SWOT Analysis / TOWS Matrix for Kitazawa Sangyo (Japan)
Based on various researches at Oak Spring University , Kitazawa Sangyo is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kitazawa Sangyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitazawa Sangyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitazawa Sangyo 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 Kitazawa Sangyo can be done for the following purposes –
1. Strategic planning of Kitazawa Sangyo
2. Improving business portfolio management of Kitazawa Sangyo
3. Assessing feasibility of the new initiative in Japan
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kitazawa Sangyo
Strengths of Kitazawa Sangyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitazawa Sangyo are -
Low bargaining power of suppliers
– Suppliers of Kitazawa Sangyo in the Capital Goods sector have low bargaining power. Kitazawa Sangyo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kitazawa Sangyo to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Kitazawa Sangyo comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Effective Research and Development (R&D)
– Kitazawa Sangyo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kitazawa Sangyo staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Kitazawa Sangyo 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 Kitazawa Sangyo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kitazawa Sangyo emphasize – knowledge, initiative, and innovation.
Ability to lead change in Misc. Capital Goods
– Kitazawa Sangyo is one of the leading players in the Misc. Capital Goods industry in Japan. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in Japan but also across the existing markets. The ability to lead change has enabled Kitazawa Sangyo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Kitazawa Sangyo has clearly differentiated products in the market place. This has enabled Kitazawa Sangyo to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Kitazawa Sangyo to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Kitazawa Sangyo is one of the leading players in the Misc. Capital Goods 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.
Training and development
– Kitazawa Sangyo 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.
Superior customer experience
– The customer experience strategy of Kitazawa Sangyo in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Misc. Capital Goods industry
– Kitazawa Sangyo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Kitazawa Sangyo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kitazawa Sangyo 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.
Highly skilled collaborators
– Kitazawa Sangyo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Kitazawa Sangyo have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Kitazawa Sangyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kitazawa Sangyo are -
Low market penetration in new markets
– Outside its home market of Japan, Kitazawa Sangyo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Kitazawa Sangyo ‘s star products
– The top 2 products and services of Kitazawa Sangyo still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Kitazawa Sangyo has relatively successful track record of launching new products.
Lack of clear differentiation of Kitazawa Sangyo products
– To increase the profitability and margins on the products, Kitazawa Sangyo needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Kitazawa Sangyo is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Kitazawa Sangyo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kitazawa Sangyo to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Products dominated business model
– Even though Kitazawa Sangyo has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kitazawa Sangyo should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Kitazawa Sangyo is just above the Misc. Capital Goods 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Kitazawa Sangyo needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Kitazawa Sangyo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Kitazawa Sangyo 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.
Ability to respond to the competition
– As the decision making is very deliberative at Kitazawa Sangyo, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Kitazawa Sangyo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in Japan, Kitazawa Sangyo 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 Misc. Capital Goods industry.
Interest costs
– Compare to the competition, Kitazawa Sangyo 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.
Kitazawa Sangyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kitazawa Sangyo are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Kitazawa Sangyo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Kitazawa Sangyo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kitazawa Sangyo in the Misc. Capital Goods industry. Now Kitazawa Sangyo can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Kitazawa Sangyo can improve the customer journey of consumers in the Misc. Capital Goods 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kitazawa Sangyo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Kitazawa Sangyo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Kitazawa Sangyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kitazawa Sangyo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kitazawa Sangyo 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, Kitazawa Sangyo 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 Kitazawa Sangyo 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
– Kitazawa Sangyo 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.
Better consumer reach
– The expansion of the 5G network will help Kitazawa Sangyo to increase its market reach. Kitazawa Sangyo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kitazawa Sangyo to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Kitazawa Sangyo to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kitazawa Sangyo is facing challenges because of the dominance of functional experts in the organization. Kitazawa Sangyo can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Kitazawa Sangyo has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Kitazawa Sangyo to build a more holistic ecosystem for Kitazawa Sangyo products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Kitazawa Sangyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kitazawa Sangyo are -
Shortening product life cycle
– it is one of the major threat that Kitazawa Sangyo is facing in Misc. Capital Goods 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 Kitazawa Sangyo in the Misc. Capital Goods sector and impact the bottomline of the organization.
Environmental challenges
– Kitazawa Sangyo 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. Kitazawa Sangyo can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods 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 Kitazawa Sangyo business can come under increasing regulations regarding data privacy, data security, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Kitazawa Sangyo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kitazawa Sangyo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Consumer confidence and its impact on Kitazawa Sangyo 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 Misc. Capital Goods industry and other sectors.
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 Kitazawa Sangyo.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kitazawa Sangyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kitazawa Sangyo 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 Kitazawa Sangyo prominent markets.
Regulatory challenges
– Kitazawa Sangyo 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 Misc. Capital Goods industry regulations.
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. Kitazawa Sangyo needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kitazawa Sangyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kitazawa Sangyo 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 Kitazawa Sangyo 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 Kitazawa Sangyo 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 Kitazawa Sangyo 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 Kitazawa Sangyo needs to make to build a sustainable competitive advantage.
