SWOT Analysis Of Yamada Denki And Market Size Of The Electronics Industry In Japan

This assessment is designed to apply the knowledge and skills developed by the students to evaluating the external and internal environment in which new product is to be realised and defining strategies appropriate to its realisation. The business concept relates to a new product relevant to the company which forms the overarching focus of the learning activities of this section of the subject. In this assignment, the student is expected to analyse the external and internal environments (SWOT), identify a relevant strategy (S-0, W-O etc.), identify and describe a target market, and develop a suitable new product for the company to introduce for this target market.

In this assignment, each of you must choose a company from the list of companies provided (see below for a list of companies). You will choose a country (not Australia) that your company operates in and provide relevant background information and analysis on both the company and country, and design a new product for the company to launch in that country.

You will need to provide a market description of the relevant market conditions that your company operates in. This might include variables such as the prevailing economic conditions, demand and supply factors, and a description of the industry etc. for that country.  You will need to provide a referenced SWOT analysis for the company in that market, identifying the internal strengths and weaknesses and external opportunities and threats of the company for the chosen market.  The goal of a SWOT analysis is to identify the critical factors that may affect your proposed business concept (or new product) and then build on your strengths to reduce your weaknesses, exploit opportunities and avoid potential threats. You are also expected identify and describe using marketing segmenting variables, one target market being served by your company.

Students are required to use 3 types of resources in the marketing plan:

1. Industryreports
2. Companyreports
3. Prescribed textbook

Concept of SWOT Analysis

The report gives an outline about the market situation, market size and the target consumers. The word SWOT primarily is the acronym of four words, Strength, Weakness, Opportunity and Threats. These four are considered as the parameter to evaluate the growth of the organization. The purpose of this paper is the SWOT analysis of Yamada Denki Co., Ltd. This is one of the largest Japanese electronics retailers. The company was founded in 1973 and established in 1983.The company`s total business worth around $4.8 billion. The significant product lines of Yamada Denki are electronic home appliances, mobile phones and gaming gadgets, health and nursing appliances. In doing the analysis, a detailed discussion on the four wings of SWOT, related to the brand, will be done (Paprzycki 2013). This report sheds light exclusively on the integral planning of the company, which is required to make a report card about which may indicate the current position of the subject company in the market. Lastly, the report suggests possible opportunities the company should be taking to uplift the company position and the possible measures to reduce the risk of getting defeated by the competitors in the market.

The concept behind SWOT is that, it is a straightforward model, which decides the marketing strategy of a company. SWOT helps to decide which steps should be taken and which not. The word mainly consists of acronyms of four wings – Strength, Weakness, Opportunity and Threats. SWOT analysis analyzes the internal as well as the external factors to attain a certain objective (Phadermrod, Crowder and Wills 2016).

Yamada Denki Co., Ltd. is a largest electronics retailer chain in Japan and exclusively operates in Japan. The company was founded in 1973 it is entirely privately owned. The name of the founder is Noboru Yamada. The head office is in Takasaki. The company owns 223 stores all over the Japan and total 21,138 are employed in this company. The monthly sale of the company is $14.36 billion. The product lines of Yamada Denki Co., Ltd are electronics home appliances, medical appliances, mobile phones and gaming gadgets and equipments related to information technology. It is engaged through the businesses are as follows, home and kitchen appliances, information technology related business such as personal and official computers, printers, scanners, construction and real estate line, electronic appliances repair and recycling business, finance and insurance business, electrical energy business, salon and beauty appliances. The products include color TV, washing machines, cooking related appliances, personal and official computers, telephones, fax machines, mobile phones, gaming gadgets, beauty appliances, accessories, and clothing. The company has merged with a electrical wiring company Nihon Densen. Yamada Denki holds 30% of the electronics retail share in the Japanese market. The company is in the market since 1983 (Yamada-denki.jp 2017). The slogan of the brand is ‘For Your..just’.

