SWOT Analysis / TOWS Matrix for Kikukawa Enterprise (Japan)
Based on various researches at Oak Spring University , Kikukawa Enterprise is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
there is backlash against globalization, increasing commodity prices, etc
Introduction to SWOT Analysis of Kikukawa Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kikukawa Enterprise can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kikukawa Enterprise, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kikukawa Enterprise 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 Kikukawa Enterprise can be done for the following purposes –
1. Strategic planning of Kikukawa Enterprise
2. Improving business portfolio management of Kikukawa Enterprise
3. Assessing feasibility of the new initiative in Japan
4. Making a Constr. & Agric. Machinery sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kikukawa Enterprise
Strengths of Kikukawa Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kikukawa Enterprise are -
Organizational Resilience of Kikukawa Enterprise
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kikukawa Enterprise does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Kikukawa Enterprise has one of the best training and development program in Capital Goods industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Kikukawa Enterprise is one of the leading players in the Constr. & Agric. Machinery 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.
Digital Transformation in Constr. & Agric. Machinery industry
- digital transformation varies from industry to industry. For Kikukawa Enterprise digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kikukawa Enterprise 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.
Diverse revenue streams
– Kikukawa Enterprise is present in almost all the verticals within the Constr. & Agric. Machinery industry. This has provided Kikukawa Enterprise 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.
Cross disciplinary teams
– Horizontal connected teams at the Kikukawa Enterprise 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.
Innovation driven organization
– Kikukawa Enterprise is one of the most innovative firm in Constr. & Agric. Machinery sector.
Low bargaining power of suppliers
– Suppliers of Kikukawa Enterprise in the Capital Goods sector have low bargaining power. Kikukawa Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kikukawa Enterprise to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Kikukawa Enterprise has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kikukawa Enterprise to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Kikukawa Enterprise has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kikukawa Enterprise staying ahead in the Constr. & Agric. Machinery industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Constr. & Agric. Machinery industry
– Kikukawa Enterprise is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Constr. & Agric. Machinery industry
– Kikukawa Enterprise has clearly differentiated products in the market place. This has enabled Kikukawa Enterprise to fetch slight price premium compare to the competitors in the Constr. & Agric. Machinery industry. The sustainable margins have also helped Kikukawa Enterprise to invest into research and development (R&D) and innovation.
Weaknesses of Kikukawa Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kikukawa Enterprise are -
Slow decision making process
– As mentioned earlier in the report, Kikukawa Enterprise has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Constr. & Agric. Machinery industry over the last five years. Kikukawa Enterprise 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.
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 Kikukawa Enterprise supply chain. Even after few cautionary changes, Kikukawa Enterprise is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kikukawa Enterprise vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Japan, Kikukawa Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Kikukawa Enterprise 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.
Skills based hiring in Constr. & Agric. Machinery industry
– The stress on hiring functional specialists at Kikukawa Enterprise 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 cash cycle compare to competitors
Kikukawa Enterprise has a high cash cycle compare to other players in the Constr. & Agric. Machinery industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Kikukawa Enterprise is just above the Constr. & Agric. Machinery 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.
Products dominated business model
– Even though Kikukawa Enterprise has some of the most successful models in the Constr. & Agric. Machinery industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kikukawa Enterprise should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Kikukawa Enterprise is dominated by functional specialists. It is not different from other players in the Constr. & Agric. Machinery industry, but Kikukawa Enterprise needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kikukawa Enterprise to focus more on services in the Constr. & Agric. Machinery industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Kikukawa Enterprise has high operating costs in the Constr. & Agric. Machinery industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kikukawa Enterprise lucrative customers.
High dependence on Kikukawa Enterprise ‘s star products
– The top 2 products and services of Kikukawa Enterprise still accounts for major business revenue. This dependence on star products in Constr. & Agric. Machinery industry has resulted into insufficient focus on developing new products, even though Kikukawa Enterprise has relatively successful track record of launching new products.
Kikukawa Enterprise Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kikukawa Enterprise are -
Developing new processes and practices
– Kikukawa Enterprise can develop new processes and procedures in Constr. & Agric. Machinery 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.
Building a culture of innovation
– managers at Kikukawa Enterprise 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 Constr. & Agric. Machinery 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. Kikukawa Enterprise can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kikukawa Enterprise in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Constr. & Agric. Machinery industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Constr. & Agric. Machinery industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kikukawa Enterprise in the Constr. & Agric. Machinery industry. Now Kikukawa Enterprise 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 Kikukawa Enterprise can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Kikukawa Enterprise can use the latest technology developments to improve its manufacturing and designing process in Constr. & Agric. Machinery 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 Kikukawa Enterprise to increase its market reach. Kikukawa Enterprise 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kikukawa Enterprise can use these opportunities to build new business models that can help the communities that Kikukawa Enterprise operates in. Secondly it can use opportunities from government spending in Constr. & Agric. Machinery sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kikukawa Enterprise 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 Kikukawa Enterprise to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kikukawa Enterprise 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
– Kikukawa Enterprise 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, Kikukawa Enterprise is facing challenges because of the dominance of functional experts in the organization. Kikukawa Enterprise can utilize new technology in the field of Constr. & Agric. Machinery industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Kikukawa Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kikukawa Enterprise 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 Kikukawa Enterprise business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Kikukawa Enterprise 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 Constr. & Agric. Machinery industry regulations.
Increasing wage structure of Kikukawa Enterprise
– 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 Kikukawa Enterprise.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kikukawa Enterprise 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 Kikukawa Enterprise prominent markets.
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.
Technology acceleration in Forth Industrial Revolution
– Kikukawa Enterprise has witnessed rapid integration of technology during Covid-19 in the Constr. & Agric. Machinery industry. As one of the leading players in the industry, Kikukawa Enterprise needs to keep up with the evolution of technology in the Constr. & Agric. Machinery 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 Kikukawa Enterprise in the Constr. & Agric. Machinery sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Kikukawa Enterprise 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 Constr. & Agric. Machinery industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kikukawa Enterprise may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Constr. & Agric. Machinery 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. Kikukawa Enterprise 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.
High dependence on third party suppliers
– Kikukawa Enterprise 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kikukawa Enterprise in Constr. & Agric. Machinery industry. The Constr. & Agric. Machinery 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 Kikukawa Enterprise Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kikukawa Enterprise 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 Kikukawa Enterprise 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 Kikukawa Enterprise 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 Kikukawa Enterprise 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 Kikukawa Enterprise needs to make to build a sustainable competitive advantage.