SWOT Analysis / TOWS Matrix for Oriental Chain Mfg (Japan)
Based on various researches at Oak Spring University , Oriental Chain Mfg is operating in a macro-environment that has been destablized by – increasing energy prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, increasing commodity prices, etc
Introduction to SWOT Analysis of Oriental Chain Mfg
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Oriental Chain Mfg can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oriental Chain Mfg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oriental Chain Mfg 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 Oriental Chain Mfg can be done for the following purposes –
1. Strategic planning of Oriental Chain Mfg
2. Improving business portfolio management of Oriental Chain Mfg
3. Assessing feasibility of the new initiative in Japan
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oriental Chain Mfg
Strengths of Oriental Chain Mfg | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oriental Chain Mfg are -
Superior customer experience
– The customer experience strategy of Oriental Chain Mfg in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Oriental Chain Mfg has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Oriental Chain Mfg have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Oriental Chain Mfg in the Capital Goods sector have low bargaining power. Oriental Chain Mfg has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oriental Chain Mfg to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Oriental Chain Mfg is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Oriental Chain Mfg 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.
Innovation driven organization
– Oriental Chain Mfg is one of the most innovative firm in Misc. Capital Goods sector.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Oriental Chain Mfg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oriental Chain Mfg 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.
Operational resilience
– The operational resilience strategy of Oriental Chain Mfg comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Organizational Resilience of Oriental Chain Mfg
– The covid-19 pandemic has put organizational resilience at the centre of everthing Oriental Chain Mfg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Oriental Chain Mfg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oriental Chain Mfg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Oriental Chain Mfg 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 Oriental Chain Mfg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Oriental Chain Mfg emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Oriental Chain Mfg 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 recruit top talent
– Oriental Chain Mfg is one of the leading players in the Misc. Capital Goods 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.
Weaknesses of Oriental Chain Mfg | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Oriental Chain Mfg are -
Need for greater diversity
– Oriental Chain Mfg 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
Oriental Chain Mfg has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Oriental Chain Mfg has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Oriental Chain Mfg should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Oriental Chain Mfg is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Oriental Chain Mfg needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oriental Chain Mfg to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oriental Chain Mfg is slow explore the new channels of communication. These new channels of communication can help Oriental Chain Mfg to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Oriental Chain Mfg needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Ability to respond to the competition
– As the decision making is very deliberative at Oriental Chain Mfg, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Oriental Chain Mfg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Oriental Chain Mfg has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Oriental Chain Mfg lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Oriental Chain Mfg 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 Misc. Capital Goods industry using digital technology.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in Japan, Oriental Chain Mfg 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 Misc. Capital Goods industry.
Compensation and incentives
– The revenue per employee of Oriental Chain Mfg is just above the Misc. Capital Goods 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.
Oriental Chain Mfg Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Oriental Chain Mfg are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oriental Chain Mfg can use these opportunities to build new business models that can help the communities that Oriental Chain Mfg operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
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 Oriental Chain Mfg 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.
Leveraging digital technologies
– Oriental Chain Mfg 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.
Buying journey improvements
– Oriental Chain Mfg can improve the customer journey of consumers in the Misc. Capital Goods 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 Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oriental Chain Mfg 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. Oriental Chain Mfg 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.
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. Oriental Chain Mfg 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 Oriental Chain Mfg 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oriental Chain Mfg to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Oriental Chain Mfg to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Oriental Chain Mfg 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 Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Oriental Chain Mfg in the Misc. Capital Goods industry. Now Oriental Chain Mfg can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oriental Chain Mfg in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Oriental Chain Mfg to increase its market reach. Oriental Chain Mfg 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.
Creating value in data economy
– The success of analytics program of Oriental Chain Mfg has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Oriental Chain Mfg to build a more holistic ecosystem for Oriental Chain Mfg products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Oriental Chain Mfg External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Oriental Chain Mfg are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oriental Chain Mfg in Misc. Capital Goods industry. The Misc. Capital Goods 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Oriental Chain Mfg needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Oriental Chain Mfg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oriental Chain Mfg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Oriental Chain Mfg in the Misc. Capital Goods sector and impact the bottomline 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. Oriental Chain Mfg 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.
Shortening product life cycle
– it is one of the major threat that Oriental Chain Mfg is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oriental Chain Mfg 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 Oriental Chain Mfg prominent markets.
Environmental challenges
– Oriental Chain Mfg 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. Oriental Chain Mfg can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Increasing wage structure of Oriental Chain Mfg
– 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 Oriental Chain Mfg.
Regulatory challenges
– Oriental Chain Mfg 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 Misc. Capital Goods industry regulations.
High dependence on third party suppliers
– Oriental Chain Mfg 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.
Weighted SWOT Analysis of Oriental Chain Mfg Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Oriental Chain Mfg 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 Oriental Chain Mfg 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 Oriental Chain Mfg 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 Oriental Chain Mfg 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 Oriental Chain Mfg needs to make to build a sustainable competitive advantage.