Okamoto Machine Tool Works (6125) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Okamoto Machine Tool Works (Japan)

Based on various researches at Oak Spring University , Okamoto Machine Tool Works is operating in a macro-environment that has been destablized by – there is backlash against globalization, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of Okamoto Machine Tool Works

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

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Strengths of Okamoto Machine Tool Works | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Okamoto Machine Tool Works are -

Highly skilled collaborators

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

Organizational Resilience of Okamoto Machine Tool Works

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

Innovation driven organization

– Okamoto Machine Tool Works is one of the most innovative firm in Misc. Capital Goods sector.

Low bargaining power of suppliers

– Suppliers of Okamoto Machine Tool Works in the Capital Goods sector have low bargaining power. Okamoto Machine Tool Works has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Okamoto Machine Tool Works to manage not only supply disruptions but also source products at highly competitive prices.

Strong track record of project management in the Misc. Capital Goods industry

– Okamoto Machine Tool Works 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)

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

Analytics focus

– Okamoto Machine Tool Works 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. Capital Goods 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.

Successful track record of launching new products

– Okamoto Machine Tool Works has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Okamoto Machine Tool Works 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. Capital Goods

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

High switching costs

– The high switching costs that Okamoto Machine Tool Works 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.

Superior customer experience

– The customer experience strategy of Okamoto Machine Tool Works in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– Okamoto Machine Tool Works is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Okamoto Machine Tool Works 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 Okamoto Machine Tool Works | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Okamoto Machine Tool Works are -

Aligning sales with marketing

– From the outside it seems that Okamoto Machine Tool Works needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Okamoto Machine Tool Works can leverage the sales team experience to cultivate customer relationships as Okamoto Machine Tool Works is planning to shift buying processes online.

Increasing silos among functional specialists

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

Ability to respond to the competition

– As the decision making is very deliberative at Okamoto Machine Tool Works, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Okamoto Machine Tool Works has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Low market penetration in new markets

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

High cash cycle compare to competitors

Okamoto Machine Tool Works has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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 Okamoto Machine Tool Works supply chain. Even after few cautionary changes, Okamoto Machine Tool Works is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Okamoto Machine Tool Works vulnerable to further global disruptions in South East Asia.

Slow to harness new channels of communication

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

High operating costs

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

Products dominated business model

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

Capital Spending Reduction

– Even during the low interest decade, Okamoto Machine Tool Works 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. Capital Goods industry using digital technology.

Employees’ less understanding of Okamoto Machine Tool Works strategy

– From the outside it seems that the employees of Okamoto Machine Tool Works 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.

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Okamoto Machine Tool Works Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Okamoto Machine Tool Works are -

Building a culture of innovation

– managers at Okamoto Machine Tool Works 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. Capital Goods industry.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Okamoto Machine Tool Works 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. Okamoto Machine Tool Works 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.

Remote work and new talent hiring opportunities

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

Using analytics as competitive advantage

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

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. Okamoto Machine Tool Works can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Buying journey improvements

– Okamoto Machine Tool Works can improve the customer journey of consumers in the Misc. Capital Goods 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Okamoto Machine Tool Works 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 Okamoto Machine Tool Works to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Okamoto Machine Tool Works 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. Capital Goods industry, and it will provide faster access to the consumers.

Low interest rates

– Even though inflation is raising its head in most developed economies, Okamoto Machine Tool Works 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.

Creating value in data economy

– The success of analytics program of Okamoto Machine Tool Works has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Okamoto Machine Tool Works to build a more holistic ecosystem for Okamoto Machine Tool Works products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Okamoto Machine Tool Works 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 Misc. Capital Goods industry

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

Developing new processes and practices

– Okamoto Machine Tool Works can develop new processes and procedures in Misc. Capital Goods 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.

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Threats Okamoto Machine Tool Works External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Okamoto Machine Tool Works are -

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 Okamoto Machine Tool Works.

Stagnating economy with rate increase

– Okamoto Machine Tool Works 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. Capital Goods industry.

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 Okamoto Machine Tool Works business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Okamoto Machine Tool Works with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

Consumer confidence and its impact on Okamoto Machine Tool Works 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. Capital Goods industry and other sectors.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Okamoto Machine Tool Works in Misc. Capital Goods industry. The Misc. Capital Goods 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.

Technology acceleration in Forth Industrial Revolution

– Okamoto Machine Tool Works has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Okamoto Machine Tool Works needs to keep up with the evolution of technology in the Misc. Capital Goods 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.

Environmental challenges

– Okamoto Machine Tool Works 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. Okamoto Machine Tool Works can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Okamoto Machine Tool Works 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 Okamoto Machine Tool Works prominent markets.

High dependence on third party suppliers

– Okamoto Machine Tool Works 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.

Shortening product life cycle

– it is one of the major threat that Okamoto Machine Tool Works is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Regulatory challenges

– Okamoto Machine Tool Works 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 Misc. Capital Goods industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Okamoto Machine Tool Works 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. Capital Goods sector.

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Weighted SWOT Analysis of Okamoto Machine Tool Works Template, Example

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

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