AGP (9377) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for AGP (Japan)

Based on various researches at Oak Spring University , AGP is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, there is backlash against globalization, etc

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Introduction to SWOT Analysis of AGP

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

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

The strengths of AGP are -

Ability to recruit top talent

– AGP is one of the leading players in the Misc. Transportation 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.

Ability to lead change in Misc. Transportation

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

Organizational Resilience of AGP

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

High brand equity

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

Successful track record of launching new products

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

Superior customer experience

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

Strong track record of project management in the Misc. Transportation industry

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

Effective Research and Development (R&D)

– AGP has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – AGP staying ahead in the Misc. Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– AGP 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. Transportation 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.

Sustainable margins compare to other players in Misc. Transportation industry

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

Highly skilled collaborators

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

Diverse revenue streams

– AGP is present in almost all the verticals within the Misc. Transportation industry. This has provided AGP 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.

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

The weaknesses of AGP are -

Compensation and incentives

– The revenue per employee of AGP is just above the Misc. Transportation 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 Misc. Transportation industry, AGP 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 AGP, it seems that company is thinking out the frontier risks that can impact Misc. Transportation 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.

Skills based hiring in Misc. Transportation industry

– The stress on hiring functional specialists at AGP 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.

Increasing silos among functional specialists

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

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, AGP is slow explore the new channels of communication. These new channels of communication can help AGP to provide better information regarding Misc. Transportation products and services. It can also build an online community to further reach out to potential customers.

Products dominated business model

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

High operating costs

– Compare to the competitors, AGP has high operating costs in the Misc. Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract AGP lucrative customers.

Slow to strategic competitive environment developments

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

Need for greater diversity

– AGP 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.

Lack of clear differentiation of AGP products

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

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

The opportunities of AGP are -

Leveraging digital technologies

– AGP 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for AGP 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. Transportation industry, and it will provide faster access to the consumers.

Learning at scale

– Online learning technologies has now opened space for AGP 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.

Manufacturing automation

– AGP can use the latest technology developments to improve its manufacturing and designing process in Misc. Transportation 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.

Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry

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

Developing new processes and practices

– AGP can develop new processes and procedures in Misc. Transportation 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.

Buying journey improvements

– AGP can improve the customer journey of consumers in the Misc. Transportation 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.

Remote work and new talent hiring opportunities

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

Reforming the budgeting process

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

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 AGP 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.

Loyalty marketing

– AGP has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Building a culture of innovation

– managers at AGP 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 Misc. Transportation industry.

Low interest rates

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

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

The threats of AGP are -

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. AGP 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, AGP 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 AGP prominent markets.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, AGP may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation sector.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for AGP in Misc. Transportation industry. The Misc. Transportation 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

– AGP 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.

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 AGP in the Misc. Transportation sector and impact the bottomline of the organization.

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.

Consumer confidence and its impact on AGP 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. Transportation industry and other sectors.

Stagnating economy with rate increase

– AGP 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. Transportation industry.

Environmental challenges

– AGP 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. AGP can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.

Increasing wage structure of AGP

– 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 AGP.

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. AGP needs to understand the core reasons impacting the Misc. Transportation industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of AGP Template, Example

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

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