Tokyo Radiator Mfg (7235) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Tokyo Radiator Mfg (Japan)
Based on various researches at Oak Spring University , Tokyo Radiator Mfg is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Tokyo Radiator Mfg
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tokyo Radiator Mfg can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tokyo Radiator Mfg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tokyo Radiator Mfg 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 Tokyo Radiator Mfg can be done for the following purposes –
1. Strategic planning of Tokyo Radiator Mfg
2. Improving business portfolio management of Tokyo Radiator Mfg
3. Assessing feasibility of the new initiative in Japan
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tokyo Radiator Mfg
Strengths of Tokyo Radiator Mfg | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tokyo Radiator Mfg are -
Organizational Resilience of Tokyo Radiator Mfg
– The covid-19 pandemic has put organizational resilience at the centre of everthing Tokyo Radiator Mfg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Tokyo Radiator Mfg has clearly differentiated products in the market place. This has enabled Tokyo Radiator Mfg to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Tokyo Radiator Mfg to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Tokyo Radiator Mfg is one of the leading players in the Auto & Truck Parts 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.
Effective Research and Development (R&D)
– Tokyo Radiator Mfg has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tokyo Radiator Mfg staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Tokyo Radiator Mfg 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 Tokyo Radiator Mfg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Tokyo Radiator Mfg emphasize – knowledge, initiative, and innovation.
Ability to lead change in Auto & Truck Parts
– Tokyo Radiator Mfg is one of the leading players in the Auto & Truck Parts industry in Japan. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in Japan but also across the existing markets. The ability to lead change has enabled Tokyo Radiator Mfg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Tokyo Radiator Mfg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tokyo Radiator Mfg 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.
Cross disciplinary teams
– Horizontal connected teams at the Tokyo Radiator Mfg 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.
Diverse revenue streams
– Tokyo Radiator Mfg is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Tokyo Radiator Mfg 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.
Highly skilled collaborators
– Tokyo Radiator Mfg has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Tokyo Radiator Mfg have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Tokyo Radiator Mfg in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Tokyo Radiator Mfg has one of the best training and development program in Consumer 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.
Weaknesses of Tokyo Radiator Mfg | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tokyo Radiator Mfg are -
High dependence on Tokyo Radiator Mfg ‘s star products
– The top 2 products and services of Tokyo Radiator Mfg still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Tokyo Radiator Mfg has relatively successful track record of launching new products.
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 Tokyo Radiator Mfg supply chain. Even after few cautionary changes, Tokyo Radiator Mfg is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tokyo Radiator Mfg vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Tokyo Radiator Mfg is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in Japan, Tokyo Radiator Mfg 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 Auto & Truck Parts industry.
Capital Spending Reduction
– Even during the low interest decade, Tokyo Radiator Mfg 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 Auto & Truck Parts industry using digital technology.
Interest costs
– Compare to the competition, Tokyo Radiator Mfg 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.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Parts industry, Tokyo Radiator Mfg 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.
Lack of clear differentiation of Tokyo Radiator Mfg products
– To increase the profitability and margins on the products, Tokyo Radiator Mfg needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tokyo Radiator Mfg is slow explore the new channels of communication. These new channels of communication can help Tokyo Radiator Mfg to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Tokyo Radiator Mfg, it seems that company is thinking out the frontier risks that can impact Auto & Truck Parts 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.
Ability to respond to the competition
– As the decision making is very deliberative at Tokyo Radiator Mfg, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Tokyo Radiator Mfg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Tokyo Radiator Mfg Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tokyo Radiator Mfg are -
Building a culture of innovation
– managers at Tokyo Radiator Mfg 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 Auto & Truck Parts industry.
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 Tokyo Radiator Mfg 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tokyo Radiator Mfg is facing challenges because of the dominance of functional experts in the organization. Tokyo Radiator Mfg can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Tokyo Radiator Mfg 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tokyo Radiator Mfg 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 Tokyo Radiator Mfg 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, Tokyo Radiator Mfg 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.
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. Tokyo Radiator Mfg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Tokyo Radiator Mfg can improve the customer journey of consumers in the Auto & Truck Parts 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 Tokyo Radiator Mfg in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Tokyo Radiator Mfg has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Tokyo Radiator Mfg to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tokyo Radiator Mfg 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
– Tokyo Radiator Mfg can develop new processes and procedures in Auto & Truck Parts 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.
Manufacturing automation
– Tokyo Radiator Mfg can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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 Tokyo Radiator Mfg has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Tokyo Radiator Mfg to build a more holistic ecosystem for Tokyo Radiator Mfg products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Tokyo Radiator Mfg External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tokyo Radiator Mfg are -
Consumer confidence and its impact on Tokyo Radiator Mfg 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 Auto & Truck Parts industry and other sectors.
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.
Increasing wage structure of Tokyo Radiator Mfg
– 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 Tokyo Radiator Mfg.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tokyo Radiator Mfg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Tokyo Radiator Mfg.
Environmental challenges
– Tokyo Radiator Mfg 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. Tokyo Radiator Mfg can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tokyo Radiator Mfg in Auto & Truck Parts industry. The Auto & Truck Parts 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.
High dependence on third party suppliers
– Tokyo Radiator Mfg 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.
Stagnating economy with rate increase
– Tokyo Radiator Mfg 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 Auto & Truck Parts industry.
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.
Shortening product life cycle
– it is one of the major threat that Tokyo Radiator Mfg is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tokyo Radiator Mfg may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tokyo Radiator Mfg 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 Tokyo Radiator Mfg prominent markets.
Weighted SWOT Analysis of Tokyo Radiator Mfg Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tokyo Radiator Mfg 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 Tokyo Radiator Mfg 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 Tokyo Radiator Mfg 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 Tokyo Radiator Mfg 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 Tokyo Radiator Mfg needs to make to build a sustainable competitive advantage.