Keifuku Electric Railroad (9049) SWOT Analysis / TOWS Matrix / MBA Resources
Railroads
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Keifuku Electric Railroad (Japan)
Based on various researches at Oak Spring University , Keifuku Electric Railroad is operating in a macro-environment that has been destablized by – technology disruption, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Keifuku Electric Railroad
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Keifuku Electric Railroad can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Keifuku Electric Railroad, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Keifuku Electric Railroad 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 Keifuku Electric Railroad can be done for the following purposes –
1. Strategic planning of Keifuku Electric Railroad
2. Improving business portfolio management of Keifuku Electric Railroad
3. Assessing feasibility of the new initiative in Japan
4. Making a Railroads sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Keifuku Electric Railroad
Strengths of Keifuku Electric Railroad | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Keifuku Electric Railroad are -
Successful track record of launching new products
– Keifuku Electric Railroad has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Keifuku Electric Railroad 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.
Ability to recruit top talent
– Keifuku Electric Railroad is one of the leading players in the Railroads 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.
Analytics focus
– Keifuku Electric Railroad 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 Railroads 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.
Digital Transformation in Railroads industry
- digital transformation varies from industry to industry. For Keifuku Electric Railroad digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Keifuku Electric Railroad 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.
Low bargaining power of suppliers
– Suppliers of Keifuku Electric Railroad in the Transportation sector have low bargaining power. Keifuku Electric Railroad has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Keifuku Electric Railroad to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Keifuku Electric Railroad 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.
High brand equity
– Keifuku Electric Railroad has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Keifuku Electric Railroad to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Railroads
– Keifuku Electric Railroad is one of the leading players in the Railroads industry in Japan. Over the years it has not only transformed the business landscape in the Railroads industry in Japan but also across the existing markets. The ability to lead change has enabled Keifuku Electric Railroad in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Keifuku Electric Railroad has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Railroads industry. Secondly the value chain collaborators of Keifuku Electric Railroad have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Keifuku Electric Railroad has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Keifuku Electric Railroad staying ahead in the Railroads industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Keifuku Electric Railroad is present in almost all the verticals within the Railroads industry. This has provided Keifuku Electric Railroad 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.
Strong track record of project management in the Railroads industry
– Keifuku Electric Railroad 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 Keifuku Electric Railroad | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Keifuku Electric Railroad are -
Increasing silos among functional specialists
– The organizational structure of Keifuku Electric Railroad is dominated by functional specialists. It is not different from other players in the Railroads industry, but Keifuku Electric Railroad needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Keifuku Electric Railroad to focus more on services in the Railroads industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Keifuku Electric Railroad has a high cash cycle compare to other players in the Railroads industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Keifuku Electric Railroad 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 Railroads industry using digital technology.
Employees’ less understanding of Keifuku Electric Railroad strategy
– From the outside it seems that the employees of Keifuku Electric Railroad 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.
No frontier risks strategy
– From the 10K / annual statement of Keifuku Electric Railroad, it seems that company is thinking out the frontier risks that can impact Railroads 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.
Lack of clear differentiation of Keifuku Electric Railroad products
– To increase the profitability and margins on the products, Keifuku Electric Railroad needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Keifuku Electric Railroad ‘s star products
– The top 2 products and services of Keifuku Electric Railroad still accounts for major business revenue. This dependence on star products in Railroads industry has resulted into insufficient focus on developing new products, even though Keifuku Electric Railroad has relatively successful track record of launching new products.
Need for greater diversity
– Keifuku Electric Railroad 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 Railroads industry
– The stress on hiring functional specialists at Keifuku Electric Railroad 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 operating costs
– Compare to the competitors, Keifuku Electric Railroad has high operating costs in the Railroads industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Keifuku Electric Railroad lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Keifuku Electric Railroad is slow explore the new channels of communication. These new channels of communication can help Keifuku Electric Railroad to provide better information regarding Railroads products and services. It can also build an online community to further reach out to potential customers.
Keifuku Electric Railroad Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Keifuku Electric Railroad are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Keifuku Electric Railroad 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Keifuku Electric Railroad 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 Keifuku Electric Railroad to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Railroads industry, but it has also influenced the consumer preferences. Keifuku Electric Railroad can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Keifuku Electric Railroad 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
– Keifuku Electric Railroad can use the latest technology developments to improve its manufacturing and designing process in Railroads 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.
Using analytics as competitive advantage
– Keifuku Electric Railroad has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Railroads sector. This continuous investment in analytics has enabled Keifuku Electric Railroad to build a competitive advantage using analytics. The analytics driven competitive advantage can help Keifuku Electric Railroad to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Keifuku Electric Railroad can develop new processes and procedures in Railroads 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Keifuku Electric Railroad in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Railroads industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Keifuku Electric Railroad to increase its market reach. Keifuku Electric Railroad 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.
Leveraging digital technologies
– Keifuku Electric Railroad 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.
Use of Bitcoin and other crypto currencies for transactions in Railroads industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Keifuku Electric Railroad in the Railroads industry. Now Keifuku Electric Railroad can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Railroads industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Keifuku Electric Railroad 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. Keifuku Electric Railroad 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.
Building a culture of innovation
– managers at Keifuku Electric Railroad 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 Railroads industry.
Threats Keifuku Electric Railroad External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Keifuku Electric Railroad are -
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 Keifuku Electric Railroad.
Increasing wage structure of Keifuku Electric Railroad
– 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 Keifuku Electric Railroad.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Keifuku Electric Railroad in Railroads industry. The Railroads 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 Railroads industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Keifuku Electric Railroad can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Stagnating economy with rate increase
– Keifuku Electric Railroad 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 Railroads industry.
Consumer confidence and its impact on Keifuku Electric Railroad 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 Railroads industry and other sectors.
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.
Environmental challenges
– Keifuku Electric Railroad 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. Keifuku Electric Railroad can take advantage of this fund but it will also bring new competitors in the Railroads industry.
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. Keifuku Electric Railroad needs to understand the core reasons impacting the Railroads industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Keifuku Electric Railroad 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 Keifuku Electric Railroad prominent markets.
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 Keifuku Electric Railroad in the Railroads sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Keifuku Electric Railroad has witnessed rapid integration of technology during Covid-19 in the Railroads industry. As one of the leading players in the industry, Keifuku Electric Railroad needs to keep up with the evolution of technology in the Railroads 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.
Weighted SWOT Analysis of Keifuku Electric Railroad Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Keifuku Electric Railroad 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 Keifuku Electric Railroad 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 Keifuku Electric Railroad 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 Keifuku Electric Railroad 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 Keifuku Electric Railroad needs to make to build a sustainable competitive advantage.