Recomm (3323) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Recomm (Japan)

Based on various researches at Oak Spring University , Recomm 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, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Recomm

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Recomm can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Recomm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Recomm 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 Recomm can be done for the following purposes –
1. Strategic planning of Recomm
2. Improving business portfolio management of Recomm
3. Assessing feasibility of the new initiative in Japan
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Recomm

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Strengths of Recomm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Recomm are -

Highly skilled collaborators

– Recomm has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Supplies industry. Secondly the value chain collaborators of Recomm have helped the firm to develop new products and bring them quickly to the marketplace.

Successful track record of launching new products

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

Sustainable margins compare to other players in Office Supplies industry

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

Learning organization

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

Ability to recruit top talent

– Recomm is one of the leading players in the Office Supplies 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

– Recomm 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 Supplies 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.

Superior customer experience

– The customer experience strategy of Recomm in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Office Supplies industry

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

Strong track record of project management in the Office Supplies industry

– Recomm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Training and development

– Recomm 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.

High brand equity

– Recomm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Recomm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Operational resilience

– The operational resilience strategy of Recomm comprises – understanding the underlying the factors in the Office Supplies 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.

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Weaknesses of Recomm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Recomm are -

Increasing silos among functional specialists

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

Low market penetration in new markets

– Outside its home market of Japan, Recomm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Office Supplies industry

– The stress on hiring functional specialists at Recomm 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.

High cash cycle compare to competitors

Recomm has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of Recomm products

– To increase the profitability and margins on the products, Recomm needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As Recomm is one of the leading players in the Office Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Office Supplies industry in last five years.

Compensation and incentives

– The revenue per employee of Recomm is just above the Office Supplies 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.

Products dominated business model

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

Capital Spending Reduction

– Even during the low interest decade, Recomm 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 Supplies industry using digital technology.

Need for greater diversity

– Recomm 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 bargaining power of channel partners in Office Supplies industry

– because of the regulatory requirements in Japan, Recomm 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 Office Supplies industry.

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Recomm Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Recomm are -

Developing new processes and practices

– Recomm can develop new processes and procedures in Office Supplies 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.

Finding new ways to collaborate

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

Use of Bitcoin and other crypto currencies for transactions in Office Supplies industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Recomm in the Office Supplies industry. Now Recomm can target international markets with far fewer capital restrictions requirements than the existing system.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Recomm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Recomm 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.

Leveraging digital technologies

– Recomm can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Remote work and new talent hiring opportunities

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

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 Recomm 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.

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. Recomm can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

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

Manufacturing automation

– Recomm can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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 Recomm has opened avenues for new revenue streams for the organization in Office Supplies industry. This can help Recomm to build a more holistic ecosystem for Recomm products in the Office Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Recomm can improve the customer journey of consumers in the Office Supplies 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.

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Threats Recomm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Recomm are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Recomm 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 Recomm prominent markets.

Easy access to finance

– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Recomm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Recomm business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Recomm 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 Supplies industry and other sectors.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents Recomm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.

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.

Regulatory challenges

– Recomm 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 Supplies industry regulations.

Shortening product life cycle

– it is one of the major threat that Recomm is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

High dependence on third party suppliers

– Recomm 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.

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 Recomm.

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. Recomm 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.

Technology acceleration in Forth Industrial Revolution

– Recomm has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, Recomm needs to keep up with the evolution of technology in the Office Supplies 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.

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Weighted SWOT Analysis of Recomm Template, Example

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

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