Sanko Metal Industrial (1972) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sanko Metal Industrial (Japan)
Based on various researches at Oak Spring University , Sanko Metal Industrial is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Sanko Metal Industrial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sanko Metal Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sanko Metal Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sanko Metal Industrial 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 Sanko Metal Industrial can be done for the following purposes –
1. Strategic planning of Sanko Metal Industrial
2. Improving business portfolio management of Sanko Metal Industrial
3. Assessing feasibility of the new initiative in Japan
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sanko Metal Industrial
Strengths of Sanko Metal Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sanko Metal Industrial are -
Ability to lead change in Construction Services
– Sanko Metal Industrial is one of the leading players in the Construction Services industry in Japan. Over the years it has not only transformed the business landscape in the Construction Services industry in Japan but also across the existing markets. The ability to lead change has enabled Sanko Metal Industrial in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Sanko Metal Industrial is present in almost all the verticals within the Construction Services industry. This has provided Sanko Metal Industrial 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Sanko Metal Industrial digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sanko Metal Industrial 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.
Successful track record of launching new products
– Sanko Metal Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sanko Metal Industrial 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.
Low bargaining power of suppliers
– Suppliers of Sanko Metal Industrial in the Capital Goods sector have low bargaining power. Sanko Metal Industrial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sanko Metal Industrial to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Sanko Metal Industrial 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
- Sanko Metal Industrial 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 Sanko Metal Industrial is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sanko Metal Industrial emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Sanko Metal Industrial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Sanko Metal Industrial have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Sanko Metal Industrial
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sanko Metal Industrial does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Sanko Metal Industrial is one of the leading players in the Construction Services 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)
– Sanko Metal Industrial has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sanko Metal Industrial staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Sanko Metal Industrial has one of the best training and development program in Capital Goods 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 Sanko Metal Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sanko Metal Industrial are -
High dependence on Sanko Metal Industrial ‘s star products
– The top 2 products and services of Sanko Metal Industrial still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Sanko Metal Industrial has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Sanko Metal Industrial 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.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Sanko Metal Industrial 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.
Aligning sales with marketing
– From the outside it seems that Sanko Metal Industrial needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Sanko Metal Industrial can leverage the sales team experience to cultivate customer relationships as Sanko Metal Industrial is planning to shift buying processes online.
Lack of clear differentiation of Sanko Metal Industrial products
– To increase the profitability and margins on the products, Sanko Metal Industrial needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Sanko Metal Industrial 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 Construction Services industry
– because of the regulatory requirements in Japan, Sanko Metal Industrial 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 Construction Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Sanko Metal Industrial, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Sanko Metal Industrial 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 Sanko Metal Industrial strategy
– From the outside it seems that the employees of Sanko Metal Industrial 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.
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 Sanko Metal Industrial supply chain. Even after few cautionary changes, Sanko Metal Industrial is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sanko Metal Industrial vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Sanko Metal Industrial has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Sanko Metal Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sanko Metal Industrial are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sanko Metal Industrial 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. Sanko Metal Industrial 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.
Leveraging digital technologies
– Sanko Metal Industrial 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.
Creating value in data economy
– The success of analytics program of Sanko Metal Industrial has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Sanko Metal Industrial to build a more holistic ecosystem for Sanko Metal Industrial products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Sanko Metal Industrial can improve the customer journey of consumers in the Construction Services 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sanko Metal Industrial is facing challenges because of the dominance of functional experts in the organization. Sanko Metal Industrial can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Sanko Metal Industrial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Sanko Metal Industrial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sanko Metal Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Sanko Metal Industrial 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 Construction Services industry.
Loyalty marketing
– Sanko Metal Industrial 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.
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sanko Metal Industrial in the Construction Services industry. Now Sanko Metal Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sanko Metal Industrial in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
Manufacturing automation
– Sanko Metal Industrial can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sanko Metal Industrial 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 Sanko Metal Industrial 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.
Threats Sanko Metal Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sanko Metal Industrial are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Sanko Metal Industrial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
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 Sanko Metal Industrial.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sanko Metal Industrial 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 Sanko Metal Industrial prominent markets.
Shortening product life cycle
– it is one of the major threat that Sanko Metal Industrial is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Sanko Metal Industrial needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Consumer confidence and its impact on Sanko Metal Industrial 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 Construction Services 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.
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 Sanko Metal Industrial in the Construction Services 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.
Increasing wage structure of Sanko Metal Industrial
– 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 Sanko Metal Industrial.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sanko Metal Industrial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Sanko Metal Industrial business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sanko Metal Industrial 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 Construction Services industry.
Weighted SWOT Analysis of Sanko Metal Industrial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sanko Metal Industrial 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 Sanko Metal Industrial 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 Sanko Metal Industrial 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 Sanko Metal Industrial 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 Sanko Metal Industrial needs to make to build a sustainable competitive advantage.
