SWOT Analysis / TOWS Matrix for Daiko Denshi Tsushin (Japan)
Based on various researches at Oak Spring University , Daiko Denshi Tsushin is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing commodity prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
there is backlash against globalization, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Daiko Denshi Tsushin
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daiko Denshi Tsushin can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daiko Denshi Tsushin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daiko Denshi Tsushin 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 Daiko Denshi Tsushin can be done for the following purposes –
1. Strategic planning of Daiko Denshi Tsushin
2. Improving business portfolio management of Daiko Denshi Tsushin
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Technology) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daiko Denshi Tsushin
Strengths of Daiko Denshi Tsushin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daiko Denshi Tsushin are -
High brand equity
– Daiko Denshi Tsushin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daiko Denshi Tsushin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Daiko Denshi Tsushin is present in almost all the verticals within the Retail (Technology) industry. This has provided Daiko Denshi Tsushin 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.
Superior customer experience
– The customer experience strategy of Daiko Denshi Tsushin in Retail (Technology) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Daiko Denshi Tsushin has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Technology) industry. Secondly the value chain collaborators of Daiko Denshi Tsushin have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Daiko Denshi Tsushin in the Services sector have low bargaining power. Daiko Denshi Tsushin has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daiko Denshi Tsushin to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Daiko Denshi Tsushin is one of the most innovative firm in Retail (Technology) sector.
Successful track record of launching new products
– Daiko Denshi Tsushin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daiko Denshi Tsushin 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 recruit top talent
– Daiko Denshi Tsushin is one of the leading players in the Retail (Technology) 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.
Sustainable margins compare to other players in Retail (Technology) industry
– Daiko Denshi Tsushin has clearly differentiated products in the market place. This has enabled Daiko Denshi Tsushin to fetch slight price premium compare to the competitors in the Retail (Technology) industry. The sustainable margins have also helped Daiko Denshi Tsushin to invest into research and development (R&D) and innovation.
Organizational Resilience of Daiko Denshi Tsushin
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daiko Denshi Tsushin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Daiko Denshi Tsushin 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.
Digital Transformation in Retail (Technology) industry
- digital transformation varies from industry to industry. For Daiko Denshi Tsushin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daiko Denshi Tsushin 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.
Weaknesses of Daiko Denshi Tsushin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daiko Denshi Tsushin are -
High dependence on Daiko Denshi Tsushin ‘s star products
– The top 2 products and services of Daiko Denshi Tsushin still accounts for major business revenue. This dependence on star products in Retail (Technology) industry has resulted into insufficient focus on developing new products, even though Daiko Denshi Tsushin has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Daiko Denshi Tsushin 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 Retail (Technology) industry using digital technology.
Compensation and incentives
– The revenue per employee of Daiko Denshi Tsushin is just above the Retail (Technology) 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.
Slow decision making process
– As mentioned earlier in the report, Daiko Denshi Tsushin has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Technology) industry over the last five years. Daiko Denshi Tsushin 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.
Increasing silos among functional specialists
– The organizational structure of Daiko Denshi Tsushin is dominated by functional specialists. It is not different from other players in the Retail (Technology) industry, but Daiko Denshi Tsushin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daiko Denshi Tsushin to focus more on services in the Retail (Technology) 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, Daiko Denshi Tsushin is slow explore the new channels of communication. These new channels of communication can help Daiko Denshi Tsushin to provide better information regarding Retail (Technology) products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Daiko Denshi Tsushin strategy
– From the outside it seems that the employees of Daiko Denshi Tsushin 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.
No frontier risks strategy
– From the 10K / annual statement of Daiko Denshi Tsushin, it seems that company is thinking out the frontier risks that can impact Retail (Technology) 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.
Products dominated business model
– Even though Daiko Denshi Tsushin has some of the most successful models in the Retail (Technology) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Daiko Denshi Tsushin should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Retail (Technology) industry
– The stress on hiring functional specialists at Daiko Denshi Tsushin 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.
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 Daiko Denshi Tsushin supply chain. Even after few cautionary changes, Daiko Denshi Tsushin is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daiko Denshi Tsushin vulnerable to further global disruptions in South East Asia.
Daiko Denshi Tsushin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daiko Denshi Tsushin are -
Leveraging digital technologies
– Daiko Denshi Tsushin 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Technology) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daiko Denshi Tsushin in the Retail (Technology) industry. Now Daiko Denshi Tsushin can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daiko Denshi Tsushin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Daiko Denshi Tsushin has opened avenues for new revenue streams for the organization in Retail (Technology) industry. This can help Daiko Denshi Tsushin to build a more holistic ecosystem for Daiko Denshi Tsushin products in the Retail (Technology) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Daiko Denshi Tsushin 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 Retail (Technology) industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daiko Denshi Tsushin in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Technology) industry, and it will provide faster access to the consumers.
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 Daiko Denshi Tsushin 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.
Buying journey improvements
– Daiko Denshi Tsushin can improve the customer journey of consumers in the Retail (Technology) 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 Daiko Denshi Tsushin 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 Daiko Denshi Tsushin to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daiko Denshi Tsushin can use these opportunities to build new business models that can help the communities that Daiko Denshi Tsushin operates in. Secondly it can use opportunities from government spending in Retail (Technology) sector.
Better consumer reach
– The expansion of the 5G network will help Daiko Denshi Tsushin to increase its market reach. Daiko Denshi Tsushin 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, Daiko Denshi Tsushin is facing challenges because of the dominance of functional experts in the organization. Daiko Denshi Tsushin can utilize new technology in the field of Retail (Technology) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Daiko Denshi Tsushin can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Daiko Denshi Tsushin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daiko Denshi Tsushin are -
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.
Easy access to finance
– Easy access to finance in Retail (Technology) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daiko Denshi Tsushin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Daiko Denshi Tsushin.
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. Daiko Denshi Tsushin 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.
Stagnating economy with rate increase
– Daiko Denshi Tsushin 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 Retail (Technology) industry.
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. Daiko Denshi Tsushin needs to understand the core reasons impacting the Retail (Technology) industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daiko Denshi Tsushin in Retail (Technology) industry. The Retail (Technology) 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Technology) industry are lowering. It can presents Daiko Denshi Tsushin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Technology) sector.
Technology acceleration in Forth Industrial Revolution
– Daiko Denshi Tsushin has witnessed rapid integration of technology during Covid-19 in the Retail (Technology) industry. As one of the leading players in the industry, Daiko Denshi Tsushin needs to keep up with the evolution of technology in the Retail (Technology) 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.
Regulatory challenges
– Daiko Denshi Tsushin 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 Retail (Technology) industry regulations.
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 Daiko Denshi Tsushin
– 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 Daiko Denshi Tsushin.
Shortening product life cycle
– it is one of the major threat that Daiko Denshi Tsushin is facing in Retail (Technology) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Daiko Denshi Tsushin Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daiko Denshi Tsushin 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 Daiko Denshi Tsushin 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 Daiko Denshi Tsushin 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 Daiko Denshi Tsushin 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 Daiko Denshi Tsushin needs to make to build a sustainable competitive advantage.