Rhythm Watch Co Ltd (7769) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Rhythm Watch Co Ltd (Japan)

Based on various researches at Oak Spring University , Rhythm Watch Co Ltd is operating in a macro-environment that has been destablized by – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing government debt because of Covid-19 spendings, wage bills are increasing, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc

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Introduction to SWOT Analysis of Rhythm Watch Co Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Rhythm Watch Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rhythm Watch Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rhythm Watch Co 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Rhythm Watch Co Ltd can be done for the following purposes –
1. Strategic planning of Rhythm Watch Co Ltd
2. Improving business portfolio management of Rhythm Watch Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rhythm Watch Co Ltd

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Strengths of Rhythm Watch Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Rhythm Watch Co Ltd are -

Operational resilience

– The operational resilience strategy of Rhythm Watch Co Ltd comprises – understanding the underlying the factors in the Jewelry & Silverware 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.

Learning organization

- Rhythm Watch Co 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 Rhythm Watch Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Rhythm Watch Co Ltd emphasize – knowledge, initiative, and innovation.

Ability to recruit top talent

– Rhythm Watch Co Ltd is one of the leading players in the Jewelry & Silverware 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.

Sustainable margins compare to other players in Jewelry & Silverware industry

– Rhythm Watch Co Ltd has clearly differentiated products in the market place. This has enabled Rhythm Watch Co Ltd to fetch slight price premium compare to the competitors in the Jewelry & Silverware industry. The sustainable margins have also helped Rhythm Watch Co Ltd to invest into research and development (R&D) and innovation.

Digital Transformation in Jewelry & Silverware industry

- digital transformation varies from industry to industry. For Rhythm Watch Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rhythm Watch Co Ltd 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.

Innovation driven organization

– Rhythm Watch Co Ltd is one of the most innovative firm in Jewelry & Silverware sector.

Ability to lead change in Jewelry & Silverware

– Rhythm Watch Co Ltd is one of the leading players in the Jewelry & Silverware industry in Japan. Over the years it has not only transformed the business landscape in the Jewelry & Silverware industry in Japan but also across the existing markets. The ability to lead change has enabled Rhythm Watch Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Rhythm Watch Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rhythm Watch Co 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.

Organizational Resilience of Rhythm Watch Co Ltd

– The covid-19 pandemic has put organizational resilience at the centre of everthing Rhythm Watch Co Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Rhythm Watch Co Ltd in Jewelry & Silverware industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Rhythm Watch Co 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.

Low bargaining power of suppliers

– Suppliers of Rhythm Watch Co Ltd in the Consumer Cyclical sector have low bargaining power. Rhythm Watch Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rhythm Watch Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses of Rhythm Watch Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Rhythm Watch Co Ltd are -

Capital Spending Reduction

– Even during the low interest decade, Rhythm Watch Co 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 Jewelry & Silverware industry using digital technology.

Compensation and incentives

– The revenue per employee of Rhythm Watch Co Ltd is just above the Jewelry & Silverware 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.

Workers concerns about automation

– As automation is fast increasing in the Jewelry & Silverware industry, Rhythm Watch Co Ltd 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.

High bargaining power of channel partners in Jewelry & Silverware industry

– because of the regulatory requirements in Japan, Rhythm Watch Co Ltd 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 Jewelry & Silverware industry.

Interest costs

– Compare to the competition, Rhythm Watch Co 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.

Products dominated business model

– Even though Rhythm Watch Co Ltd has some of the most successful models in the Jewelry & Silverware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Rhythm Watch Co Ltd should strive to include more intangible value offerings along with its core products and services.

Need for greater diversity

– Rhythm Watch Co Ltd 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.

High dependence on Rhythm Watch Co Ltd ‘s star products

– The top 2 products and services of Rhythm Watch Co Ltd still accounts for major business revenue. This dependence on star products in Jewelry & Silverware industry has resulted into insufficient focus on developing new products, even though Rhythm Watch Co Ltd has relatively successful track record of launching new products.

Slow to strategic competitive environment developments

– As Rhythm Watch Co Ltd is one of the leading players in the Jewelry & Silverware industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Jewelry & Silverware industry in last five years.

High operating costs

– Compare to the competitors, Rhythm Watch Co Ltd has high operating costs in the Jewelry & Silverware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Rhythm Watch Co Ltd lucrative customers.

Increasing silos among functional specialists

– The organizational structure of Rhythm Watch Co Ltd is dominated by functional specialists. It is not different from other players in the Jewelry & Silverware industry, but Rhythm Watch Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rhythm Watch Co Ltd to focus more on services in the Jewelry & Silverware industry rather than just following the product oriented approach.

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Rhythm Watch Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Rhythm Watch Co Ltd are -

Developing new processes and practices

– Rhythm Watch Co Ltd can develop new processes and procedures in Jewelry & Silverware 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 Rhythm Watch Co Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Rhythm Watch Co Ltd has opened avenues for new revenue streams for the organization in Jewelry & Silverware industry. This can help Rhythm Watch Co Ltd to build a more holistic ecosystem for Rhythm Watch Co Ltd products in the Jewelry & Silverware industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Jewelry & Silverware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rhythm Watch Co 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. Rhythm Watch Co 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.

Using analytics as competitive advantage

– Rhythm Watch Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Jewelry & Silverware sector. This continuous investment in analytics has enabled Rhythm Watch Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rhythm Watch Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Better consumer reach

– The expansion of the 5G network will help Rhythm Watch Co Ltd to increase its market reach. Rhythm Watch Co 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.

Manufacturing automation

– Rhythm Watch Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Jewelry & Silverware 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rhythm Watch Co 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 Rhythm Watch Co Ltd to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Rhythm Watch Co 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 Rhythm Watch Co 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Rhythm Watch Co 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.

Learning at scale

– Online learning technologies has now opened space for Rhythm Watch Co Ltd 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Jewelry & Silverware industry, but it has also influenced the consumer preferences. Rhythm Watch Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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. Rhythm Watch Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Rhythm Watch Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Rhythm Watch Co Ltd are -

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. Rhythm Watch Co Ltd needs to understand the core reasons impacting the Jewelry & Silverware industry. This will help it in building a better workplace.

Regulatory challenges

– Rhythm Watch Co 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 Jewelry & Silverware industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Jewelry & Silverware industry are lowering. It can presents Rhythm Watch Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Jewelry & Silverware sector.

Easy access to finance

– Easy access to finance in Jewelry & Silverware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rhythm Watch Co Ltd 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 Rhythm Watch Co 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 Rhythm Watch Co Ltd.

High dependence on third party suppliers

– Rhythm Watch Co 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.

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.

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. Rhythm Watch Co Ltd 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.

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 Rhythm Watch Co Ltd 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, Rhythm Watch Co 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 Jewelry & Silverware 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 Rhythm Watch Co Ltd in the Jewelry & Silverware sector and impact the bottomline of the organization.

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 Rhythm Watch Co Ltd.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Rhythm Watch Co Ltd in Jewelry & Silverware industry. The Jewelry & Silverware 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.

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Weighted SWOT Analysis of Rhythm Watch Co Ltd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Rhythm Watch Co 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 Rhythm Watch Co 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 Rhythm Watch Co 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 Rhythm Watch Co 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 Rhythm Watch Co Ltd needs to make to build a sustainable competitive advantage.

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