Johnson Controls-Hitachi Air (JCHA) SWOT Analysis / TOWS Matrix / MBA Resources
Appliance & Tool
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Johnson Controls-Hitachi Air (India)
Based on various researches at Oak Spring University , Johnson Controls-Hitachi Air is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing commodity prices,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of Johnson Controls-Hitachi Air
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Johnson Controls-Hitachi Air can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Johnson Controls-Hitachi Air, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air can be done for the following purposes –
1. Strategic planning of Johnson Controls-Hitachi Air
2. Improving business portfolio management of Johnson Controls-Hitachi Air
3. Assessing feasibility of the new initiative in India
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Johnson Controls-Hitachi Air
Strengths of Johnson Controls-Hitachi Air | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Johnson Controls-Hitachi Air are -
Low bargaining power of suppliers
– Suppliers of Johnson Controls-Hitachi Air in the Consumer Cyclical sector have low bargaining power. Johnson Controls-Hitachi Air has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Johnson Controls-Hitachi Air to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Johnson Controls-Hitachi Air
– The covid-19 pandemic has put organizational resilience at the centre of everthing Johnson Controls-Hitachi Air does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Johnson Controls-Hitachi Air in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Johnson Controls-Hitachi Air is one of the leading players in the Appliance & Tool 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.
Analytics focus
– Johnson Controls-Hitachi Air 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 Appliance & Tool industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Johnson Controls-Hitachi Air has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Johnson Controls-Hitachi Air staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Appliance & Tool industry
– Johnson Controls-Hitachi Air is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Johnson Controls-Hitachi Air has one of the best training and development program in Consumer Cyclical 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.
Learning organization
- Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Johnson Controls-Hitachi Air emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Appliance & Tool industry
– Johnson Controls-Hitachi Air has clearly differentiated products in the market place. This has enabled Johnson Controls-Hitachi Air to fetch slight price premium compare to the competitors in the Appliance & Tool industry. The sustainable margins have also helped Johnson Controls-Hitachi Air to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Johnson Controls-Hitachi Air has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Johnson Controls-Hitachi Air have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Johnson Controls-Hitachi Air comprises – understanding the underlying the factors in the Appliance & Tool 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.
Weaknesses of Johnson Controls-Hitachi Air | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Johnson Controls-Hitachi Air are -
Aligning sales with marketing
– From the outside it seems that Johnson Controls-Hitachi Air needs to have more collaboration between its sales team and marketing team. Sales professionals in the Appliance & Tool industry have deep experience in developing customer relationships. Marketing department at Johnson Controls-Hitachi Air can leverage the sales team experience to cultivate customer relationships as Johnson Controls-Hitachi Air is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Johnson Controls-Hitachi Air is one of the leading players in the Appliance & Tool industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Appliance & Tool industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Johnson Controls-Hitachi Air has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Appliance & Tool industry over the last five years. Johnson Controls-Hitachi Air 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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Johnson Controls-Hitachi Air supply chain. Even after few cautionary changes, Johnson Controls-Hitachi Air is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Johnson Controls-Hitachi Air vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Johnson Controls-Hitachi Air products
– To increase the profitability and margins on the products, Johnson Controls-Hitachi Air needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Appliance & Tool industry, Johnson Controls-Hitachi Air needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of India, Johnson Controls-Hitachi Air needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Johnson Controls-Hitachi Air ‘s star products
– The top 2 products and services of Johnson Controls-Hitachi Air still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though Johnson Controls-Hitachi Air has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Johnson Controls-Hitachi Air, it seems that company is thinking out the frontier risks that can impact Appliance & Tool industry. 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.
Skills based hiring in Appliance & Tool industry
– The stress on hiring functional specialists at Johnson Controls-Hitachi Air 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.
Employees’ less understanding of Johnson Controls-Hitachi Air strategy
– From the outside it seems that the employees of Johnson Controls-Hitachi Air 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.
Johnson Controls-Hitachi Air Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Johnson Controls-Hitachi Air are -
Creating value in data economy
– The success of analytics program of Johnson Controls-Hitachi Air has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help Johnson Controls-Hitachi Air to build a more holistic ecosystem for Johnson Controls-Hitachi Air products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Johnson Controls-Hitachi Air has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Johnson Controls-Hitachi Air can improve the customer journey of consumers in the Appliance & Tool 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, Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Appliance & Tool industry, but it has also influenced the consumer preferences. Johnson Controls-Hitachi Air can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Johnson Controls-Hitachi Air to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Johnson Controls-Hitachi Air can develop new processes and procedures in Appliance & Tool 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Johnson Controls-Hitachi Air can use these opportunities to build new business models that can help the communities that Johnson Controls-Hitachi Air operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Johnson Controls-Hitachi Air can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Johnson Controls-Hitachi Air has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Johnson Controls-Hitachi Air to build a competitive advantage using analytics. The analytics driven competitive advantage can help Johnson Controls-Hitachi Air to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Johnson Controls-Hitachi Air 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
– Johnson Controls-Hitachi Air can use the latest technology developments to improve its manufacturing and designing process in Appliance & Tool 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air to hire the very best people irrespective of their geographical location.
Threats Johnson Controls-Hitachi Air External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Johnson Controls-Hitachi Air are -
Technology acceleration in Forth Industrial Revolution
– Johnson Controls-Hitachi Air has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Johnson Controls-Hitachi Air needs to keep up with the evolution of technology in the Appliance & Tool 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.
Consumer confidence and its impact on Johnson Controls-Hitachi Air 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 Appliance & Tool industry and other sectors.
High dependence on third party suppliers
– Johnson Controls-Hitachi Air 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.
Shortening product life cycle
– it is one of the major threat that Johnson Controls-Hitachi Air is facing in Appliance & Tool sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Johnson Controls-Hitachi Air 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 Appliance & Tool industry regulations.
Easy access to finance
– Easy access to finance in Appliance & Tool industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Johnson Controls-Hitachi Air can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air prominent markets.
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.
Environmental challenges
– Johnson Controls-Hitachi Air 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. Johnson Controls-Hitachi Air can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Johnson Controls-Hitachi Air in Appliance & Tool industry. The Appliance & Tool industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Johnson Controls-Hitachi Air needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.
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. Johnson Controls-Hitachi Air 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.
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 Johnson Controls-Hitachi Air.
Weighted SWOT Analysis of Johnson Controls-Hitachi Air Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air 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 Johnson Controls-Hitachi Air needs to make to build a sustainable competitive advantage.