SWOT Analysis / TOWS Matrix for Satudora Holdings (Japan)
Based on various researches at Oak Spring University , Satudora Holdings is operating in a macro-environment that has been destablized by – wage bills are increasing, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Satudora Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Satudora Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Satudora Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Satudora Holdings 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 Satudora Holdings can be done for the following purposes –
1. Strategic planning of Satudora Holdings
2. Improving business portfolio management of Satudora Holdings
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Satudora Holdings
Strengths of Satudora Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Satudora Holdings are -
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Satudora Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Satudora Holdings 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.
Organizational Resilience of Satudora Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Satudora Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Satudora Holdings 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 Retail (Drugs) 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.
Learning organization
- Satudora Holdings 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 Satudora Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Satudora Holdings emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Satudora Holdings in the Services sector have low bargaining power. Satudora Holdings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Satudora Holdings to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Satudora Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Satudora Holdings 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.
Effective Research and Development (R&D)
– Satudora Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Satudora Holdings staying ahead in the Retail (Drugs) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Satudora Holdings is one of the leading players in the Retail (Drugs) 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.
Innovation driven organization
– Satudora Holdings is one of the most innovative firm in Retail (Drugs) sector.
Diverse revenue streams
– Satudora Holdings is present in almost all the verticals within the Retail (Drugs) industry. This has provided Satudora Holdings 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.
Sustainable margins compare to other players in Retail (Drugs) industry
– Satudora Holdings has clearly differentiated products in the market place. This has enabled Satudora Holdings to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Satudora Holdings to invest into research and development (R&D) and innovation.
Strong track record of project management in the Retail (Drugs) industry
– Satudora Holdings is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Satudora Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Satudora Holdings are -
High dependence on Satudora Holdings ‘s star products
– The top 2 products and services of Satudora Holdings still accounts for major business revenue. This dependence on star products in Retail (Drugs) industry has resulted into insufficient focus on developing new products, even though Satudora Holdings has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Satudora Holdings is just above the Retail (Drugs) 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.
Lack of clear differentiation of Satudora Holdings products
– To increase the profitability and margins on the products, Satudora Holdings needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Satudora Holdings 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 (Drugs) industry using digital technology.
Slow to strategic competitive environment developments
– As Satudora Holdings is one of the leading players in the Retail (Drugs) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Drugs) industry in last five years.
Employees’ less understanding of Satudora Holdings strategy
– From the outside it seems that the employees of Satudora Holdings 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.
Ability to respond to the competition
– As the decision making is very deliberative at Satudora Holdings, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Satudora Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Satudora Holdings needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Satudora Holdings can leverage the sales team experience to cultivate customer relationships as Satudora Holdings is planning to shift buying processes online.
Skills based hiring in Retail (Drugs) industry
– The stress on hiring functional specialists at Satudora Holdings 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.
No frontier risks strategy
– From the 10K / annual statement of Satudora Holdings, it seems that company is thinking out the frontier risks that can impact Retail (Drugs) 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.
Interest costs
– Compare to the competition, Satudora Holdings 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.
Satudora Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Satudora Holdings are -
Developing new processes and practices
– Satudora Holdings can develop new processes and procedures in Retail (Drugs) 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Drugs) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Satudora Holdings in the Retail (Drugs) industry. Now Satudora Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Satudora Holdings 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.
Loyalty marketing
– Satudora Holdings 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Satudora Holdings is facing challenges because of the dominance of functional experts in the organization. Satudora Holdings can utilize new technology in the field of Retail (Drugs) 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. Satudora Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Satudora Holdings to increase its market reach. Satudora Holdings 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Satudora Holdings 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 Satudora Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Satudora Holdings has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Satudora Holdings to build a more holistic ecosystem for Satudora Holdings products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Drugs) industry, but it has also influenced the consumer preferences. Satudora Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Satudora Holdings 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.
Buying journey improvements
– Satudora Holdings can improve the customer journey of consumers in the Retail (Drugs) 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.
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 Satudora Holdings 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.
Threats Satudora Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Satudora Holdings are -
Environmental challenges
– Satudora Holdings needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Satudora Holdings can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.
Consumer confidence and its impact on Satudora Holdings 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 Retail (Drugs) industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Satudora Holdings 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 Satudora Holdings prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Satudora Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Drugs) 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. Satudora Holdings 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.
Regulatory challenges
– Satudora Holdings 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 (Drugs) industry regulations.
Stagnating economy with rate increase
– Satudora Holdings 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 (Drugs) industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Satudora Holdings business can come under increasing regulations regarding data privacy, data security, etc.
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 Satudora Holdings in the Retail (Drugs) sector and impact the bottomline of the organization.
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.
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. Satudora Holdings needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents Satudora Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
High dependence on third party suppliers
– Satudora Holdings 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.
Weighted SWOT Analysis of Satudora Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Satudora Holdings 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 Satudora Holdings 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 Satudora Holdings 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 Satudora Holdings 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 Satudora Holdings needs to make to build a sustainable competitive advantage.