Seibu Electric & Machinery (6144) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Seibu Electric & Machinery (Japan)
Based on various researches at Oak Spring University , Seibu Electric & Machinery is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Seibu Electric & Machinery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Seibu Electric & Machinery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seibu Electric & Machinery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seibu Electric & Machinery 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 Seibu Electric & Machinery can be done for the following purposes –
1. Strategic planning of Seibu Electric & Machinery
2. Improving business portfolio management of Seibu Electric & Machinery
3. Assessing feasibility of the new initiative in Japan
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Seibu Electric & Machinery
Strengths of Seibu Electric & Machinery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seibu Electric & Machinery are -
Cross disciplinary teams
– Horizontal connected teams at the Seibu Electric & Machinery are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Seibu Electric & Machinery 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 Seibu Electric & Machinery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Seibu Electric & Machinery emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Seibu Electric & Machinery has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Seibu Electric & Machinery have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Seibu Electric & Machinery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Seibu Electric & Machinery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Seibu Electric & Machinery 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 Misc. Fabricated Products 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.
Low bargaining power of suppliers
– Suppliers of Seibu Electric & Machinery in the Basic Materials sector have low bargaining power. Seibu Electric & Machinery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seibu Electric & Machinery to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Seibu Electric & Machinery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seibu Electric & Machinery 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 lead change in Misc. Fabricated Products
– Seibu Electric & Machinery is one of the leading players in the Misc. Fabricated Products industry in Japan. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in Japan but also across the existing markets. The ability to lead change has enabled Seibu Electric & Machinery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Seibu Electric & Machinery in Misc. Fabricated Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Seibu Electric & Machinery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Seibu Electric & Machinery 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.
High switching costs
– The high switching costs that Seibu Electric & Machinery 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.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Seibu Electric & Machinery has clearly differentiated products in the market place. This has enabled Seibu Electric & Machinery to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Seibu Electric & Machinery to invest into research and development (R&D) and innovation.
Weaknesses of Seibu Electric & Machinery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seibu Electric & Machinery are -
Capital Spending Reduction
– Even during the low interest decade, Seibu Electric & Machinery 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 Misc. Fabricated Products industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Misc. Fabricated Products industry, Seibu Electric & Machinery 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.
No frontier risks strategy
– From the 10K / annual statement of Seibu Electric & Machinery, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Lack of clear differentiation of Seibu Electric & Machinery products
– To increase the profitability and margins on the products, Seibu Electric & Machinery needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in Japan, Seibu Electric & Machinery 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 Misc. Fabricated Products industry.
Increasing silos among functional specialists
– The organizational structure of Seibu Electric & Machinery is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Seibu Electric & Machinery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Seibu Electric & Machinery to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Seibu Electric & Machinery is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
High cash cycle compare to competitors
Seibu Electric & Machinery has a high cash cycle compare to other players in the Misc. Fabricated Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Seibu Electric & Machinery is slow explore the new channels of communication. These new channels of communication can help Seibu Electric & Machinery to provide better information regarding Misc. Fabricated Products products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Seibu Electric & Machinery 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.
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 Seibu Electric & Machinery supply chain. Even after few cautionary changes, Seibu Electric & Machinery is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Seibu Electric & Machinery vulnerable to further global disruptions in South East Asia.
Seibu Electric & Machinery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Seibu Electric & Machinery are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Seibu Electric & Machinery can use these opportunities to build new business models that can help the communities that Seibu Electric & Machinery operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Seibu Electric & Machinery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Seibu Electric & Machinery 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 Seibu Electric & Machinery 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Seibu Electric & Machinery 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 Seibu Electric & Machinery to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Seibu Electric & Machinery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Seibu Electric & Machinery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seibu Electric & Machinery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Seibu Electric & Machinery can develop new processes and procedures in Misc. Fabricated Products 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.
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 Seibu Electric & Machinery 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.
Leveraging digital technologies
– Seibu Electric & Machinery 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Seibu Electric & Machinery 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. Seibu Electric & Machinery 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.
Manufacturing automation
– Seibu Electric & Machinery can use the latest technology developments to improve its manufacturing and designing process in Misc. Fabricated Products 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seibu Electric & Machinery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Seibu Electric & Machinery is facing challenges because of the dominance of functional experts in the organization. Seibu Electric & Machinery can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Seibu Electric & Machinery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Seibu Electric & Machinery are -
Stagnating economy with rate increase
– Seibu Electric & Machinery 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 Misc. Fabricated Products industry.
Shortening product life cycle
– it is one of the major threat that Seibu Electric & Machinery is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Seibu Electric & Machinery 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seibu Electric & Machinery 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 Seibu Electric & Machinery prominent markets.
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 Seibu Electric & Machinery business can come under increasing regulations regarding data privacy, data security, etc.
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. Seibu Electric & Machinery needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Seibu Electric & Machinery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Increasing wage structure of Seibu Electric & Machinery
– 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 Seibu Electric & Machinery.
Consumer confidence and its impact on Seibu Electric & Machinery 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 Misc. Fabricated Products industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Seibu Electric & Machinery has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Seibu Electric & Machinery needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seibu Electric & Machinery in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
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 Seibu Electric & Machinery.
Environmental challenges
– Seibu Electric & Machinery 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. Seibu Electric & Machinery can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
Weighted SWOT Analysis of Seibu Electric & Machinery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Seibu Electric & Machinery 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 Seibu Electric & Machinery 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 Seibu Electric & Machinery 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 Seibu Electric & Machinery 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 Seibu Electric & Machinery needs to make to build a sustainable competitive advantage.
