Tokyo Ichiban Foods (3067) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Tokyo Ichiban Foods (Japan)

Based on various researches at Oak Spring University , Tokyo Ichiban Foods is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Tokyo Ichiban Foods

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tokyo Ichiban Foods can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tokyo Ichiban Foods, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tokyo Ichiban Foods 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Tokyo Ichiban Foods can be done for the following purposes –
1. Strategic planning of Tokyo Ichiban Foods
2. Improving business portfolio management of Tokyo Ichiban Foods
3. Assessing feasibility of the new initiative in Japan
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tokyo Ichiban Foods

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Strengths of Tokyo Ichiban Foods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Tokyo Ichiban Foods are -

Diverse revenue streams

– Tokyo Ichiban Foods is present in almost all the verticals within the Restaurants industry. This has provided Tokyo Ichiban Foods 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.

Ability to recruit top talent

– Tokyo Ichiban Foods is one of the leading players in the Restaurants 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.

Organizational Resilience of Tokyo Ichiban Foods

– The covid-19 pandemic has put organizational resilience at the centre of everthing Tokyo Ichiban Foods does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Effective Research and Development (R&D)

– Tokyo Ichiban Foods has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tokyo Ichiban Foods staying ahead in the Restaurants industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Innovation driven organization

– Tokyo Ichiban Foods is one of the most innovative firm in Restaurants sector.

Sustainable margins compare to other players in Restaurants industry

– Tokyo Ichiban Foods has clearly differentiated products in the market place. This has enabled Tokyo Ichiban Foods to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Tokyo Ichiban Foods to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Tokyo Ichiban Foods has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Restaurants industry. Secondly the value chain collaborators of Tokyo Ichiban Foods have helped the firm to develop new products and bring them quickly to the marketplace.

High switching costs

– The high switching costs that Tokyo Ichiban Foods 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.

Cross disciplinary teams

– Horizontal connected teams at the Tokyo Ichiban Foods 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.

Analytics focus

– Tokyo Ichiban Foods 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 Restaurants 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 Restaurants industry

- digital transformation varies from industry to industry. For Tokyo Ichiban Foods digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tokyo Ichiban Foods 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.

High brand equity

– Tokyo Ichiban Foods has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tokyo Ichiban Foods to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses of Tokyo Ichiban Foods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Tokyo Ichiban Foods are -

Low market penetration in new markets

– Outside its home market of Japan, Tokyo Ichiban Foods needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Tokyo Ichiban Foods has some of the most successful models in the Restaurants industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Tokyo Ichiban Foods should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

Tokyo Ichiban Foods has a high cash cycle compare to other players in the Restaurants 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, Tokyo Ichiban Foods 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 Restaurants industry using digital technology.

Employees’ less understanding of Tokyo Ichiban Foods strategy

– From the outside it seems that the employees of Tokyo Ichiban Foods 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.

Slow decision making process

– As mentioned earlier in the report, Tokyo Ichiban Foods has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Restaurants industry over the last five years. Tokyo Ichiban Foods 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 Tokyo Ichiban Foods supply chain. Even after few cautionary changes, Tokyo Ichiban Foods is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tokyo Ichiban Foods vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, Tokyo Ichiban Foods has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tokyo Ichiban Foods lucrative customers.

Compensation and incentives

– The revenue per employee of Tokyo Ichiban Foods is just above the Restaurants 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 Restaurants industry, Tokyo Ichiban Foods 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.

Lack of clear differentiation of Tokyo Ichiban Foods products

– To increase the profitability and margins on the products, Tokyo Ichiban Foods needs to provide more differentiated products than what it is currently offering in the marketplace.

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Tokyo Ichiban Foods Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Tokyo Ichiban Foods are -

Manufacturing automation

– Tokyo Ichiban Foods can use the latest technology developments to improve its manufacturing and designing process in Restaurants 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Restaurants industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tokyo Ichiban Foods 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. Tokyo Ichiban Foods 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.

Loyalty marketing

– Tokyo Ichiban Foods 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Tokyo Ichiban Foods can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Buying journey improvements

– Tokyo Ichiban Foods can improve the customer journey of consumers in the Restaurants 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Restaurants industry, but it has also influenced the consumer preferences. Tokyo Ichiban Foods can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Better consumer reach

– The expansion of the 5G network will help Tokyo Ichiban Foods to increase its market reach. Tokyo Ichiban Foods 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, Tokyo Ichiban Foods can use these opportunities to build new business models that can help the communities that Tokyo Ichiban Foods operates in. Secondly it can use opportunities from government spending in Restaurants sector.

Leveraging digital technologies

– Tokyo Ichiban Foods 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Tokyo Ichiban Foods 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 Tokyo Ichiban Foods to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Tokyo Ichiban Foods has opened avenues for new revenue streams for the organization in Restaurants industry. This can help Tokyo Ichiban Foods to build a more holistic ecosystem for Tokyo Ichiban Foods products in the Restaurants industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Tokyo Ichiban Foods 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Tokyo Ichiban Foods is facing challenges because of the dominance of functional experts in the organization. Tokyo Ichiban Foods can utilize new technology in the field of Restaurants industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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Threats Tokyo Ichiban Foods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Tokyo Ichiban Foods are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Tokyo Ichiban Foods 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 Tokyo Ichiban Foods prominent markets.

Consumer confidence and its impact on Tokyo Ichiban Foods 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 Restaurants industry and other sectors.

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 Tokyo Ichiban Foods in the Restaurants 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.

Environmental challenges

– Tokyo Ichiban Foods 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. Tokyo Ichiban Foods can take advantage of this fund but it will also bring new competitors in the Restaurants 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 Tokyo Ichiban Foods business can come under increasing regulations regarding data privacy, data security, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Tokyo Ichiban Foods may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Restaurants sector.

Easy access to finance

– Easy access to finance in Restaurants industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tokyo Ichiban Foods 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 Restaurants industry are lowering. It can presents Tokyo Ichiban Foods with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Restaurants sector.

Shortening product life cycle

– it is one of the major threat that Tokyo Ichiban Foods is facing in Restaurants sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Tokyo Ichiban Foods.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Tokyo Ichiban Foods in Restaurants industry. The Restaurants 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.

High dependence on third party suppliers

– Tokyo Ichiban Foods 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.

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Weighted SWOT Analysis of Tokyo Ichiban Foods Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tokyo Ichiban Foods 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 Tokyo Ichiban Foods 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 Tokyo Ichiban Foods 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 Tokyo Ichiban Foods 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 Tokyo Ichiban Foods needs to make to build a sustainable competitive advantage.

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