one of the most innovative firm in Regional Banks sector.
Low bargaining power of suppliers
– Suppliers of Shimizu Bank Ltd in the Financial sector have low bargaining power. Shimizu Bank Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shimizu Bank Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Regional Banks
– Shimizu Bank Ltd is one of the leading players in the Regional Banks industry in Japan. Over the years it has not only transformed the business landscape in the Regional Banks industry in Japan but also across the existing markets. The ability to lead change has enabled Shimizu Bank Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Shimizu Bank Ltd 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
– Shimizu Bank Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shimizu Bank Ltd 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.
Ability to recruit top talent
– Shimizu Bank Ltd is one of the leading players in the Regional Banks 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.
Weaknesses of Shimizu Bank Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shimizu Bank Ltd 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 Shimizu Bank Ltd supply chain. Even after few cautionary changes, Shimizu Bank Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shimizu Bank Ltd vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Shimizu Bank Ltd has some of the most successful models in the Regional Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shimizu Bank Ltd should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Shimizu Bank Ltd has high operating costs in the Regional Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shimizu Bank Ltd lucrative customers.
Interest costs
– Compare to the competition, Shimizu Bank Ltd 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.
Employees’ less understanding of Shimizu Bank Ltd strategy
– From the outside it seems that the employees of Shimizu Bank Ltd 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.
Slow to strategic competitive environment developments
– As Shimizu Bank Ltd is one of the leading players in the Regional Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Regional Banks industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Shimizu Bank Ltd 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 Regional Banks industry using digital technology.
Lack of clear differentiation of Shimizu Bank Ltd products
– To increase the profitability and margins on the products, Shimizu Bank Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Japan, Shimizu Bank Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Shimizu Bank Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Regional Banks industry over the last five years. Shimizu Bank Ltd 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.
High dependence on Shimizu Bank Ltd ‘s star products
– The top 2 products and services of Shimizu Bank Ltd still accounts for major business revenue. This dependence on star products in Regional Banks industry has resulted into insufficient focus on developing new products, even though Shimizu Bank Ltd has relatively successful track record of launching new products.
Shimizu Bank Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shimizu Bank Ltd are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shimizu Bank Ltd is facing challenges because of the dominance of functional experts in the organization. Shimizu Bank Ltd can utilize new technology in the field of Regional Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Regional Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shimizu Bank Ltd in the Regional Banks industry. Now Shimizu Bank Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shimizu Bank Ltd 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 Shimizu Bank Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Shimizu Bank Ltd has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Shimizu Bank Ltd to build a more holistic ecosystem for Shimizu Bank Ltd products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Shimizu Bank Ltd 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
– Shimizu Bank Ltd can develop new processes and procedures in Regional Banks 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shimizu Bank Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shimizu Bank Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shimizu Bank Ltd 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 Shimizu Bank Ltd to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Shimizu Bank Ltd to increase its market reach. Shimizu Bank Ltd 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
– Shimizu Bank Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Regional Banks sector. This continuous investment in analytics has enabled Shimizu Bank Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shimizu Bank Ltd 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 Regional Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shimizu Bank Ltd 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. Shimizu Bank Ltd 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shimizu Bank Ltd can use these opportunities to build new business models that can help the communities that Shimizu Bank Ltd operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Threats Shimizu Bank Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shimizu Bank Ltd are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shimizu Bank Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shimizu Bank Ltd 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 Shimizu Bank Ltd prominent markets.
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 Shimizu Bank Ltd.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Shimizu Bank Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
High dependence on third party suppliers
– Shimizu Bank Ltd 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.
Technology acceleration in Forth Industrial Revolution
– Shimizu Bank Ltd has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, Shimizu Bank Ltd needs to keep up with the evolution of technology in the Regional Banks 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.
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.
Consumer confidence and its impact on Shimizu Bank Ltd 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 Regional Banks industry and other sectors.
Easy access to finance
– Easy access to finance in Regional Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shimizu Bank Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Shimizu Bank Ltd 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 Regional Banks industry regulations.
Stagnating economy with rate increase
– Shimizu Bank Ltd 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 Regional Banks industry.
Increasing wage structure of Shimizu Bank Ltd
– 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 Shimizu Bank Ltd.
Shortening product life cycle
– it is one of the major threat that Shimizu Bank Ltd is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Shimizu Bank Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shimizu Bank Ltd 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 Shimizu Bank Ltd 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 Shimizu Bank Ltd 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 Shimizu Bank Ltd 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 Shimizu Bank Ltd needs to make to build a sustainable competitive advantage.
