SWOT Analysis / TOWS Matrix for Sanko Sangyo (Japan)
Based on various researches at Oak Spring University , Sanko Sangyo is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, 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 Sanko Sangyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sanko Sangyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sanko 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 Sanko Sangyo can be done for the following purposes –
1. Strategic planning of Sanko Sangyo
2. Improving business portfolio management of Sanko Sangyo
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 Sanko Sangyo
Strengths of Sanko Sangyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sanko Sangyo are -
High brand equity
– Sanko Sangyo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sanko Sangyo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Sanko Sangyo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sanko Sangyo staying ahead in the Printing Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Sanko Sangyo 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.
Learning organization
- Sanko 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 Sanko Sangyo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sanko Sangyo emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Sanko Sangyo 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.
Operational resilience
– The operational resilience strategy of Sanko Sangyo comprises – understanding the underlying the factors in the Printing Services 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.
Successful track record of launching new products
– Sanko Sangyo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sanko Sangyo 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.
Organizational Resilience of Sanko Sangyo
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sanko Sangyo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Sanko Sangyo in the Services sector have low bargaining power. Sanko Sangyo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sanko Sangyo to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Printing Services industry
– Sanko Sangyo has clearly differentiated products in the market place. This has enabled Sanko Sangyo to fetch slight price premium compare to the competitors in the Printing Services industry. The sustainable margins have also helped Sanko Sangyo to invest into research and development (R&D) and innovation.
Strong track record of project management in the Printing Services industry
– Sanko 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.
Diverse revenue streams
– Sanko Sangyo is present in almost all the verticals within the Printing Services industry. This has provided Sanko Sangyo 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 Sanko Sangyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sanko Sangyo are -
Compensation and incentives
– The revenue per employee of Sanko Sangyo is just above the Printing Services 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sanko Sangyo is slow explore the new channels of communication. These new channels of communication can help Sanko Sangyo to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.
High dependence on Sanko Sangyo ‘s star products
– The top 2 products and services of Sanko Sangyo 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 Sanko Sangyo has relatively successful track record of launching new products.
Skills based hiring in Printing Services industry
– The stress on hiring functional specialists at Sanko Sangyo has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Low market penetration in new markets
– Outside its home market of Japan, Sanko Sangyo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Sanko 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.
Slow decision making process
– As mentioned earlier in the report, Sanko 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 Printing Services industry over the last five years. Sanko 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.
Employees’ less understanding of Sanko Sangyo strategy
– From the outside it seems that the employees of Sanko Sangyo 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.
Lack of clear differentiation of Sanko Sangyo products
– To increase the profitability and margins on the products, Sanko 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 Sanko Sangyo is dominated by functional specialists. It is not different from other players in the Printing Services industry, but Sanko Sangyo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sanko Sangyo to focus more on services in the Printing Services industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Sanko Sangyo, 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.
Sanko Sangyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sanko Sangyo are -
Leveraging digital technologies
– Sanko Sangyo 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.
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 Sanko Sangyo in the Printing Services industry. Now Sanko Sangyo 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, Sanko Sangyo can use these opportunities to build new business models that can help the communities that Sanko Sangyo operates in. Secondly it can use opportunities from government spending in Printing Services sector.
Using analytics as competitive advantage
– Sanko Sangyo 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 Sanko Sangyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sanko Sangyo 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 Sanko Sangyo 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sanko Sangyo to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. Sanko Sangyo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Sanko Sangyo can improve the customer journey of consumers in the Printing Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sanko 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sanko 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 Printing Services industry, and it will provide faster access to the consumers.
Loyalty marketing
– Sanko 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 Sanko Sangyo to increase its market reach. Sanko 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sanko Sangyo is facing challenges because of the dominance of functional experts in the organization. Sanko Sangyo 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.
Threats Sanko Sangyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sanko Sangyo are -
Consumer confidence and its impact on Sanko 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 Printing Services industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Sanko Sangyo has witnessed rapid integration of technology during Covid-19 in the Printing Services industry. As one of the leading players in the industry, Sanko Sangyo 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sanko Sangyo 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.
Increasing wage structure of Sanko Sangyo
– 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 Sanko Sangyo.
Shortening product life cycle
– it is one of the major threat that Sanko Sangyo is facing in Printing Services 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 Sanko Sangyo.
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 Sanko Sangyo in the Printing Services 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.
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. Sanko Sangyo needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.
Regulatory challenges
– Sanko 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 Printing Services industry regulations.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sanko 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 Sanko Sangyo prominent markets.
Easy access to finance
– Easy access to finance in Printing Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sanko Sangyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Sanko Sangyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sanko 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 Sanko 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 Sanko 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 Sanko 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 Sanko Sangyo needs to make to build a sustainable competitive advantage.