SWOT Analysis / TOWS Matrix for Forval Realstraight (Japan)
Based on various researches at Oak Spring University , Forval Realstraight is operating in a macro-environment that has been destablized by – there is backlash against globalization, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing energy prices, there is increasing trade war between United States & China,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Forval Realstraight
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Forval Realstraight can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Forval Realstraight, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Forval Realstraight 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 Forval Realstraight can be done for the following purposes –
1. Strategic planning of Forval Realstraight
2. Improving business portfolio management of Forval Realstraight
3. Assessing feasibility of the new initiative in Japan
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Forval Realstraight
Strengths of Forval Realstraight | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Forval Realstraight are -
Organizational Resilience of Forval Realstraight
– The covid-19 pandemic has put organizational resilience at the centre of everthing Forval Realstraight does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Forval Realstraight has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Forval Realstraight staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Forval Realstraight is one of the most innovative firm in Business Services sector.
Operational resilience
– The operational resilience strategy of Forval Realstraight comprises – understanding the underlying the factors in the Business 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.
Learning organization
- Forval Realstraight 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 Forval Realstraight is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Forval Realstraight emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Forval Realstraight is present in almost all the verticals within the Business Services industry. This has provided Forval Realstraight 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 Business Services industry
– Forval Realstraight 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 Business Services industry
– Forval Realstraight has clearly differentiated products in the market place. This has enabled Forval Realstraight to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped Forval Realstraight to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Forval Realstraight has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Forval Realstraight 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.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Forval Realstraight digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Forval Realstraight 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.
High brand equity
– Forval Realstraight has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Forval Realstraight to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Forval Realstraight in the Services sector have low bargaining power. Forval Realstraight has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Forval Realstraight to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Forval Realstraight | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Forval Realstraight are -
Low market penetration in new markets
– Outside its home market of Japan, Forval Realstraight needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Forval Realstraight is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
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 Forval Realstraight supply chain. Even after few cautionary changes, Forval Realstraight is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Forval Realstraight vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Forval Realstraight has high operating costs in the Business Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Forval Realstraight lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Forval Realstraight is dominated by functional specialists. It is not different from other players in the Business Services industry, but Forval Realstraight needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Forval Realstraight to focus more on services in the Business Services industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Forval Realstraight 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 Business Services industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Forval Realstraight needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Forval Realstraight can leverage the sales team experience to cultivate customer relationships as Forval Realstraight is planning to shift buying processes online.
Employees’ less understanding of Forval Realstraight strategy
– From the outside it seems that the employees of Forval Realstraight 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.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in Japan, Forval Realstraight 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 Business Services industry.
Slow decision making process
– As mentioned earlier in the report, Forval Realstraight has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Forval Realstraight 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.
Products dominated business model
– Even though Forval Realstraight has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Forval Realstraight should strive to include more intangible value offerings along with its core products and services.
Forval Realstraight Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Forval Realstraight are -
Better consumer reach
– The expansion of the 5G network will help Forval Realstraight to increase its market reach. Forval Realstraight 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Forval Realstraight 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 Forval Realstraight to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Forval Realstraight 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.
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 Forval Realstraight 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.
Creating value in data economy
– The success of analytics program of Forval Realstraight has opened avenues for new revenue streams for the organization in Business Services industry. This can help Forval Realstraight to build a more holistic ecosystem for Forval Realstraight products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Forval Realstraight can improve the customer journey of consumers in the Business 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Forval Realstraight 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. Forval Realstraight 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Forval Realstraight 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.
Manufacturing automation
– Forval Realstraight can use the latest technology developments to improve its manufacturing and designing process in Business 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Forval Realstraight can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Forval Realstraight in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Forval Realstraight in the Business Services industry. Now Forval Realstraight can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Forval Realstraight can develop new processes and procedures in Business 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.
Threats Forval Realstraight External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Forval Realstraight are -
High dependence on third party suppliers
– Forval Realstraight 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.
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.
Regulatory challenges
– Forval Realstraight 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 Business Services 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.
Shortening product life cycle
– it is one of the major threat that Forval Realstraight is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Forval Realstraight has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Forval Realstraight needs to keep up with the evolution of technology in the Business 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Forval Realstraight 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 Forval Realstraight prominent markets.
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 Forval Realstraight in the Business Services sector and impact the bottomline of the organization.
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 Forval Realstraight.
Increasing wage structure of Forval Realstraight
– 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 Forval Realstraight.
Stagnating economy with rate increase
– Forval Realstraight 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 Business Services industry.
Environmental challenges
– Forval Realstraight 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. Forval Realstraight can take advantage of this fund but it will also bring new competitors in the Business Services industry.
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 Forval Realstraight business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Forval Realstraight Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Forval Realstraight 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 Forval Realstraight 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 Forval Realstraight 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 Forval Realstraight 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 Forval Realstraight needs to make to build a sustainable competitive advantage.