Yamada Denki has launched food processor under the own brand name. The USP (unit selling point) of the product is portability and reasonability. The target group of consumers is urban and sub urban (MBA Skool-Study.Learn.Share 2017). The SWOT analysis of the Yamada Denki is as follows,

Brief History of Yamada Denki

According to the SWOT table of Yamada Denki the strength is the most strongest characteristics among all so Strength is ranked one the follows the opportunity. The third rank is for the threats of the company because there are a number of competitors who can manufacture similar products in low price. The last and the fourth will be the weakness as the company is the largest retail chain with a number of product lines so the company is able to overcome its weakness.  

The electronic market of Japan is considered the largest market of electronics in the world. Few companies have been holding a strong position not only in the Japanese market but also across the world, Sony, Hitachi, Panasonic, Fujitsu and Toshiba. The export industry of Japan is unbeatable (Aghion, Hemous, and Kharroubi 2014). The city Tokyo is known as the city of lights, the Akihabara district is widely known for the cheap gadgets. With the wide accessibility of internet, many other foreign markets got their upper hand over Japanese market but the situation changed when Yodobashi Camera launched cheap products in the market. Launching cheap product during recession is the survival strategy of the Japanese market. Japan itself produces television, mobiles, play stations, audio players because of this the market price is low in Japan (Broadbridge 2013). The consumers can grab any electronic product easily at a very low price. Many Japanese companies have contributed their groundbreaking innovations with transistor radio, walkman, and laptops. While the Japanese electronic market is the topic of debate, the market turned around with a major recovery. It is assumed that the valuation of Japanese electronics market is 16% of world`s gold and 22% of world`s silver.   

The size of the Japanese electronics market is significant as Japan is the world`s third largest GDP generator with representing 10% of the world`s economy. Japan is the lone producer of 25% of the world`s electronic gadgets and appliances (Mayer, Melitz and Ottaviano 2014). Japan also holds the 30% share of the world`s automobile market. The annual revenue of major electronics companies is equals to the GDP of Netherlands. The electronics game sector of the Japanese market is the world`s largest revenue generator.

The Japanese electronic market has always been dominant over the electronics market of United States (Chaney and Ossa 2013). Japan is still efficient to maintain that monopoly in exporting electronics across the world. Japan has always been motivated by the labor costs in terms of Foreign Direct Investments.

Yamada Denki is considered as the largest electronics retail chain in Japan. The significance of the company is a large product lineup in reasonable prices. They give discounts for old stocks and showcased items. Their one of the stores named ‘LABI1 Nihon Sohonten Ikebukuro’ is considered popular for its design based on the concepts of environment, health and entertainment (Yamada-denki.jp 2017). Apart from the large sales floor, one would find an ample variety of items, which includes not only electronic equipments, gadgets and appliances, but also stationeries, clothes and accessories, toys and 100,000 books. It also has a restaurant floor and a gaming court.

SWOT Analysis of Yamada Denki

At the onset of the of the 21^st century the Japanese electronics market lost its popularity in from of South Korean Electronics market and Taiwanese electronics market (Brondoni 2014). The electronics goods in the Japanese market faced huge financial loss in every category from television set to audio players, mobiles to play stations. This financial loss also hit hard in Japan`s economy. It is reported that a company like Toshiba faced $17 million loss in 2009. The reasons behind the declination of the market are assumed that, high cost, the declination of yes value in world market and product saturation in the market (Chaney and Ossa 2013). This happens because too many companies are manufacturing same products so there is a scarcity of variety among the products.  

Yamada Denki has shared IR information, such as revenue data and press releases, information on the progress of development of new items or the probable steps of any new initiatives, on their website for the stakeholders and investors. Moreover, company is attempting to strengthen the distribution policy of the company.

