Toyo Gosei (4970) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Toyo Gosei (Japan)

Based on various researches at Oak Spring University , Toyo Gosei is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Toyo Gosei

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

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

The strengths of Toyo Gosei are -

Analytics focus

– Toyo Gosei 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 Photography 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.

High switching costs

– The high switching costs that Toyo Gosei 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.

Low bargaining power of suppliers

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

Superior customer experience

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

Successful track record of launching new products

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

Organizational Resilience of Toyo Gosei

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

Highly skilled collaborators

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

Ability to lead change in Photography

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

High brand equity

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

Sustainable margins compare to other players in Photography industry

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

Strong track record of project management in the Photography industry

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

Diverse revenue streams

– Toyo Gosei is present in almost all the verticals within the Photography industry. This has provided Toyo Gosei 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.

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

The weaknesses of Toyo Gosei are -

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

Products dominated business model

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

Need for greater diversity

– Toyo Gosei 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.

Ability to respond to the competition

– As the decision making is very deliberative at Toyo Gosei, in the dynamic environment of Photography industry it has struggled to respond to the nimble upstart competition. Toyo Gosei 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, Toyo Gosei is slow explore the new channels of communication. These new channels of communication can help Toyo Gosei to provide better information regarding Photography products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

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

Low market penetration in new markets

– Outside its home market of Japan, Toyo Gosei needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Capital Spending Reduction

– Even during the low interest decade, Toyo Gosei 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 Photography industry using digital technology.

Lack of clear differentiation of Toyo Gosei products

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

High cash cycle compare to competitors

Toyo Gosei has a high cash cycle compare to other players in the Photography industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Interest costs

– Compare to the competition, Toyo Gosei 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.

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

The opportunities of Toyo Gosei are -

Manufacturing automation

– Toyo Gosei can use the latest technology developments to improve its manufacturing and designing process in Photography 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.

Creating value in data economy

– The success of analytics program of Toyo Gosei has opened avenues for new revenue streams for the organization in Photography industry. This can help Toyo Gosei to build a more holistic ecosystem for Toyo Gosei products in the Photography industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Better consumer reach

– The expansion of the 5G network will help Toyo Gosei to increase its market reach. Toyo Gosei 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.

Loyalty marketing

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

Building a culture of innovation

– managers at Toyo Gosei 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 Photography industry.

Harnessing reconfiguration of the global supply chains

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

Remote work and new talent hiring opportunities

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

Learning at scale

– Online learning technologies has now opened space for Toyo Gosei 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Photography industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Toyo Gosei 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. Toyo Gosei 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.

Developing new processes and practices

– Toyo Gosei can develop new processes and procedures in Photography 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Photography industry, but it has also influenced the consumer preferences. Toyo Gosei can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Buying journey improvements

– Toyo Gosei can improve the customer journey of consumers in the Photography 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toyo Gosei can use these opportunities to build new business models that can help the communities that Toyo Gosei operates in. Secondly it can use opportunities from government spending in Photography sector.

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

The threats of Toyo Gosei are -

Stagnating economy with rate increase

– Toyo Gosei 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 Photography industry.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Toyo Gosei 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 Toyo Gosei prominent markets.

Learning curve for new practices

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

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. Toyo Gosei 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.

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 Toyo Gosei.

Consumer confidence and its impact on Toyo Gosei 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 Photography industry and other sectors.

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. Toyo Gosei needs to understand the core reasons impacting the Photography industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Photography industry are lowering. It can presents Toyo Gosei with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Photography sector.

Technology acceleration in Forth Industrial Revolution

– Toyo Gosei has witnessed rapid integration of technology during Covid-19 in the Photography industry. As one of the leading players in the industry, Toyo Gosei needs to keep up with the evolution of technology in the Photography 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.

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 Toyo Gosei in the Photography sector and impact the bottomline of the organization.

Increasing wage structure of Toyo Gosei

– 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 Toyo Gosei.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Toyo Gosei in Photography industry. The Photography 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.

Weighted SWOT Analysis of Toyo Gosei Template, Example

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

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