SWOT Analysis / TOWS Matrix for Asahi Rubber (Japan)
Based on various researches at Oak Spring University , Asahi Rubber is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Asahi Rubber can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asahi Rubber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asahi Rubber 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 Asahi Rubber can be done for the following purposes –
1. Strategic planning of Asahi Rubber
2. Improving business portfolio management of Asahi Rubber
3. Assessing feasibility of the new initiative in Japan
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Asahi Rubber
Strengths of Asahi Rubber | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asahi Rubber are -
Innovation driven organization
– Asahi Rubber is one of the most innovative firm in Fabricated Plastic & Rubber sector.
High brand equity
– Asahi Rubber has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Asahi Rubber to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Asahi Rubber has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Asahi Rubber staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Asahi Rubber is present in almost all the verticals within the Fabricated Plastic & Rubber industry. This has provided Asahi Rubber 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 Fabricated Plastic & Rubber industry
– Asahi Rubber is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Fabricated Plastic & Rubber industry
– Asahi Rubber has clearly differentiated products in the market place. This has enabled Asahi Rubber to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped Asahi Rubber to invest into research and development (R&D) and innovation.
Training and development
– Asahi Rubber has one of the best training and development program in Basic Materials 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 Asahi Rubber in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Asahi Rubber comprises – understanding the underlying the factors in the Fabricated Plastic & Rubber 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.
Organizational Resilience of Asahi Rubber
– The covid-19 pandemic has put organizational resilience at the centre of everthing Asahi Rubber does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Asahi Rubber has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asahi Rubber 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.
Low bargaining power of suppliers
– Suppliers of Asahi Rubber in the Basic Materials sector have low bargaining power. Asahi Rubber has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Asahi Rubber to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Asahi Rubber | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Asahi Rubber are -
Ability to respond to the competition
– As the decision making is very deliberative at Asahi Rubber, in the dynamic environment of Fabricated Plastic & Rubber industry it has struggled to respond to the nimble upstart competition. Asahi Rubber has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Asahi Rubber has a high cash cycle compare to other players in the Fabricated Plastic & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Asahi Rubber is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but Asahi Rubber needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Asahi Rubber to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
Employees’ less understanding of Asahi Rubber strategy
– From the outside it seems that the employees of Asahi Rubber 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 Asahi Rubber, it seems that company is thinking out the frontier risks that can impact Fabricated Plastic & Rubber 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.
Products dominated business model
– Even though Asahi Rubber has some of the most successful models in the Fabricated Plastic & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Asahi Rubber should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Asahi Rubber has high operating costs in the Fabricated Plastic & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Asahi Rubber lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Asahi Rubber has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fabricated Plastic & Rubber industry over the last five years. Asahi Rubber 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.
Workers concerns about automation
– As automation is fast increasing in the Fabricated Plastic & Rubber industry, Asahi Rubber 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.
High dependence on Asahi Rubber ‘s star products
– The top 2 products and services of Asahi Rubber still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though Asahi Rubber has relatively successful track record of launching new products.
Need for greater diversity
– Asahi Rubber 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.
Asahi Rubber Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Asahi Rubber are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Asahi Rubber in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fabricated Plastic & Rubber industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Asahi Rubber 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Asahi Rubber 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 Asahi Rubber to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Asahi Rubber 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
– Asahi Rubber can use the latest technology developments to improve its manufacturing and designing process in Fabricated Plastic & Rubber 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
– Asahi Rubber has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fabricated Plastic & Rubber sector. This continuous investment in analytics has enabled Asahi Rubber to build a competitive advantage using analytics. The analytics driven competitive advantage can help Asahi Rubber to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Asahi Rubber can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Asahi Rubber 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, Asahi Rubber 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 Asahi Rubber to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Asahi Rubber 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 Fabricated Plastic & Rubber industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Fabricated Plastic & Rubber industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Asahi Rubber 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. Asahi Rubber 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 Asahi Rubber 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 Asahi Rubber to increase its market reach. Asahi Rubber 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 Asahi Rubber External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Asahi Rubber are -
Increasing wage structure of Asahi Rubber
– 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 Asahi Rubber.
Regulatory challenges
– Asahi Rubber 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 Fabricated Plastic & Rubber 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.
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. Asahi Rubber needs to understand the core reasons impacting the Fabricated Plastic & Rubber industry. This will help it in building a better workplace.
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 Asahi Rubber business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Asahi Rubber 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 Asahi Rubber prominent markets.
Consumer confidence and its impact on Asahi Rubber 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 Fabricated Plastic & Rubber industry and other sectors.
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. Asahi Rubber 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Asahi Rubber in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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 Fabricated Plastic & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Asahi Rubber can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Asahi Rubber.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Asahi Rubber with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
High dependence on third party suppliers
– Asahi Rubber 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.
Weighted SWOT Analysis of Asahi Rubber Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Asahi Rubber 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 Asahi Rubber 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 Asahi Rubber 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 Asahi Rubber 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 Asahi Rubber needs to make to build a sustainable competitive advantage.