In case of Japanese electronics market, the small firms also take responsibility of sales and employment with the large firms. This step helps to make up the deficit of sales and unemployment in the electronics industry (Kam Sing Wong and Tong 2012). This known as market concentration and in Japan market concentration high as small firms hold 30% share of the Japanese electronics market. The growth of the Japanese electronics industry is significant as Japan is the member of the G-7 it is a powerhouse of electronics manufacturing. Japan has the privilege of world`s second largest amount of Foreign Direct Investment, which is approximately $400 billion.

Japan has always been maintaining a sustained growth in terms of per capita income since 1970 after industrialization. Progressing along with an income growth curve through extension of manufacturing is unique. The Western Europe, Canada, Australia and the United States all achieved higher scale of income in terms of per capita (Brondoni 2014). They shifted from agricultural production to manufacturing of technologies and high-end service sector activity. The investment in domestic level in the industry and in the infrastructure was the pivotal point behind growth in Japanese industry. The private and public sectors invested mainly in infrastructure.

Explanation of the SWOT Table

The above table is representing the internal strengths and weaknesses of Yamada Denki and the external opportunities and threats of the company. The food processor was launched in January 2017 (Yamada-denki.jp 2017). Yamada Denki works for the IT and Technology sector. The company is known for its expertise in electronics retailing sector. The major strength is Yamada is its presence is so pervasive that can outshine the foreign retailers. It has captured the third position in the retailing sector. The weakness of the company is its absence in the global market and in internet. The presence of fake products can decline the sale of the new product. The major opportunity is its will power to grow faster across the country and being the single country oriented brand but it can give competition to the rival companies (Yamada-denki.jp 2017). The company may face threat if it does not employ enough employees. The under recruitment can impede the company from achieving innovations (Brondoni 2014). The company should maintain a liaison with its suppliers and distributers to make sure that the products are equally distributed to area of concerned. A good market survey is needed in regular interval or else price war can appear a threat to the company.   

Market Size

After the detailed SWOT analysis on the company Yamada Denki, it can be concluded with that despite having extraordinary products as strength the brand has some threats for being a single country oriented reasonable product. This paper evokes some necessary steps to reduce the external flaws by conducting market research and consumer analysis.

Target Market

The urban and sub urban areas are chosen as the target market for the chosen product. The newly launch product of the company Yamada Denki is the food processor. This product is used on a daily basis in every household. The target customers are mainly the women of the households who look after the daily kitchen activities (Chaney and Ossa 2013). The reason behind choosing the target market as the urban and sub urban areas that maximum numbers of consumers can be attracted.

The newly launch product is food processor by the company named Yamada Denki. Food processor is one of the kitchen appliances, which is used regularly in every household (Kam Sing Wong and Tong 2012). Food processor is close to blender it is used for slicing and mincing the food. Apart from the households it is widely used in the catering industry.

Food processor is something, which cut down the kitchen workload like every other electronics kitchen appliances. This product reduced the manual energy expenses during slicing or mincing food items. This product is widely used in the catering industry. The most ideal customers of this product are the people who are associated with the culinary works specially women in every households (Brondoni 2014). Yamada Denki is providing the good quality food processor in low price so it is obvious that the product is value of money.

   The newly launched product fits in the Strength, Threat scale according to the SWOT table as the product came to the market with a very low price, and the company Yamada Denki is a renowned brand in the market since it is prevailing in the market from 1983. Yamada Denki`s brand value gives the product a strength to the product (Phadermrod, Crowder and Wills 2016). On the other hand, because of the competitors in the market, there is a chance of competition with a similar kind of product with a low price from another good brand.  

Conclusion

The report is based on the marketing management of the new launched product (Jacobsson 2012). Yamada Denki, being a single country oriented retailer chain can outshine the foreign brand. The report gave a SWOT analysis of Yamada Denki the largest company in Japan. The report also provides the detail concept of SWOT (Wedel and Kamakura 2012). An idea of Japanese electronics market is provided along with the market size, market growth and the market distribution. The market of Japan also faced a tough completion in front of Korean and Taiwanese market but with the innovation the market restore its position in the world market.

References

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