SWOT Analysis / TOWS Matrix for GMO Pepabo (Japan)
Based on various researches at Oak Spring University , GMO Pepabo is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that GMO Pepabo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the GMO Pepabo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which GMO Pepabo 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 GMO Pepabo can be done for the following purposes –
1. Strategic planning of GMO Pepabo
2. Improving business portfolio management of GMO Pepabo
3. Assessing feasibility of the new initiative in Japan
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of GMO Pepabo
Strengths of GMO Pepabo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of GMO Pepabo are -
Ability to lead change in Computer Services
– GMO Pepabo is one of the leading players in the Computer Services industry in Japan. Over the years it has not only transformed the business landscape in the Computer Services industry in Japan but also across the existing markets. The ability to lead change has enabled GMO Pepabo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– GMO Pepabo is one of the most innovative firm in Computer Services sector.
Successful track record of launching new products
– GMO Pepabo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. GMO Pepabo 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.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For GMO Pepabo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. GMO Pepabo 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.
Analytics focus
– GMO Pepabo 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 Computer Services 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.
Highly skilled collaborators
– GMO Pepabo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of GMO Pepabo have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of GMO Pepabo
– The covid-19 pandemic has put organizational resilience at the centre of everthing GMO Pepabo 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 Computer Services industry
– GMO Pepabo has clearly differentiated products in the market place. This has enabled GMO Pepabo to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped GMO Pepabo to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of GMO Pepabo comprises – understanding the underlying the factors in the Computer Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the GMO Pepabo 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.
Low bargaining power of suppliers
– Suppliers of GMO Pepabo in the Technology sector have low bargaining power. GMO Pepabo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps GMO Pepabo to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- GMO Pepabo 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 GMO Pepabo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at GMO Pepabo emphasize – knowledge, initiative, and innovation.
Weaknesses of GMO Pepabo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GMO Pepabo are -
Slow to strategic competitive environment developments
– As GMO Pepabo is one of the leading players in the Computer Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Services industry in last five years.
Slow decision making process
– As mentioned earlier in the report, GMO Pepabo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Services industry over the last five years. GMO Pepabo even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– From the 10K / annual statement of GMO Pepabo, it seems that company is thinking out the frontier risks that can impact Computer Services 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.
Lack of clear differentiation of GMO Pepabo products
– To increase the profitability and margins on the products, GMO Pepabo needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of GMO Pepabo strategy
– From the outside it seems that the employees of GMO Pepabo 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.
Workers concerns about automation
– As automation is fast increasing in the Computer Services industry, GMO Pepabo 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.
Increasing silos among functional specialists
– The organizational structure of GMO Pepabo is dominated by functional specialists. It is not different from other players in the Computer Services industry, but GMO Pepabo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help GMO Pepabo to focus more on services in the Computer Services industry rather than just following the product oriented approach.
Products dominated business model
– Even though GMO Pepabo has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. GMO Pepabo should strive to include more intangible value offerings along with its core products and services.
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 GMO Pepabo supply chain. Even after few cautionary changes, GMO Pepabo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left GMO Pepabo vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at GMO Pepabo, in the dynamic environment of Computer Services industry it has struggled to respond to the nimble upstart competition. GMO Pepabo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, GMO Pepabo is slow explore the new channels of communication. These new channels of communication can help GMO Pepabo to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.
GMO Pepabo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of GMO Pepabo are -
Buying journey improvements
– GMO Pepabo can improve the customer journey of consumers in the Computer 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.
Loyalty marketing
– GMO Pepabo 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.
Creating value in data economy
– The success of analytics program of GMO Pepabo has opened avenues for new revenue streams for the organization in Computer Services industry. This can help GMO Pepabo to build a more holistic ecosystem for GMO Pepabo products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– GMO Pepabo can use the latest technology developments to improve its manufacturing and designing process in Computer 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.
Better consumer reach
– The expansion of the 5G network will help GMO Pepabo to increase its market reach. GMO Pepabo will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, GMO Pepabo is facing challenges because of the dominance of functional experts in the organization. GMO Pepabo can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Computer Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for GMO Pepabo in the Computer Services industry. Now GMO Pepabo can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– GMO Pepabo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Services sector. This continuous investment in analytics has enabled GMO Pepabo to build a competitive advantage using analytics. The analytics driven competitive advantage can help GMO Pepabo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– GMO Pepabo 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.
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 GMO Pepabo to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at GMO Pepabo can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Computer Services industry.
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. GMO Pepabo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. GMO Pepabo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats GMO Pepabo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of GMO Pepabo are -
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 GMO Pepabo business can come under increasing regulations regarding data privacy, data security, etc.
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.
Stagnating economy with rate increase
– GMO Pepabo 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 Computer Services industry.
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 GMO Pepabo.
Regulatory challenges
– GMO Pepabo 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 Computer Services industry regulations.
Shortening product life cycle
– it is one of the major threat that GMO Pepabo is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– GMO Pepabo high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of GMO Pepabo
– 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 GMO Pepabo.
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. GMO Pepabo needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.
Consumer confidence and its impact on GMO Pepabo demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Computer Services 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.
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 GMO Pepabo in the Computer Services sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, GMO Pepabo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
Weighted SWOT Analysis of GMO Pepabo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at GMO Pepabo 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 GMO Pepabo 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 GMO Pepabo 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 GMO Pepabo 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 GMO Pepabo needs to make to build a sustainable competitive advantage.
