Softbank SWOT Analysis

Strengths of Softbank

Softbank is one of the principal companies in its industry. Because of this, the company has many strengths to succeed in its market share. The strengths help in protecting the current market share of the company as well as in penetrating new markets. Strengths are internal strategic factors that include:

  • Softbank product innovation is unmatched. It holds a track record in the development of new products.
  • The company is very effective in its products’ go-to-market-strategies.
  • Quality consistent has been achieved in the company’s products due to automation of its activities as well as allowing the company to either scale up or down depending market demand conditions.
  • Softbank has a positive track record in assimilating complimentary companies through acquisition and mergers. Softbank has assimilated numerous technology firms within the last few years in order to streamline its processes as well as to create a steadfast supply chain (Kodama, 2018).
  • The company’s returns on capital expenditure are good. The company is moderately effective in implementing current ventures as well as producing decent earnings on capital spending through its conception of new revenue flows.
  • Softbank has a robust community of dealers. The company has formed a philosophy between dealers and distributors where the dealers promote its products and capitalise on training the sales personnel to give explanations to customers on how to excerpt maximum benefits from the products.
  • Softbank’s customer satisfaction level is high. This has been achieved through its enthusiasm to customer relationship for the current customers as well as virtuous brand equity for its potential customers.
Have any questions about the topic? Our Experts can answer any question you have. They are avaliable to you 24/7.
Ask now

The Weaknesses of SoftBank

Weaknesses are part of internal strategic factors that the company need to improve on. Strategic planning depends on choices made, and weaknesses are some of the areas that the company need to improve on in order to build on strategic positioning and competitive advantage. The areas that Softbank can improve on include:

  • SoftBank has a high attrition degree in the workforce. When the company is compared to the other rivals in the industry, its attrition degree is high, and it has to spend more than their competitors on employee’s development and training (Takano, 2016).
  • SoftBank’s percentages of net contribution, as well as the profitability ratios, are below the overall average of the industry.
  • The company also lacks behind on product demand forecasting as compared to their rivals. This has contributed to a lot of SoftBank’s missed opportunities. This explains why the company has high inventory both in channel and in-house daily in comparison to its rivals.
  • SoftBank’s investment in development and research is lower than that of the rapidly growing companies in the industry. Despite its spending exceeding the average expenditure of the industry on development and research, the company has failed to compete well with the leading companies in the industry based on innovation. SoftBank appears to rely on the tested market features in order to introduce their products to the market.
  • The company’s financial planning is not done efficiently and correctly. From the current company ’s, liquid and asset ratios, it can be concluded that the company is not efficiently utilizing its cash.
  • SoftBank needs more new technological investments. The company’s expansion scale, as well as its set of geographies it plans to expand to, requires further investment in technology in order to assimilate processes in all the platforms. The current technological investments are not in agreement with the company’s vision.
  • The company’s product range has some gaps, and this limited choice may allow competitors to capitalize on to dominate the market.

SoftBank Opportunities

Opportunities are external strategic factors that the company can capitalize on. These include:

  • The costs of transportation are decreasing due to lower prices in shipping which will allow the company to lower the costs of their products. This provides the company with an opportunity to pass on the gains to its customers or increase the profitability of their products.
  • Differentiated pricing strategy can now be possible based on the opportunities that new technology provides. The company can now utilize excellent customer service to maintain loyalty among its customers as well as attracting new customers using value-oriented proposals.
  • The current inflation rate is low bringing market stability and the company can provide its customers with credit at a lower rate of interest.
  • Further opportunities can be realized that by investing the free, stable cash flow in the adjacent product sectors. This will allow SoftBank to access new opportunities in other product classes (Lundin & Eriksson, 2016).
  • The new uptick in the economy increases the customer expenditure following the slow rates of growth and recession within the industry. This is a chance for the company to increase its share of the market by attracting new customers.
  • New markets are opening as a result of government agreements. The government has adopted free trade agreements along with the new technology standard that will give an opportunity for the company to enter a fresh developing market.
  • The core competencies of the company can lead to success in other related product categories.
  • The green drive by the government opens a chance for both the federal and state governments to obtain the products of the company.

Threats facing SoftBank

  • The customers’ buying behaviour is shifting to the online platform, threatening the physical infrastructure driven model of the supply chain used by the company (Arora, 2017).
  • There is a shortage of skilled labour force in some specific international market which threatens the stable growth of proceeds for the company from those markets.
  • The company lacks a consistent supply of creative products. The company mostly introduce new products in response to developments of the other companies in the industry. Another aspect is that the company’s supply of new products is asymmetrical hence leading to truncated, high swings in the number of sales within a period.
  • Some product categories may be under threat as a result of the new environmental regulations stipulated by the Paris agreement of 2016.
  • The profitability of the company is under threat from the rising raw material costs.
  • The strength of local distributors is growing, and this threatens some of the company markets since the competition yields higher limitations to local distributors.
  • Because of the stable returns in the industry, the number of companies in the industry has increased leading to intense competition. The intense competition lays heavy pressure on the overall sales as well as profitability.
  • In low-income markets as well as the new markets, low-quality products and counterfeits threaten the firm’s products.

If appointed the CEO of the company, my first cause of actions will be to capitalize on the opportunities outlined in this analysis. The underutilized cash flaws will be put into use to expand the company reach into the new markets that are opening up. I will personally lead a team to research new product lines that assimilate into the company’s core competencies. This will act as a contingency strategy against the products that are likely to be faced off under new environmental regulations. The rising cost of raw materials threatens the profitability of the company, but if the company capitalizes on the outlined opportunities, there is a possibility that this looming threat can be effectively mitigated.

 

References

Arora, J. B. (2017). Reality of E-Commerce and Social Inclusion in Developing Asian Countries. In Innovations in E-Systems for Business and Commerce (pp. 227-244). Apple Academic Press.

Kodama, M. (2018). Successful and unsuccessful strategic innovation in the mobile telephone industry: the cases of NTT DOCOMO and SoftBank: Driving Congruence in Capabilities. In Sustainable Growth Through Strategic Innovation. Edward Elgar Publishing.

Lundin, M., & Eriksson, S. (2016). Artificial intelligence in Japan (R&D, market and industry analysis). EU-Japan Centre for Industrial Cooperation.

Takano, N. (2016). A conjoint analysis of demand for the Japanese mobile phone market. The Review of Socionetwork Strategies10(1), 1-15.