Muto Seiko Co (7927) SWOT Analysis / TOWS Matrix / MBA Resources
Audio & Video Equipment
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Muto Seiko Co (Japan)
Based on various researches at Oak Spring University , Muto Seiko Co is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Muto Seiko Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Muto Seiko Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Muto Seiko Co 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 Muto Seiko Co can be done for the following purposes –
1. Strategic planning of Muto Seiko Co
2. Improving business portfolio management of Muto Seiko Co
3. Assessing feasibility of the new initiative in Japan
4. Making a Audio & Video Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Muto Seiko Co
Strengths of Muto Seiko Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Muto Seiko Co are -
Highly skilled collaborators
– Muto Seiko Co has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Audio & Video Equipment industry. Secondly the value chain collaborators of Muto Seiko Co have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Muto Seiko Co 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 Muto Seiko Co is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Muto Seiko Co emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Muto Seiko Co 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.
Analytics focus
– Muto Seiko Co 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 Audio & Video Equipment 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.
Organizational Resilience of Muto Seiko Co
– The covid-19 pandemic has put organizational resilience at the centre of everthing Muto Seiko Co does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Audio & Video Equipment industry
- digital transformation varies from industry to industry. For Muto Seiko Co digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Muto Seiko Co 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.
Cross disciplinary teams
– Horizontal connected teams at the Muto Seiko Co 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.
Sustainable margins compare to other players in Audio & Video Equipment industry
– Muto Seiko Co has clearly differentiated products in the market place. This has enabled Muto Seiko Co to fetch slight price premium compare to the competitors in the Audio & Video Equipment industry. The sustainable margins have also helped Muto Seiko Co to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Muto Seiko Co has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Muto Seiko Co 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.
Training and development
– Muto Seiko Co has one of the best training and development program in Consumer Cyclical 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.
Strong track record of project management in the Audio & Video Equipment industry
– Muto Seiko Co is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Muto Seiko Co comprises – understanding the underlying the factors in the Audio & Video Equipment 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.
Weaknesses of Muto Seiko Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Muto Seiko Co are -
Workers concerns about automation
– As automation is fast increasing in the Audio & Video Equipment industry, Muto Seiko Co 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.
Interest costs
– Compare to the competition, Muto Seiko Co 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.
Compensation and incentives
– The revenue per employee of Muto Seiko Co is just above the Audio & Video Equipment 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.
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 Muto Seiko Co supply chain. Even after few cautionary changes, Muto Seiko Co is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Muto Seiko Co vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Muto Seiko Co has a high cash cycle compare to other players in the Audio & Video Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Muto Seiko Co products
– To increase the profitability and margins on the products, Muto Seiko Co needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Muto Seiko Co has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Audio & Video Equipment industry over the last five years. Muto Seiko Co 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.
Need for greater diversity
– Muto Seiko Co 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.
Products dominated business model
– Even though Muto Seiko Co has some of the most successful models in the Audio & Video Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Muto Seiko Co should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Audio & Video Equipment industry
– because of the regulatory requirements in Japan, Muto Seiko Co 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 Audio & Video Equipment industry.
Ability to respond to the competition
– As the decision making is very deliberative at Muto Seiko Co, in the dynamic environment of Audio & Video Equipment industry it has struggled to respond to the nimble upstart competition. Muto Seiko Co has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Muto Seiko Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Muto Seiko Co are -
Manufacturing automation
– Muto Seiko Co can use the latest technology developments to improve its manufacturing and designing process in Audio & Video Equipment 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.
Developing new processes and practices
– Muto Seiko Co can develop new processes and procedures in Audio & Video Equipment 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.
Use of Bitcoin and other crypto currencies for transactions in Audio & Video Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Muto Seiko Co in the Audio & Video Equipment industry. Now Muto Seiko Co can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Muto Seiko Co can use these opportunities to build new business models that can help the communities that Muto Seiko Co operates in. Secondly it can use opportunities from government spending in Audio & Video Equipment sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Muto Seiko Co 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Muto Seiko Co is facing challenges because of the dominance of functional experts in the organization. Muto Seiko Co can utilize new technology in the field of Audio & Video Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Muto Seiko Co 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.
Building a culture of innovation
– managers at Muto Seiko Co 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 Audio & Video Equipment industry.
Using analytics as competitive advantage
– Muto Seiko Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Audio & Video Equipment sector. This continuous investment in analytics has enabled Muto Seiko Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help Muto Seiko Co to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Muto Seiko Co 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Audio & Video Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Muto Seiko Co 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. Muto Seiko Co 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Audio & Video Equipment industry, but it has also influenced the consumer preferences. Muto Seiko Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Muto Seiko Co 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.
Threats Muto Seiko Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Muto Seiko Co are -
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 Muto Seiko Co business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Muto Seiko Co
– 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 Muto Seiko Co.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Audio & Video Equipment industry are lowering. It can presents Muto Seiko Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Audio & Video Equipment sector.
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 Muto Seiko Co.
Consumer confidence and its impact on Muto Seiko Co 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 Audio & Video Equipment industry and other sectors.
Easy access to finance
– Easy access to finance in Audio & Video Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Muto Seiko Co can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Muto Seiko Co has witnessed rapid integration of technology during Covid-19 in the Audio & Video Equipment industry. As one of the leading players in the industry, Muto Seiko Co needs to keep up with the evolution of technology in the Audio & Video Equipment 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Muto Seiko Co 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 Muto Seiko Co prominent markets.
Environmental challenges
– Muto Seiko Co 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. Muto Seiko Co can take advantage of this fund but it will also bring new competitors in the Audio & Video Equipment industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Muto Seiko Co in Audio & Video Equipment industry. The Audio & Video Equipment 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.
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 Muto Seiko Co in the Audio & Video Equipment sector and impact the bottomline of the organization.
Regulatory challenges
– Muto Seiko Co 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 Audio & Video Equipment 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 Muto Seiko Co Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Muto Seiko Co 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 Muto Seiko Co 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 Muto Seiko Co 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 Muto Seiko Co 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 Muto Seiko Co needs to make to build a sustainable competitive advantage.
