Nireco Co., Japan: Introduction of the Poison Pill SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nireco Co., Japan: Introduction of the Poison Pill
Japanese corporations faced the looming threat of hostile takeovers because of the rapid dissolution of cross-shareholdings that began in the 1990s; in particular, between creditor banks and corporate borrowers. As a result of this uncoupling the share of stable shareholders, those in long-term business relationships with the corporation, fell by half over the past 10 years. On the other hand, foreign ownership of Japanese companies, which used to account for only a small percentage of all outstanding shares, rose rapidly. Thus, the proportion of free-floating shares has risen significantly, implying that buying out a company by means of a takeover bid in Japan has become far easier. Although Japanese corporations have traditionally believed that hostile takeover bids have little chance of success, Hidemaru Yamada, president of Nireco Corp.--a high-tech measuring device manufacturer--felt the need to introduce "poison pill" defenses to counter possible hostile takeover bids from foreign investors. Nireco assessed the situation regarding the introduction of poison pills, taking into account Japan's institutional infrastructure, its laws, and its economic conditions; in March 2005, it announced a "security plan," which included an issue of subscription warrants to existing shareholders in the event of an unfriendly takeover bid.
Swot Analysis of "Nireco Co., Japan: Introduction of the Poison Pill" written by Mitsuru Misawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nireco Poison facing as an external strategic factors. Some of the topics covered in Nireco Co., Japan: Introduction of the Poison Pill case study are - Strategic Management Strategies, Corporate governance, Financial management, Mergers & acquisitions, Negotiations, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nireco Co., Japan: Introduction of the Poison Pill casestudy better are - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of Nireco Co., Japan: Introduction of the Poison Pill
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nireco Co., Japan: Introduction of the Poison Pill case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nireco Poison, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nireco Poison 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 Nireco Co., Japan: Introduction of the Poison Pill can be done for the following purposes –
1. Strategic planning using facts provided in Nireco Co., Japan: Introduction of the Poison Pill case study
2. Improving business portfolio management of Nireco Poison
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nireco Poison
Strengths Nireco Co., Japan: Introduction of the Poison Pill | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nireco Poison in Nireco Co., Japan: Introduction of the Poison Pill Harvard Business Review case study are -
Innovation driven organization
– Nireco Poison is one of the most innovative firm in sector. Manager in Nireco Co., Japan: Introduction of the Poison Pill Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Nireco Poison has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nireco Co., Japan: Introduction of the Poison Pill Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Nireco Poison is present in almost all the verticals within the industry. This has provided firm in Nireco Co., Japan: Introduction of the Poison Pill case study 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.
Ability to lead change in Strategy & Execution field
– Nireco Poison is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nireco Poison in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Nireco Poison
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nireco Poison does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nireco Poison digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nireco Poison 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.
Effective Research and Development (R&D)
– Nireco Poison has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nireco Co., Japan: Introduction of the Poison Pill - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Nireco Poison 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 Nireco Poison is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nireco Co., Japan: Introduction of the Poison Pill Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Nireco Poison is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Nireco Poison is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Mitsuru Misawa can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Nireco Poison 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.
Low bargaining power of suppliers
– Suppliers of Nireco Poison in the sector have low bargaining power. Nireco Co., Japan: Introduction of the Poison Pill has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nireco Poison to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Nireco Co., Japan: Introduction of the Poison Pill | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nireco Co., Japan: Introduction of the Poison Pill are -
Lack of clear differentiation of Nireco Poison products
– To increase the profitability and margins on the products, Nireco Poison needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Nireco Co., Japan: Introduction of the Poison Pill, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. 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.
Slow decision making process
– As mentioned earlier in the report, Nireco Poison has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nireco Poison even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nireco Co., Japan: Introduction of the Poison Pill HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nireco Poison has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Nireco Poison, firm in the HBR case study Nireco Co., Japan: Introduction of the Poison Pill needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nireco Poison is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nireco Co., Japan: Introduction of the Poison Pill can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Nireco Poison 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nireco Co., Japan: Introduction of the Poison Pill, is just above the industry average. Nireco Poison 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nireco Co., Japan: Introduction of the Poison Pill, it seems that the employees of Nireco Poison don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Nireco Poison has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Nireco Co., Japan: Introduction of the Poison Pill HBR case study mentions - Nireco Poison takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Nireco Co., Japan: Introduction of the Poison Pill | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nireco Co., Japan: Introduction of the Poison Pill are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nireco Poison can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nireco Co., Japan: Introduction of the Poison Pill, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nireco Poison 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. Nireco Poison 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nireco Poison 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 Nireco Poison to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Nireco Poison to increase its market reach. Nireco Poison 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.
Using analytics as competitive advantage
– Nireco Poison has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nireco Co., Japan: Introduction of the Poison Pill - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nireco Poison to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Nireco Poison has opened avenues for new revenue streams for the organization in the industry. This can help Nireco Poison to build a more holistic ecosystem as suggested in the Nireco Co., Japan: Introduction of the Poison Pill case study. Nireco Poison can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nireco Poison can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Nireco Poison 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.
Buying journey improvements
– Nireco Poison can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nireco Co., Japan: Introduction of the Poison Pill suggest that firm 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.
Leveraging digital technologies
– Nireco Poison 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.
Manufacturing automation
– Nireco Poison can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nireco Poison in the consumer business. Now Nireco Poison can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Nireco Poison can develop new processes and procedures in Strategy & Execution 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.
Threats Nireco Co., Japan: Introduction of the Poison Pill External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nireco Co., Japan: Introduction of the Poison Pill are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nireco Co., Japan: Introduction of the Poison Pill, Nireco Poison may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Nireco Poison 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.
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 Nireco Poison in the Strategy & Execution 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.
Stagnating economy with rate increase
– Nireco Poison 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 field.
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 Nireco Poison business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nireco Poison.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nireco Poison with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nireco Poison can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Nireco Poison 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.
Technology acceleration in Forth Industrial Revolution
– Nireco Poison has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nireco Poison needs to keep up with the evolution of technology in the Strategy & Execution 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.
Environmental challenges
– Nireco Poison 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. Nireco Poison can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Nireco Co., Japan: Introduction of the Poison Pill Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nireco Co., Japan: Introduction of the Poison Pill 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 the case study Nireco Co., Japan: Introduction of the Poison Pill 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 the Harvard case study Nireco Co., Japan: Introduction of the Poison Pill 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 Nireco Co., Japan: Introduction of the Poison Pill is 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 Nireco Poison needs to make to build a sustainable competitive advantage.