Awa Paper Mfg. (3896) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Awa Paper Mfg. (Japan)
Based on various researches at Oak Spring University , Awa Paper Mfg. is operating in a macro-environment that has been destablized by – there is backlash against globalization, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Awa Paper Mfg. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Awa Paper Mfg., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Awa Paper Mfg. 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 Awa Paper Mfg. can be done for the following purposes –
1. Strategic planning of Awa Paper Mfg.
2. Improving business portfolio management of Awa Paper Mfg.
3. Assessing feasibility of the new initiative in Japan
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Awa Paper Mfg.
Strengths of Awa Paper Mfg. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Awa Paper Mfg. are -
Low bargaining power of suppliers
– Suppliers of Awa Paper Mfg. in the Basic Materials sector have low bargaining power. Awa Paper Mfg. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Awa Paper Mfg. to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Paper & Paper Products industry
– Awa Paper Mfg. has clearly differentiated products in the market place. This has enabled Awa Paper Mfg. to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Awa Paper Mfg. to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Awa Paper Mfg. comprises – understanding the underlying the factors in the Paper & Paper Products industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Awa Paper Mfg. is one of the leading players in the Paper & Paper Products 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.
High switching costs
– The high switching costs that Awa Paper Mfg. 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.
Innovation driven organization
– Awa Paper Mfg. is one of the most innovative firm in Paper & Paper Products sector.
Analytics focus
– Awa Paper Mfg. 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 Paper & Paper Products 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.
Highly skilled collaborators
– Awa Paper Mfg. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Paper & Paper Products industry. Secondly the value chain collaborators of Awa Paper Mfg. have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Awa Paper Mfg. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Awa Paper Mfg. staying ahead in the Paper & Paper Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Awa Paper Mfg. 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 Awa Paper Mfg. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Awa Paper Mfg. emphasize – knowledge, initiative, and innovation.
High brand equity
– Awa Paper Mfg. has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Awa Paper Mfg. to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Awa Paper Mfg. 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.
Weaknesses of Awa Paper Mfg. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Awa Paper Mfg. are -
Ability to respond to the competition
– As the decision making is very deliberative at Awa Paper Mfg., in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Awa Paper Mfg. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Awa Paper Mfg. products
– To increase the profitability and margins on the products, Awa Paper Mfg. needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Awa Paper Mfg. has a high cash cycle compare to other players in the Paper & Paper Products 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, Awa Paper Mfg. 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 Paper & Paper Products industry using digital technology.
Low market penetration in new markets
– Outside its home market of Japan, Awa Paper Mfg. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Awa Paper Mfg. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Paper & Paper Products industry over the last five years. Awa Paper Mfg. 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 Awa Paper Mfg. ‘s star products
– The top 2 products and services of Awa Paper Mfg. still accounts for major business revenue. This dependence on star products in Paper & Paper Products industry has resulted into insufficient focus on developing new products, even though Awa Paper Mfg. has relatively successful track record of launching new products.
Need for greater diversity
– Awa Paper Mfg. 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.
Slow to strategic competitive environment developments
– As Awa Paper Mfg. is one of the leading players in the Paper & Paper Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Paper & Paper Products industry in last five years.
Employees’ less understanding of Awa Paper Mfg. strategy
– From the outside it seems that the employees of Awa Paper Mfg. 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 Awa Paper Mfg. supply chain. Even after few cautionary changes, Awa Paper Mfg. is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Awa Paper Mfg. vulnerable to further global disruptions in South East Asia.
Awa Paper Mfg. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Awa Paper Mfg. are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Awa Paper Mfg. 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.
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. Awa Paper Mfg. can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Awa Paper Mfg. 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.
Leveraging digital technologies
– Awa Paper Mfg. 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
– Awa Paper Mfg. can improve the customer journey of consumers in the Paper & Paper Products 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Awa Paper Mfg. can use these opportunities to build new business models that can help the communities that Awa Paper Mfg. operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Awa Paper Mfg. is facing challenges because of the dominance of functional experts in the organization. Awa Paper Mfg. can utilize new technology in the field of Paper & Paper Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Awa Paper Mfg. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Paper & Paper Products industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Awa Paper Mfg. has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Paper & Paper Products sector. This continuous investment in analytics has enabled Awa Paper Mfg. to build a competitive advantage using analytics. The analytics driven competitive advantage can help Awa Paper Mfg. to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Awa Paper Mfg. 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 Paper & Paper Products industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Awa Paper Mfg. 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. Awa Paper Mfg. 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.
Learning at scale
– Online learning technologies has now opened space for Awa Paper Mfg. 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.
Better consumer reach
– The expansion of the 5G network will help Awa Paper Mfg. to increase its market reach. Awa Paper Mfg. 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.
Threats Awa Paper Mfg. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Awa Paper Mfg. are -
Easy access to finance
– Easy access to finance in Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Awa Paper Mfg. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Awa Paper Mfg. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Paper & Paper Products sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Awa Paper Mfg. may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Paper & Paper Products sector.
High dependence on third party suppliers
– Awa Paper Mfg. 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.
Shortening product life cycle
– it is one of the major threat that Awa Paper Mfg. is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Awa Paper Mfg. in the Paper & Paper Products sector and impact the bottomline of the organization.
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 Awa Paper Mfg. business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Awa Paper Mfg. has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Awa Paper Mfg. needs to keep up with the evolution of technology in the Paper & Paper Products 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.
Environmental challenges
– Awa Paper Mfg. 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. Awa Paper Mfg. can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
Increasing wage structure of Awa Paper Mfg.
– 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 Awa Paper Mfg..
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Awa Paper Mfg. 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 Awa Paper Mfg. prominent markets.
Regulatory challenges
– Awa Paper Mfg. 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 Paper & Paper Products industry regulations.
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.
Weighted SWOT Analysis of Awa Paper Mfg. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Awa Paper Mfg. 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 Awa Paper Mfg. 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 Awa Paper Mfg. 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 Awa Paper Mfg. 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 Awa Paper Mfg. needs to make to build a sustainable competitive advantage.
