Katsuragawa Electric (6416) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Katsuragawa Electric (Japan)

Based on various researches at Oak Spring University , Katsuragawa Electric is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, wage bills are increasing, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Katsuragawa Electric

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Katsuragawa Electric can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Katsuragawa Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Katsuragawa Electric 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 Katsuragawa Electric can be done for the following purposes –
1. Strategic planning of Katsuragawa Electric
2. Improving business portfolio management of Katsuragawa Electric
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 Katsuragawa Electric

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Strengths of Katsuragawa Electric | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Katsuragawa Electric are -

Digital Transformation in Printing Services industry

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

Learning organization

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

Diverse revenue streams

– Katsuragawa Electric is present in almost all the verticals within the Printing Services industry. This has provided Katsuragawa Electric 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.

Effective Research and Development (R&D)

– Katsuragawa Electric has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Katsuragawa Electric 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.

High switching costs

– The high switching costs that Katsuragawa Electric 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.

Ability to lead change in Printing Services

– Katsuragawa Electric 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 Katsuragawa Electric 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

– Katsuragawa Electric 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.

Sustainable margins compare to other players in Printing Services industry

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

Low bargaining power of suppliers

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

Successful track record of launching new products

– Katsuragawa Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Katsuragawa Electric 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.

Analytics focus

– Katsuragawa Electric is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Printing Services industry. The technology infrastructure of Japan is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Highly skilled collaborators

– Katsuragawa Electric 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 Katsuragawa Electric have helped the firm to develop new products and bring them quickly to the marketplace.

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Weaknesses of Katsuragawa Electric | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Katsuragawa Electric are -

Need for greater diversity

– Katsuragawa Electric has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow to strategic competitive environment developments

– As Katsuragawa Electric 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.

High dependence on Katsuragawa Electric ‘s star products

– The top 2 products and services of Katsuragawa Electric 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 Katsuragawa Electric has relatively successful track record of launching new products.

High cash cycle compare to competitors

Katsuragawa Electric has a high cash cycle compare to other players in the Printing Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Employees’ less understanding of Katsuragawa Electric strategy

– From the outside it seems that the employees of Katsuragawa Electric 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 operating costs

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

Compensation and incentives

– The revenue per employee of Katsuragawa Electric 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 decision making process

– As mentioned earlier in the report, Katsuragawa Electric 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. Katsuragawa Electric 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.

High bargaining power of channel partners in Printing Services industry

– because of the regulatory requirements in Japan, Katsuragawa Electric 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 Services industry.

Lack of clear differentiation of Katsuragawa Electric products

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

Products dominated business model

– Even though Katsuragawa Electric 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. Katsuragawa Electric should strive to include more intangible value offerings along with its core products and services.

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Katsuragawa Electric Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Katsuragawa Electric are -

Leveraging digital technologies

– Katsuragawa Electric 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 Katsuragawa Electric 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.

Manufacturing automation

– Katsuragawa Electric 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.

Reforming the budgeting process

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

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 Katsuragawa Electric 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.

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 Katsuragawa Electric in the Printing Services industry. Now Katsuragawa Electric 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, Katsuragawa Electric is facing challenges because of the dominance of functional experts in the organization. Katsuragawa Electric 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.

Harnessing reconfiguration of the global supply chains

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

Better consumer reach

– The expansion of the 5G network will help Katsuragawa Electric to increase its market reach. Katsuragawa Electric 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Katsuragawa Electric 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.

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. Katsuragawa Electric can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Learning at scale

– Online learning technologies has now opened space for Katsuragawa Electric 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.

Finding new ways to collaborate

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

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Threats Katsuragawa Electric External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Katsuragawa Electric are -

Technology acceleration in Forth Industrial Revolution

– Katsuragawa Electric has witnessed rapid integration of technology during Covid-19 in the Printing Services industry. As one of the leading players in the industry, Katsuragawa Electric 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.

Regulatory challenges

– Katsuragawa Electric 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.

Environmental challenges

– Katsuragawa Electric 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. Katsuragawa Electric can take advantage of this fund but it will also bring new competitors in the Printing Services industry.

High dependence on third party suppliers

– Katsuragawa Electric 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.

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 Katsuragawa Electric.

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. Katsuragawa Electric 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Katsuragawa Electric 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 Katsuragawa Electric prominent markets.

Stagnating economy with rate increase

– Katsuragawa Electric 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 Services industry.

Barriers of entry lowering

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

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 Katsuragawa Electric business can come under increasing regulations regarding data privacy, data security, etc.

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.

Increasing wage structure of Katsuragawa Electric

– 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 Katsuragawa Electric.

Consumer confidence and its impact on Katsuragawa Electric 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.

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Weighted SWOT Analysis of Katsuragawa Electric Template, Example

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

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