SWOT Analysis / TOWS Matrix for Shinnaigai Textile (Japan)
Based on various researches at Oak Spring University , Shinnaigai Textile is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, wage bills are increasing, cloud computing is disrupting traditional business models, geopolitical disruptions, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Shinnaigai Textile
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shinnaigai Textile can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shinnaigai Textile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shinnaigai Textile 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 Shinnaigai Textile can be done for the following purposes –
1. Strategic planning of Shinnaigai Textile
2. Improving business portfolio management of Shinnaigai Textile
3. Assessing feasibility of the new initiative in Japan
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shinnaigai Textile
Strengths of Shinnaigai Textile | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shinnaigai Textile are -
High switching costs
– The high switching costs that Shinnaigai Textile 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.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Shinnaigai Textile has clearly differentiated products in the market place. This has enabled Shinnaigai Textile to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Shinnaigai Textile to invest into research and development (R&D) and innovation.
Innovation driven organization
– Shinnaigai Textile is one of the most innovative firm in Textiles - Non Apparel sector.
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For Shinnaigai Textile digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shinnaigai Textile 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.
Strong track record of project management in the Textiles - Non Apparel industry
– Shinnaigai Textile is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Shinnaigai Textile has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shinnaigai Textile staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Shinnaigai Textile has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of Shinnaigai Textile have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Shinnaigai Textile 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 Shinnaigai Textile is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shinnaigai Textile emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Shinnaigai Textile
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shinnaigai Textile does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Shinnaigai Textile in the Consumer Cyclical sector have low bargaining power. Shinnaigai Textile has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shinnaigai Textile to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Shinnaigai Textile is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided Shinnaigai Textile 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.
High brand equity
– Shinnaigai Textile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shinnaigai Textile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Shinnaigai Textile | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shinnaigai Textile are -
Need for greater diversity
– Shinnaigai Textile 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.
High cash cycle compare to competitors
Shinnaigai Textile has a high cash cycle compare to other players in the Textiles - Non 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 strategic competitive environment developments
– As Shinnaigai Textile is one of the leading players in the Textiles - Non Apparel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Textiles - Non Apparel industry in last five years.
Products dominated business model
– Even though Shinnaigai Textile has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shinnaigai Textile should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Shinnaigai Textile 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shinnaigai Textile is slow explore the new channels of communication. These new channels of communication can help Shinnaigai Textile to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Shinnaigai Textile needs to have more collaboration between its sales team and marketing team. Sales professionals in the Textiles - Non Apparel industry have deep experience in developing customer relationships. Marketing department at Shinnaigai Textile can leverage the sales team experience to cultivate customer relationships as Shinnaigai Textile is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Shinnaigai Textile has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Textiles - Non Apparel industry over the last five years. Shinnaigai Textile 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.
Capital Spending Reduction
– Even during the low interest decade, Shinnaigai Textile 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 Textiles - Non Apparel industry using digital technology.
Lack of clear differentiation of Shinnaigai Textile products
– To increase the profitability and margins on the products, Shinnaigai Textile 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 Shinnaigai Textile supply chain. Even after few cautionary changes, Shinnaigai Textile is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shinnaigai Textile vulnerable to further global disruptions in South East Asia.
Shinnaigai Textile Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shinnaigai Textile are -
Loyalty marketing
– Shinnaigai Textile 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.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shinnaigai Textile in the Textiles - Non Apparel industry. Now Shinnaigai Textile can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Shinnaigai Textile 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shinnaigai Textile can use these opportunities to build new business models that can help the communities that Shinnaigai Textile operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Building a culture of innovation
– managers at Shinnaigai Textile can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Textiles - Non Apparel industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shinnaigai Textile is facing challenges because of the dominance of functional experts in the organization. Shinnaigai Textile can utilize new technology in the field of Textiles - Non Apparel 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 Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Shinnaigai Textile can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Shinnaigai Textile has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Shinnaigai Textile to build a more holistic ecosystem for Shinnaigai Textile products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Shinnaigai Textile to increase its market reach. Shinnaigai Textile 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.
Manufacturing automation
– Shinnaigai Textile can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non 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.
Buying journey improvements
– Shinnaigai Textile can improve the customer journey of consumers in the Textiles - Non 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.
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 Shinnaigai Textile 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shinnaigai Textile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Shinnaigai Textile External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shinnaigai Textile are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shinnaigai Textile 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 Shinnaigai Textile prominent markets.
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 Shinnaigai Textile.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shinnaigai Textile may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Shinnaigai Textile with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
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 Shinnaigai Textile in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Environmental challenges
– Shinnaigai Textile 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. Shinnaigai Textile can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel 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.
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.
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. Shinnaigai Textile 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.
Consumer confidence and its impact on Shinnaigai Textile 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 Textiles - Non Apparel industry and other sectors.
Increasing wage structure of Shinnaigai Textile
– 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 Shinnaigai Textile.
Technology acceleration in Forth Industrial Revolution
– Shinnaigai Textile has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Shinnaigai Textile needs to keep up with the evolution of technology in the Textiles - Non 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.
Shortening product life cycle
– it is one of the major threat that Shinnaigai Textile is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Shinnaigai Textile Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shinnaigai Textile 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 Shinnaigai Textile 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 Shinnaigai Textile 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 Shinnaigai Textile 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 Shinnaigai Textile needs to make to build a sustainable competitive advantage.
