University Assignment: Strategic Analysis of Yokogawa Corporation

This report presents a strategic analysis of Yokogawa Electric Corporation, examining its current issues, internal and external factors, and competitive advantages. The analysis utilizes the VRIO framework to assess Yokogawa's resources and capabilities, highlighting its value, rarity, imitability, and organizational strengths. The report identifies key competitive advantages, including strong customer relationships, value creation in bio-economy, and cost reduction strategies. It also acknowledges external challenges such as governmental policies and technological changes. Furthermore, the report proposes a detailed strategic action plan focusing on digital transformation, including the development of IIoT infrastructure, formation of a new department to monitor the framework, and investment in IT. The plan emphasizes the importance of industrial IoT, OT-IT convergence, and the integration of sustainability development goals. The plan also includes utilizing AI, cloud platforms, and process automation to improve business and customer valuation. Overall, the report offers recommendations for Yokogawa's sustainable development and strategic growth.

Running Head: MARKETING MANAGEMENT
Topic-Strategic analysis of Yokogawa
Student name
University name
Author notes

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VRIO framework
The four questioned business analysis frameworks of
VRIO establishes the capability of an organization or
a resource to determine the competitive potentiality
of it (Knott, 2015). It incorporates the question of
Value, Rarity, Imitability and Organization ability.
The VRIO of Yokogawa includes,
Value- It has the core value statement of
“individually, we aim to combine good citizenship
with the courage to innovate”. This value statement
provides an outlook of company culture and
employee engagement.
Rarity- The approach of ‘process co-innovation’ and
business automation is what that differentiates Yokogawa from its competitors.
Imitability- The compact sustainability goals so developed are difficult to imitate and Yokogawa
has advantage in global sustainability. Inclusion of net-zero emission, well being and circular
economy into one is really praiseworthy.
Organization- Both the structure and culture of Yokogawa work environment is very employee
friendly and such good corporate philosophy helps in long run competitive sustainability.

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The main sources of competitive advantage of Yokogawa are,
 Good relationship maintenance with end customers
 Value creation and capitalization of new opportunities in bio-economy business
 Cost reduction in production and logistics supported significant and sustainable growth
 Both internal and external growth in terms of financials and expansion strategies have
added to its success
 Expansion plans outside Japan and considering global business presence will add to
competitive advantage in near future
Yokogawa has good strategic control of its internal factors but external issues are not controlled
and are difficult to control as business firms has little influence in governmental policies,
political changes and socio-economic differences (Sax and Andersen, 2018). Yokogawa has not
approached the strategic management in the way it needed to and need to be more adoptable in
controlling external changes so that success for competitive advantage is leveraged effectively.
Change in regulatory practices in Japan, inflation, governmental interventions, value and societal
norms, demographic changes and technological changes all need to be considered to have
holistic success in sustainable development (Yokogawa.com, 2019).

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Development of strategic action plan of Yokogawa
 First and foremost a flexible and scalable architecture like IIoT (Industrial Internet of
Things) need to be developed for supporting digital transformation. This infrastructure
will improve both business productivity and customer management.
 A new department will be formed to monitor the new architectural framework that will
also co-operate with other departments as well and will also support the Digital Strategy
SQ department (Yokogawa.com, 2019).
 Industrial IoT will be emphasized and value creation through OT-IT (Operational
Technology and Information Technology) convergence will be welcomed
(Yokogawa.com, 2019). Digital native human resources will replace the older generation
of workforce which will optimize plant operation.
 In FY2020, at least 3% of net sales will be invested in IT and maximum part will be on
strategic investments. Digital transformation in process manufacturing will be supported
by smart manufacturing, operational excellence and intelligent decision making.
 The sustainability development goals can be divided into two major divisions one of
business front and the other of core functions within Yokogawa and synaptic business
automation will help achieve the goals efficiently (Yokogawa.com, 2019).
 Value creation will be based on priority and importance of customer valuation, societal
impact and environmental influences. Themes will be formed based on the division and
KPIs will be developed to meet future targets.
 The midterm business plan of 3 years will support risk management and action plan
implementation for digital transformation at large.

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 Utilization of AI, cloud platform, Industry 4.0 and process automation will improve both
business and customer valuation (Yokogawa.com, 2019). Digital marketing tools and
mobile workstyle will help in better productivity and radical improvement for change will
be supported in the most effective manner.

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References
Knott, P.J., 2015. Does VRIO help managers evaluate a firm’s resources?. Management
Decision, 53(8), pp.1806-1822.
Sax, J. and Andersen, T. (2018). Making Risk Management Strategic: Integrating Enterprise
Risk Management with Strategic Planning. European Management Review.
Yokogawa.com. (2019). Digital Transformation | Yokogawa SE Asia. [online] Available at:
https://www.yokogawa.com/sg/solutions/solutions/digital-transformation/ [Accessed 28 Feb.
2019].
Yokogawa.com. (2019). Industrial IoT | Yokogawa SE Asia. [online] Available at:
https://www.yokogawa.com/sg/solutions/solutions/industrial-iot/ [Accessed 28 Feb. 2019].