SWOT Analysis / TOWS Matrix for Ginza Yamagataya (Japan)
Based on various researches at Oak Spring University , Ginza Yamagataya is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, technology disruption, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ginza Yamagataya can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ginza Yamagataya, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ginza Yamagataya 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 Ginza Yamagataya can be done for the following purposes –
1. Strategic planning of Ginza Yamagataya
2. Improving business portfolio management of Ginza Yamagataya
3. Assessing feasibility of the new initiative in Japan
4. Making a Retail (Apparel) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ginza Yamagataya
Strengths of Ginza Yamagataya | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ginza Yamagataya are -
High brand equity
– Ginza Yamagataya has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ginza Yamagataya to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Ginza Yamagataya 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 Retail (Apparel) industry
– Ginza Yamagataya has clearly differentiated products in the market place. This has enabled Ginza Yamagataya to fetch slight price premium compare to the competitors in the Retail (Apparel) industry. The sustainable margins have also helped Ginza Yamagataya to invest into research and development (R&D) and innovation.
Digital Transformation in Retail (Apparel) industry
- digital transformation varies from industry to industry. For Ginza Yamagataya digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ginza Yamagataya 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.
Highly skilled collaborators
– Ginza Yamagataya has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Apparel) industry. Secondly the value chain collaborators of Ginza Yamagataya have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Ginza Yamagataya
– The covid-19 pandemic has put organizational resilience at the centre of everthing Ginza Yamagataya does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Ginza Yamagataya 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 Ginza Yamagataya is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ginza Yamagataya emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ginza Yamagataya in the Services sector have low bargaining power. Ginza Yamagataya has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ginza Yamagataya to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Retail (Apparel)
– Ginza Yamagataya is one of the leading players in the Retail (Apparel) industry in Japan. Over the years it has not only transformed the business landscape in the Retail (Apparel) industry in Japan but also across the existing markets. The ability to lead change has enabled Ginza Yamagataya in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Ginza Yamagataya is one of the leading players in the Retail (Apparel) 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.
High switching costs
– The high switching costs that Ginza Yamagataya 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.
Diverse revenue streams
– Ginza Yamagataya is present in almost all the verticals within the Retail (Apparel) industry. This has provided Ginza Yamagataya 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 Ginza Yamagataya | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ginza Yamagataya are -
Skills based hiring in Retail (Apparel) industry
– The stress on hiring functional specialists at Ginza Yamagataya 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.
Products dominated business model
– Even though Ginza Yamagataya has some of the most successful models in the Retail (Apparel) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ginza Yamagataya should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Japan, Ginza Yamagataya needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Ginza Yamagataya products
– To increase the profitability and margins on the products, Ginza Yamagataya needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Ginza Yamagataya has a high cash cycle compare to other players in the Retail (Apparel) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ginza Yamagataya is slow explore the new channels of communication. These new channels of communication can help Ginza Yamagataya to provide better information regarding Retail (Apparel) products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Ginza Yamagataya 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 Retail (Apparel) industry using digital technology.
Employees’ less understanding of Ginza Yamagataya strategy
– From the outside it seems that the employees of Ginza Yamagataya 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.
Aligning sales with marketing
– From the outside it seems that Ginza Yamagataya needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Apparel) industry have deep experience in developing customer relationships. Marketing department at Ginza Yamagataya can leverage the sales team experience to cultivate customer relationships as Ginza Yamagataya is planning to shift buying processes online.
High dependence on Ginza Yamagataya ‘s star products
– The top 2 products and services of Ginza Yamagataya still accounts for major business revenue. This dependence on star products in Retail (Apparel) industry has resulted into insufficient focus on developing new products, even though Ginza Yamagataya has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Ginza Yamagataya has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Apparel) industry over the last five years. Ginza Yamagataya 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.
Ginza Yamagataya Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ginza Yamagataya are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ginza Yamagataya 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 Ginza Yamagataya to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Ginza Yamagataya 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ginza Yamagataya in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Apparel) industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ginza Yamagataya 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.
Learning at scale
– Online learning technologies has now opened space for Ginza Yamagataya 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.
Buying journey improvements
– Ginza Yamagataya can improve the customer journey of consumers in the Retail (Apparel) 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.
Better consumer reach
– The expansion of the 5G network will help Ginza Yamagataya to increase its market reach. Ginza Yamagataya 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.
Using analytics as competitive advantage
– Ginza Yamagataya has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Apparel) sector. This continuous investment in analytics has enabled Ginza Yamagataya to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ginza Yamagataya 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. Ginza Yamagataya can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Ginza Yamagataya can use the latest technology developments to improve its manufacturing and designing process in Retail (Apparel) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Apparel) industry, but it has also influenced the consumer preferences. Ginza Yamagataya can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ginza Yamagataya 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 Ginza Yamagataya to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Apparel) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ginza Yamagataya 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. Ginza Yamagataya 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.
Threats Ginza Yamagataya External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ginza Yamagataya are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ginza Yamagataya 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 Ginza Yamagataya prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ginza Yamagataya may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Apparel) sector.
Stagnating economy with rate increase
– Ginza Yamagataya can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Retail (Apparel) industry.
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. Ginza Yamagataya 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.
Technology acceleration in Forth Industrial Revolution
– Ginza Yamagataya has witnessed rapid integration of technology during Covid-19 in the Retail (Apparel) industry. As one of the leading players in the industry, Ginza Yamagataya needs to keep up with the evolution of technology in the Retail (Apparel) 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.
Consumer confidence and its impact on Ginza Yamagataya 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 Retail (Apparel) 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 Ginza Yamagataya in the Retail (Apparel) sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Ginza Yamagataya 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.
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 Ginza Yamagataya business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ginza Yamagataya in Retail (Apparel) industry. The Retail (Apparel) 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 Ginza Yamagataya
– 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 Ginza Yamagataya.
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.
Easy access to finance
– Easy access to finance in Retail (Apparel) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ginza Yamagataya 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 Ginza Yamagataya Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ginza Yamagataya 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 Ginza Yamagataya 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 Ginza Yamagataya 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 Ginza Yamagataya 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 Ginza Yamagataya needs to make to build a sustainable competitive advantage.