SWOT Analysis / TOWS Matrix for Sugita Ace (Japan)
Based on various researches at Oak Spring University , Sugita Ace 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, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing energy prices, technology disruption,
wage bills are increasing, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sugita Ace can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sugita Ace, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sugita Ace 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 Sugita Ace can be done for the following purposes –
1. Strategic planning of Sugita Ace
2. Improving business portfolio management of Sugita Ace
3. Assessing feasibility of the new initiative in Japan
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sugita Ace
Strengths of Sugita Ace | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sugita Ace are -
Low bargaining power of suppliers
– Suppliers of Sugita Ace in the Capital Goods sector have low bargaining power. Sugita Ace has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sugita Ace to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Constr. - Supplies & Fixtures industry
– Sugita Ace has clearly differentiated products in the market place. This has enabled Sugita Ace to fetch slight price premium compare to the competitors in the Constr. - Supplies & Fixtures industry. The sustainable margins have also helped Sugita Ace to invest into research and development (R&D) and innovation.
Innovation driven organization
– Sugita Ace is one of the most innovative firm in Constr. - Supplies & Fixtures sector.
Analytics focus
– Sugita Ace 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 Constr. - Supplies & Fixtures 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.
Ability to recruit top talent
– Sugita Ace is one of the leading players in the Constr. - Supplies & Fixtures 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.
Effective Research and Development (R&D)
– Sugita Ace has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sugita Ace staying ahead in the Constr. - Supplies & Fixtures industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Constr. - Supplies & Fixtures
– Sugita Ace is one of the leading players in the Constr. - Supplies & Fixtures industry in Japan. Over the years it has not only transformed the business landscape in the Constr. - Supplies & Fixtures industry in Japan but also across the existing markets. The ability to lead change has enabled Sugita Ace in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Sugita Ace has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sugita Ace to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Sugita Ace 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 Constr. - Supplies & Fixtures industry
- digital transformation varies from industry to industry. For Sugita Ace digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sugita Ace 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.
Learning organization
- Sugita Ace 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 Sugita Ace is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sugita Ace emphasize – knowledge, initiative, and innovation.
Training and development
– Sugita Ace 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.
Weaknesses of Sugita Ace | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sugita Ace are -
Interest costs
– Compare to the competition, Sugita Ace 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sugita Ace is slow explore the new channels of communication. These new channels of communication can help Sugita Ace to provide better information regarding Constr. - Supplies & Fixtures products and services. It can also build an online community to further reach out to potential customers.
High dependence on Sugita Ace ‘s star products
– The top 2 products and services of Sugita Ace still accounts for major business revenue. This dependence on star products in Constr. - Supplies & Fixtures industry has resulted into insufficient focus on developing new products, even though Sugita Ace has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Sugita Ace 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. - Supplies & Fixtures industry over the last five years. Sugita Ace 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 cash cycle compare to competitors
Sugita Ace has a high cash cycle compare to other players in the Constr. - Supplies & Fixtures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Sugita Ace needs to have more collaboration between its sales team and marketing team. Sales professionals in the Constr. - Supplies & Fixtures industry have deep experience in developing customer relationships. Marketing department at Sugita Ace can leverage the sales team experience to cultivate customer relationships as Sugita Ace is planning to shift buying processes online.
Employees’ less understanding of Sugita Ace strategy
– From the outside it seems that the employees of Sugita Ace 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.
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 Sugita Ace supply chain. Even after few cautionary changes, Sugita Ace is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sugita Ace vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Sugita Ace is dominated by functional specialists. It is not different from other players in the Constr. - Supplies & Fixtures industry, but Sugita Ace needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sugita Ace to focus more on services in the Constr. - Supplies & Fixtures industry rather than just following the product oriented approach.
Lack of clear differentiation of Sugita Ace products
– To increase the profitability and margins on the products, Sugita Ace needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Constr. - Supplies & Fixtures industry
– because of the regulatory requirements in Japan, Sugita Ace is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Constr. - Supplies & Fixtures industry.
Sugita Ace Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sugita Ace are -
Buying journey improvements
– Sugita Ace can improve the customer journey of consumers in the Constr. - Supplies & Fixtures 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.
Learning at scale
– Online learning technologies has now opened space for Sugita Ace 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 Constr. - Supplies & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sugita Ace 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. Sugita Ace 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.
Creating value in data economy
– The success of analytics program of Sugita Ace has opened avenues for new revenue streams for the organization in Constr. - Supplies & Fixtures industry. This can help Sugita Ace to build a more holistic ecosystem for Sugita Ace products in the Constr. - Supplies & Fixtures industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Constr. - Supplies & Fixtures industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sugita Ace in the Constr. - Supplies & Fixtures industry. Now Sugita Ace can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Sugita Ace 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.
Developing new processes and practices
– Sugita Ace can develop new processes and procedures in Constr. - Supplies & Fixtures 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 Sugita Ace 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. - Supplies & Fixtures industry.
Better consumer reach
– The expansion of the 5G network will help Sugita Ace to increase its market reach. Sugita Ace 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.
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. Sugita Ace can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sugita Ace 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 Sugita Ace to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Sugita Ace 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Constr. - Supplies & Fixtures industry, but it has also influenced the consumer preferences. Sugita Ace can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Sugita Ace External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sugita Ace are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents Sugita Ace with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures sector.
Consumer confidence and its impact on Sugita Ace 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 Constr. - Supplies & Fixtures industry and other sectors.
Environmental challenges
– Sugita Ace 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. Sugita Ace can take advantage of this fund but it will also bring new competitors in the Constr. - Supplies & Fixtures 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 Sugita Ace business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sugita Ace in Constr. - Supplies & Fixtures industry. The Constr. - Supplies & Fixtures 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.
Easy access to finance
– Easy access to finance in Constr. - Supplies & Fixtures industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sugita Ace can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Sugita Ace 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. - Supplies & Fixtures industry regulations.
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 Sugita Ace.
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 Sugita Ace in the Constr. - Supplies & Fixtures 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.
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. Sugita Ace 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
– Sugita Ace 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. - Supplies & Fixtures industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sugita Ace 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 Sugita Ace prominent markets.
Weighted SWOT Analysis of Sugita Ace Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sugita Ace 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 Sugita Ace 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 Sugita Ace 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 Sugita Ace 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 Sugita Ace needs to make to build a sustainable competitive advantage.
