SWOT Analysis / TOWS Matrix for Kansai Nerolac Paints (India)
Based on various researches at Oak Spring University , Kansai Nerolac Paints is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, technology disruption, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing energy prices, increasing government debt because of Covid-19 spendings,
wage bills are increasing, increasing commodity prices, etc
Introduction to SWOT Analysis of Kansai Nerolac Paints
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kansai Nerolac Paints can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kansai Nerolac Paints, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kansai Nerolac Paints 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 Kansai Nerolac Paints can be done for the following purposes –
1. Strategic planning of Kansai Nerolac Paints
2. Improving business portfolio management of Kansai Nerolac Paints
3. Assessing feasibility of the new initiative in India
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kansai Nerolac Paints
Strengths of Kansai Nerolac Paints | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kansai Nerolac Paints are -
Ability to recruit top talent
– Kansai Nerolac Paints is one of the leading players in the Chemical Manufacturing industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Chemical Manufacturing
– Kansai Nerolac Paints is one of the leading players in the Chemical Manufacturing industry in India. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in India but also across the existing markets. The ability to lead change has enabled Kansai Nerolac Paints in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Kansai Nerolac Paints is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Kansai Nerolac Paints 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.
Training and development
– Kansai Nerolac Paints has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Kansai Nerolac Paints is one of the most innovative firm in Chemical Manufacturing sector.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Kansai Nerolac Paints has clearly differentiated products in the market place. This has enabled Kansai Nerolac Paints to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Kansai Nerolac Paints to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Kansai Nerolac Paints 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.
Effective Research and Development (R&D)
– Kansai Nerolac Paints has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kansai Nerolac Paints staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Kansai Nerolac Paints in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Kansai Nerolac Paints comprises – understanding the underlying the factors in the Chemical Manufacturing industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management in the Chemical Manufacturing industry
– Kansai Nerolac Paints is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Kansai Nerolac Paints in the Basic Materials sector have low bargaining power. Kansai Nerolac Paints has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kansai Nerolac Paints to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Kansai Nerolac Paints | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kansai Nerolac Paints are -
Increasing silos among functional specialists
– The organizational structure of Kansai Nerolac Paints is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Kansai Nerolac Paints needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kansai Nerolac Paints to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kansai Nerolac Paints is slow explore the new channels of communication. These new channels of communication can help Kansai Nerolac Paints to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Kansai Nerolac Paints strategy
– From the outside it seems that the employees of Kansai Nerolac Paints 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.
Need for greater diversity
– Kansai Nerolac Paints has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Kansai Nerolac Paints has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Kansai Nerolac Paints 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 Kansai Nerolac Paints ‘s star products
– The top 2 products and services of Kansai Nerolac Paints still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Kansai Nerolac Paints has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Kansai Nerolac Paints is just above the Chemical Manufacturing industry average. It 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.
Capital Spending Reduction
– Even during the low interest decade, Kansai Nerolac Paints has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Chemical Manufacturing industry using digital technology.
Low market penetration in new markets
– Outside its home market of India, Kansai Nerolac Paints needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Kansai Nerolac Paints 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 Kansai Nerolac Paints is one of the leading players in the Chemical Manufacturing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Chemical Manufacturing industry in last five years.
Kansai Nerolac Paints Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kansai Nerolac Paints are -
Manufacturing automation
– Kansai Nerolac Paints can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kansai Nerolac Paints 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. Kansai Nerolac Paints 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kansai Nerolac Paints can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Kansai Nerolac Paints has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Kansai Nerolac Paints to build a more holistic ecosystem for Kansai Nerolac Paints products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kansai Nerolac Paints is facing challenges because of the dominance of functional experts in the organization. Kansai Nerolac Paints can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kansai Nerolac Paints in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemical Manufacturing industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Kansai Nerolac Paints 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 Chemical Manufacturing industry.
Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kansai Nerolac Paints in the Chemical Manufacturing industry. Now Kansai Nerolac Paints can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Kansai Nerolac Paints has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Kansai Nerolac Paints to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kansai Nerolac Paints to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Kansai Nerolac Paints can develop new processes and procedures in Chemical Manufacturing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kansai Nerolac Paints 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 Kansai Nerolac Paints to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Kansai Nerolac Paints can improve the customer journey of consumers in the Chemical Manufacturing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kansai Nerolac Paints 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 Kansai Nerolac Paints to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Kansai Nerolac Paints External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kansai Nerolac Paints are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kansai Nerolac Paints may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kansai Nerolac Paints can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Kansai Nerolac Paints needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
Regulatory challenges
– Kansai Nerolac Paints needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Chemical Manufacturing industry regulations.
Environmental challenges
– Kansai Nerolac Paints 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. Kansai Nerolac Paints can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Shortening product life cycle
– it is one of the major threat that Kansai Nerolac Paints is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Consumer confidence and its impact on Kansai Nerolac Paints 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 Chemical Manufacturing industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kansai Nerolac Paints 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 Kansai Nerolac Paints prominent markets.
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. Kansai Nerolac Paints 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.
Stagnating economy with rate increase
– Kansai Nerolac Paints 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 Chemical Manufacturing 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 Kansai Nerolac Paints business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Kansai Nerolac Paints 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.
Weighted SWOT Analysis of Kansai Nerolac Paints Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kansai Nerolac Paints 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 Kansai Nerolac Paints 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 Kansai Nerolac Paints 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 Kansai Nerolac Paints 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 Kansai Nerolac Paints needs to make to build a sustainable competitive advantage.
