Townnews-Sha (2481) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Townnews-Sha (Japan)

Based on various researches at Oak Spring University , Townnews-Sha is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , geopolitical disruptions, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of Townnews-Sha

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Townnews-Sha can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Townnews-Sha, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Townnews-Sha 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Townnews-Sha can be done for the following purposes –
1. Strategic planning of Townnews-Sha
2. Improving business portfolio management of Townnews-Sha
3. Assessing feasibility of the new initiative in Japan
4. Making a Printing & Publishing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Townnews-Sha

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Strengths of Townnews-Sha | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Townnews-Sha are -

Innovation driven organization

– Townnews-Sha is one of the most innovative firm in Printing & Publishing sector.

Sustainable margins compare to other players in Printing & Publishing industry

– Townnews-Sha has clearly differentiated products in the market place. This has enabled Townnews-Sha to fetch slight price premium compare to the competitors in the Printing & Publishing industry. The sustainable margins have also helped Townnews-Sha to invest into research and development (R&D) and innovation.

Training and development

– Townnews-Sha has one of the best training and development program in Services 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.

Highly skilled collaborators

– Townnews-Sha has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing & Publishing industry. Secondly the value chain collaborators of Townnews-Sha have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Townnews-Sha has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Townnews-Sha staying ahead in the Printing & Publishing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy of Townnews-Sha comprises – understanding the underlying the factors in the Printing & Publishing 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.

Strong track record of project management in the Printing & Publishing industry

– Townnews-Sha is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- Townnews-Sha 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 Townnews-Sha is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Townnews-Sha emphasize – knowledge, initiative, and innovation.

Ability to lead change in Printing & Publishing

– Townnews-Sha is one of the leading players in the Printing & Publishing industry in Japan. Over the years it has not only transformed the business landscape in the Printing & Publishing industry in Japan but also across the existing markets. The ability to lead change has enabled Townnews-Sha in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Townnews-Sha 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 & Publishing industry

- digital transformation varies from industry to industry. For Townnews-Sha digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Townnews-Sha 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.

Low bargaining power of suppliers

– Suppliers of Townnews-Sha in the Services sector have low bargaining power. Townnews-Sha has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Townnews-Sha to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses of Townnews-Sha | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Townnews-Sha are -

Low market penetration in new markets

– Outside its home market of Japan, Townnews-Sha needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High operating costs

– Compare to the competitors, Townnews-Sha has high operating costs in the Printing & Publishing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Townnews-Sha lucrative customers.

Lack of clear differentiation of Townnews-Sha products

– To increase the profitability and margins on the products, Townnews-Sha needs to provide more differentiated products than what it is currently offering in the marketplace.

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 Townnews-Sha supply chain. Even after few cautionary changes, Townnews-Sha is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Townnews-Sha vulnerable to further global disruptions in South East Asia.

High dependence on Townnews-Sha ‘s star products

– The top 2 products and services of Townnews-Sha still accounts for major business revenue. This dependence on star products in Printing & Publishing industry has resulted into insufficient focus on developing new products, even though Townnews-Sha has relatively successful track record of launching new products.

High bargaining power of channel partners in Printing & Publishing industry

– because of the regulatory requirements in Japan, Townnews-Sha 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 Printing & Publishing industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Townnews-Sha is slow explore the new channels of communication. These new channels of communication can help Townnews-Sha to provide better information regarding Printing & Publishing products and services. It can also build an online community to further reach out to potential customers.

Slow to strategic competitive environment developments

– As Townnews-Sha is one of the leading players in the Printing & Publishing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing & Publishing industry in last five years.

Interest costs

– Compare to the competition, Townnews-Sha 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.

High cash cycle compare to competitors

Townnews-Sha has a high cash cycle compare to other players in the Printing & Publishing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Capital Spending Reduction

– Even during the low interest decade, Townnews-Sha 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 Printing & Publishing industry using digital technology.

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Townnews-Sha Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Townnews-Sha are -

Manufacturing automation

– Townnews-Sha can use the latest technology developments to improve its manufacturing and designing process in Printing & Publishing 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Townnews-Sha can use these opportunities to build new business models that can help the communities that Townnews-Sha operates in. Secondly it can use opportunities from government spending in Printing & Publishing sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Townnews-Sha 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 Townnews-Sha to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Townnews-Sha is facing challenges because of the dominance of functional experts in the organization. Townnews-Sha can utilize new technology in the field of Printing & Publishing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Printing & Publishing industry, but it has also influenced the consumer preferences. Townnews-Sha can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Townnews-Sha can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Townnews-Sha 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.

Using analytics as competitive advantage

– Townnews-Sha has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Printing & Publishing sector. This continuous investment in analytics has enabled Townnews-Sha to build a competitive advantage using analytics. The analytics driven competitive advantage can help Townnews-Sha to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Low interest rates

– Even though inflation is raising its head in most developed economies, Townnews-Sha 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.

Loyalty marketing

– Townnews-Sha 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 Townnews-Sha 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.

Developing new processes and practices

– Townnews-Sha can develop new processes and procedures in Printing & Publishing 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Printing & Publishing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Townnews-Sha 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. Townnews-Sha 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.

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Threats Townnews-Sha External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Townnews-Sha are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Townnews-Sha in Printing & Publishing industry. The Printing & Publishing 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Townnews-Sha 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 & Publishing sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Printing & Publishing industry are lowering. It can presents Townnews-Sha with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing & Publishing sector.

Increasing wage structure of Townnews-Sha

– 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 Townnews-Sha.

Stagnating economy with rate increase

– Townnews-Sha 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 Printing & Publishing industry.

Shortening product life cycle

– it is one of the major threat that Townnews-Sha is facing in Printing & Publishing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Consumer confidence and its impact on Townnews-Sha 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 & Publishing industry and other sectors.

Easy access to finance

– Easy access to finance in Printing & Publishing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Townnews-Sha can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Townnews-Sha 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. Townnews-Sha can take advantage of this fund but it will also bring new competitors in the Printing & Publishing 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.

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. Townnews-Sha 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.

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.

Regulatory challenges

– Townnews-Sha 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 & Publishing industry regulations.

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Weighted SWOT Analysis of Townnews-Sha Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Townnews-Sha 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 Townnews-Sha 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 Townnews-Sha 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 Townnews-Sha 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 Townnews-Sha needs to make to build a sustainable competitive advantage.

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