Sumitomo Heavy ADR (SOHVY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sumitomo Heavy ADR (United States)
Based on various researches at Oak Spring University , Sumitomo Heavy ADR is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of Sumitomo Heavy ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sumitomo Heavy ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sumitomo Heavy ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sumitomo Heavy ADR 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 Sumitomo Heavy ADR can be done for the following purposes –
1. Strategic planning of Sumitomo Heavy ADR
2. Improving business portfolio management of Sumitomo Heavy ADR
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sumitomo Heavy ADR
Strengths of Sumitomo Heavy ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sumitomo Heavy ADR are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For Sumitomo Heavy ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sumitomo Heavy ADR 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 industry
– Sumitomo Heavy ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in industry
– Sumitomo Heavy ADR has clearly differentiated products in the market place. This has enabled Sumitomo Heavy ADR to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Sumitomo Heavy ADR to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Sumitomo Heavy ADR is present in almost all the verticals within the industry. This has provided Sumitomo Heavy ADR 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)
– Sumitomo Heavy ADR has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sumitomo Heavy ADR staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Sumitomo Heavy ADR has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sumitomo Heavy ADR to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Sumitomo Heavy ADR 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 Sumitomo Heavy ADR is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sumitomo Heavy ADR emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Sumitomo Heavy ADR is one of the most innovative firm in sector.
Cross disciplinary teams
– Horizontal connected teams at the Sumitomo Heavy ADR are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Sumitomo Heavy ADR in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Sumitomo Heavy ADR has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Sumitomo Heavy ADR have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in
– Sumitomo Heavy ADR is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Sumitomo Heavy ADR in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Sumitomo Heavy ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sumitomo Heavy ADR are -
Products dominated business model
– Even though Sumitomo Heavy ADR has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sumitomo Heavy ADR should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of United States, Sumitomo Heavy ADR needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Sumitomo Heavy ADR, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Sumitomo Heavy ADR 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, Sumitomo Heavy ADR has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sumitomo Heavy ADR lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Sumitomo Heavy ADR is dominated by functional specialists. It is not different from other players in the industry, but Sumitomo Heavy ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sumitomo Heavy ADR to focus more on services in the industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Sumitomo Heavy ADR 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.
No frontier risks strategy
– From the 10K / annual statement of Sumitomo Heavy ADR, it seems that company is thinking out the frontier risks that can impact industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Sumitomo Heavy ADR products
– To increase the profitability and margins on the products, Sumitomo Heavy ADR needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Sumitomo Heavy ADR has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Sumitomo Heavy ADR ‘s star products
– The top 2 products and services of Sumitomo Heavy ADR still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Sumitomo Heavy ADR has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the industry, Sumitomo Heavy ADR 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.
Sumitomo Heavy ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sumitomo Heavy ADR are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Sumitomo Heavy ADR can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sumitomo Heavy ADR 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. Sumitomo Heavy ADR 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.
Better consumer reach
– The expansion of the 5G network will help Sumitomo Heavy ADR to increase its market reach. Sumitomo Heavy ADR 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.
Learning at scale
– Online learning technologies has now opened space for Sumitomo Heavy ADR 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.
Creating value in data economy
– The success of analytics program of Sumitomo Heavy ADR has opened avenues for new revenue streams for the organization in industry. This can help Sumitomo Heavy ADR to build a more holistic ecosystem for Sumitomo Heavy ADR products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Sumitomo Heavy ADR can use the latest technology developments to improve its manufacturing and designing process in 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.
Building a culture of innovation
– managers at Sumitomo Heavy ADR 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 industry.
Buying journey improvements
– Sumitomo Heavy ADR can improve the customer journey of consumers in the 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 Sumitomo Heavy ADR 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sumitomo Heavy ADR is facing challenges because of the dominance of functional experts in the organization. Sumitomo Heavy ADR can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Sumitomo Heavy ADR 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.
Developing new processes and practices
– Sumitomo Heavy ADR can develop new processes and procedures in 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.
Loyalty marketing
– Sumitomo Heavy ADR 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.
Threats Sumitomo Heavy ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sumitomo Heavy ADR are -
Increasing wage structure of Sumitomo Heavy ADR
– 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 Sumitomo Heavy ADR.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sumitomo Heavy ADR may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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. Sumitomo Heavy ADR 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, Sumitomo Heavy ADR 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 Sumitomo Heavy ADR prominent markets.
Shortening product life cycle
– it is one of the major threat that Sumitomo Heavy ADR is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Sumitomo Heavy ADR has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Sumitomo Heavy ADR needs to keep up with the evolution of technology in the 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.
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 Sumitomo Heavy ADR in the sector and impact the bottomline of the organization.
Consumer confidence and its impact on Sumitomo Heavy ADR 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 industry and other sectors.
Environmental challenges
– Sumitomo Heavy ADR 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. Sumitomo Heavy ADR can take advantage of this fund but it will also bring new competitors in the industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Sumitomo Heavy ADR business can come under increasing regulations regarding data privacy, data security, etc.
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. Sumitomo Heavy ADR needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Sumitomo Heavy ADR 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 industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sumitomo Heavy ADR in industry. The 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.
Weighted SWOT Analysis of Sumitomo Heavy ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sumitomo Heavy ADR 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 Sumitomo Heavy ADR 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 Sumitomo Heavy ADR 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 Sumitomo Heavy ADR 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 Sumitomo Heavy ADR needs to make to build a sustainable competitive advantage.
