SWOT Analysis / TOWS Matrix for Escrit Inc (Japan)
Based on various researches at Oak Spring University , Escrit Inc is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, technology disruption, wage bills are increasing, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Escrit Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Escrit Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Escrit Inc 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 Escrit Inc can be done for the following purposes –
1. Strategic planning of Escrit Inc
2. Improving business portfolio management of Escrit Inc
3. Assessing feasibility of the new initiative in Japan
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Escrit Inc
Strengths of Escrit Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Escrit Inc are -
Sustainable margins compare to other players in Personal Services industry
– Escrit Inc has clearly differentiated products in the market place. This has enabled Escrit Inc to fetch slight price premium compare to the competitors in the Personal Services industry. The sustainable margins have also helped Escrit Inc to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Escrit Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Escrit Inc staying ahead in the Personal Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Escrit Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Escrit Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Escrit Inc is one of the leading players in the Personal 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.
Low bargaining power of suppliers
– Suppliers of Escrit Inc in the Services sector have low bargaining power. Escrit Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Escrit Inc to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Personal Services industry
– Escrit Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Escrit Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Escrit Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Personal Services
– Escrit Inc is one of the leading players in the Personal Services industry in Japan. Over the years it has not only transformed the business landscape in the Personal Services industry in Japan but also across the existing markets. The ability to lead change has enabled Escrit Inc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Escrit Inc in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Escrit Inc is one of the most innovative firm in Personal Services sector.
Learning organization
- Escrit Inc 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 Escrit Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Escrit Inc emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Escrit Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Escrit Inc 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.
Weaknesses of Escrit Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Escrit Inc are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Escrit Inc is slow explore the new channels of communication. These new channels of communication can help Escrit Inc to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.
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 Escrit Inc supply chain. Even after few cautionary changes, Escrit Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Escrit Inc vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Escrit Inc has high operating costs in the Personal Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Escrit Inc lucrative customers.
Lack of clear differentiation of Escrit Inc products
– To increase the profitability and margins on the products, Escrit Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Escrit Inc is just above the Personal Services 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.
Skills based hiring in Personal Services industry
– The stress on hiring functional specialists at Escrit Inc 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.
Ability to respond to the competition
– As the decision making is very deliberative at Escrit Inc, in the dynamic environment of Personal Services industry it has struggled to respond to the nimble upstart competition. Escrit Inc 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 Escrit Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal Services industry have deep experience in developing customer relationships. Marketing department at Escrit Inc can leverage the sales team experience to cultivate customer relationships as Escrit Inc is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Escrit Inc 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 Personal Services industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Escrit Inc is dominated by functional specialists. It is not different from other players in the Personal Services industry, but Escrit Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Escrit Inc to focus more on services in the Personal Services industry rather than just following the product oriented approach.
Products dominated business model
– Even though Escrit Inc has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Escrit Inc should strive to include more intangible value offerings along with its core products and services.
Escrit Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Escrit Inc are -
Building a culture of innovation
– managers at Escrit Inc 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 Personal Services industry.
Leveraging digital technologies
– Escrit Inc 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.
Using analytics as competitive advantage
– Escrit Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal Services sector. This continuous investment in analytics has enabled Escrit Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Escrit Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Escrit Inc can improve the customer journey of consumers in the Personal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Escrit Inc 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 Escrit Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Escrit Inc is facing challenges because of the dominance of functional experts in the organization. Escrit Inc can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 Escrit Inc 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.
Loyalty marketing
– Escrit Inc 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.
Learning at scale
– Online learning technologies has now opened space for Escrit Inc 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Escrit Inc can use these opportunities to build new business models that can help the communities that Escrit Inc operates in. Secondly it can use opportunities from government spending in Personal Services sector.
Creating value in data economy
– The success of analytics program of Escrit Inc has opened avenues for new revenue streams for the organization in Personal Services industry. This can help Escrit Inc to build a more holistic ecosystem for Escrit Inc products in the Personal Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Escrit Inc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Escrit Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Escrit Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Escrit Inc are -
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. Escrit Inc needs to understand the core reasons impacting the Personal Services industry. This will help it in building a better workplace.
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 Escrit Inc in the Personal Services sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Escrit Inc in Personal Services industry. The Personal Services 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.
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. Escrit Inc 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
– Escrit Inc 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 Personal Services industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Escrit Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal Services sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal Services industry are lowering. It can presents Escrit Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.
High dependence on third party suppliers
– Escrit Inc 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.
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 Escrit Inc business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Escrit Inc
– 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 Escrit Inc.
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.
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 Escrit Inc.
Easy access to finance
– Easy access to finance in Personal Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Escrit Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Escrit Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Escrit Inc 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 Escrit Inc 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 Escrit Inc 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 Escrit Inc 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 Escrit Inc needs to make to build a sustainable competitive advantage.
