Sun (6736) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Peripherals
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sun (Japan)
Based on various researches at Oak Spring University , Sun is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels,
increasing energy prices, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sun can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sun, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sun 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 Sun can be done for the following purposes –
1. Strategic planning of Sun
2. Improving business portfolio management of Sun
3. Assessing feasibility of the new initiative in Japan
4. Making a Computer Peripherals sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sun
Strengths of Sun | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sun are -
Effective Research and Development (R&D)
– Sun has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sun staying ahead in the Computer Peripherals industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Computer Peripherals industry
– Sun is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Sun is one of the leading players in the Computer Peripherals 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.
Successful track record of launching new products
– Sun has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sun 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.
Highly skilled collaborators
– Sun has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Peripherals industry. Secondly the value chain collaborators of Sun have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Sun in the Technology sector have low bargaining power. Sun has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sun to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Sun has one of the best training and development program in Technology industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Sun is present in almost all the verticals within the Computer Peripherals industry. This has provided Sun a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Sun 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.
High brand equity
– Sun has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sun to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Sun 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.
Digital Transformation in Computer Peripherals industry
- digital transformation varies from industry to industry. For Sun digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sun 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.
Weaknesses of Sun | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sun are -
Lack of clear differentiation of Sun products
– To increase the profitability and margins on the products, Sun needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Sun ‘s star products
– The top 2 products and services of Sun still accounts for major business revenue. This dependence on star products in Computer Peripherals industry has resulted into insufficient focus on developing new products, even though Sun has relatively successful track record of launching new products.
Need for greater diversity
– Sun 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 Computer Peripherals industry
– because of the regulatory requirements in Japan, Sun 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 Computer Peripherals industry.
Products dominated business model
– Even though Sun has some of the most successful models in the Computer Peripherals industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sun should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Sun has high operating costs in the Computer Peripherals industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sun lucrative customers.
Slow to strategic competitive environment developments
– As Sun is one of the leading players in the Computer Peripherals industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Peripherals industry in last five years.
Aligning sales with marketing
– From the outside it seems that Sun needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Peripherals industry have deep experience in developing customer relationships. Marketing department at Sun can leverage the sales team experience to cultivate customer relationships as Sun is planning to shift buying processes online.
Interest costs
– Compare to the competition, Sun 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.
Ability to respond to the competition
– As the decision making is very deliberative at Sun, in the dynamic environment of Computer Peripherals industry it has struggled to respond to the nimble upstart competition. Sun has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Sun strategy
– From the outside it seems that the employees of Sun 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.
Sun Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sun are -
Creating value in data economy
– The success of analytics program of Sun has opened avenues for new revenue streams for the organization in Computer Peripherals industry. This can help Sun to build a more holistic ecosystem for Sun products in the Computer Peripherals industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sun can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sun 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 Sun to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Sun 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.
Building a culture of innovation
– managers at Sun can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Computer Peripherals industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sun 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 Sun to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Sun can develop new processes and procedures in Computer Peripherals 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Peripherals industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sun 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. Sun 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.
Learning at scale
– Online learning technologies has now opened space for Sun 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.
Leveraging digital technologies
– Sun 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.
Buying journey improvements
– Sun can improve the customer journey of consumers in the Computer Peripherals 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sun in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Peripherals industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sun 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.
Threats Sun External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sun are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sun may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Peripherals sector.
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. Sun 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.
Environmental challenges
– Sun 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. Sun can take advantage of this fund but it will also bring new competitors in the Computer Peripherals industry.
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 Sun in the Computer Peripherals sector and impact the bottomline of the organization.
Consumer confidence and its impact on Sun 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 Computer Peripherals industry and other sectors.
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.
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 Sun.
High dependence on third party suppliers
– Sun 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.
Increasing wage structure of Sun
– 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 Sun.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sun 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 Sun prominent markets.
Technology acceleration in Forth Industrial Revolution
– Sun has witnessed rapid integration of technology during Covid-19 in the Computer Peripherals industry. As one of the leading players in the industry, Sun needs to keep up with the evolution of technology in the Computer Peripherals 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 Sun in Computer Peripherals industry. The Computer Peripherals 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.
Easy access to finance
– Easy access to finance in Computer Peripherals industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sun can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Sun Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sun 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 Sun 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 Sun 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 Sun 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 Sun needs to make to build a sustainable competitive advantage.