Sonocom (7902) SWOT Analysis / TOWS Matrix / MBA Resources
Printing Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sonocom (Japan)
Based on various researches at Oak Spring University , Sonocom is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, technology disruption, there is backlash against globalization,
geopolitical disruptions, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sonocom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sonocom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sonocom 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 Sonocom can be done for the following purposes –
1. Strategic planning of Sonocom
2. Improving business portfolio management of Sonocom
3. Assessing feasibility of the new initiative in Japan
4. Making a Printing Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sonocom
Strengths of Sonocom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sonocom are -
High switching costs
– The high switching costs that Sonocom 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.
Digital Transformation in Printing Services industry
- digital transformation varies from industry to industry. For Sonocom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sonocom 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.
Strong track record of project management in the Printing Services industry
– Sonocom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Sonocom in the Services sector have low bargaining power. Sonocom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sonocom to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Sonocom is one of the leading players in the Printing Services 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.
Highly skilled collaborators
– Sonocom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing Services industry. Secondly the value chain collaborators of Sonocom have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Sonocom
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sonocom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Sonocom in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Sonocom 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 Sonocom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sonocom emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Printing Services industry
– Sonocom has clearly differentiated products in the market place. This has enabled Sonocom to fetch slight price premium compare to the competitors in the Printing Services industry. The sustainable margins have also helped Sonocom to invest into research and development (R&D) and innovation.
Ability to lead change in Printing Services
– Sonocom is one of the leading players in the Printing Services industry in Japan. Over the years it has not only transformed the business landscape in the Printing Services industry in Japan but also across the existing markets. The ability to lead change has enabled Sonocom in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Sonocom is present in almost all the verticals within the Printing Services industry. This has provided Sonocom 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.
Weaknesses of Sonocom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sonocom are -
Lack of clear differentiation of Sonocom products
– To increase the profitability and margins on the products, Sonocom needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sonocom is slow explore the new channels of communication. These new channels of communication can help Sonocom to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Sonocom has some of the most successful models in the Printing Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sonocom should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Sonocom, it seems that company is thinking out the frontier risks that can impact Printing Services 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.
Employees’ less understanding of Sonocom strategy
– From the outside it seems that the employees of Sonocom 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.
Increasing silos among functional specialists
– The organizational structure of Sonocom is dominated by functional specialists. It is not different from other players in the Printing Services industry, but Sonocom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sonocom to focus more on services in the Printing Services industry rather than just following the product oriented approach.
High dependence on Sonocom ‘s star products
– The top 2 products and services of Sonocom still accounts for major business revenue. This dependence on star products in Printing Services industry has resulted into insufficient focus on developing new products, even though Sonocom has relatively successful track record of launching new products.
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 Sonocom supply chain. Even after few cautionary changes, Sonocom is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sonocom vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Sonocom needs to have more collaboration between its sales team and marketing team. Sales professionals in the Printing Services industry have deep experience in developing customer relationships. Marketing department at Sonocom can leverage the sales team experience to cultivate customer relationships as Sonocom is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Sonocom, in the dynamic environment of Printing Services industry it has struggled to respond to the nimble upstart competition. Sonocom has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Sonocom is one of the leading players in the Printing Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing Services industry in last five years.
Sonocom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sonocom are -
Creating value in data economy
– The success of analytics program of Sonocom has opened avenues for new revenue streams for the organization in Printing Services industry. This can help Sonocom to build a more holistic ecosystem for Sonocom products in the Printing Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Printing Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sonocom in the Printing Services industry. Now Sonocom can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sonocom is facing challenges because of the dominance of functional experts in the organization. Sonocom can utilize new technology in the field of Printing Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Sonocom 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sonocom can use these opportunities to build new business models that can help the communities that Sonocom operates in. Secondly it can use opportunities from government spending in Printing Services sector.
Leveraging digital technologies
– Sonocom 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.
Manufacturing automation
– Sonocom can use the latest technology developments to improve its manufacturing and designing process in Printing Services 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
– Sonocom can develop new processes and procedures in Printing Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sonocom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Sonocom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Sonocom to increase its market reach. Sonocom 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.
Building a culture of innovation
– managers at Sonocom 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 Printing Services industry.
Using analytics as competitive advantage
– Sonocom has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Printing Services sector. This continuous investment in analytics has enabled Sonocom to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sonocom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Sonocom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sonocom are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sonocom 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 Sonocom prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Printing Services industry are lowering. It can presents Sonocom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing Services sector.
Technology acceleration in Forth Industrial Revolution
– Sonocom has witnessed rapid integration of technology during Covid-19 in the Printing Services industry. As one of the leading players in the industry, Sonocom needs to keep up with the evolution of technology in the Printing Services 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.
High dependence on third party suppliers
– Sonocom 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sonocom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing Services sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sonocom in Printing Services industry. The Printing Services 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.
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. Sonocom 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.
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. Sonocom needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.
Environmental challenges
– Sonocom 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. Sonocom can take advantage of this fund but it will also bring new competitors in the Printing Services industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Sonocom 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 Printing Services industry and other sectors.
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 Sonocom business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Sonocom 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 Printing Services industry regulations.
Weighted SWOT Analysis of Sonocom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sonocom 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 Sonocom 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 Sonocom 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 Sonocom 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 Sonocom needs to make to build a sustainable competitive advantage.
