Based on various researches at Oak Spring University , Nippon Telegraph & Telephone Corp is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
there is backlash against globalization, technology disruption, etc
Introduction to SWOT Analysis of Nippon Telegraph & Telephone Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nippon Telegraph & Telephone Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nippon Telegraph & Telephone Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp can be done for the following purposes –
1. Strategic planning of Nippon Telegraph & Telephone Corp
2. Improving business portfolio management of Nippon Telegraph & Telephone Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nippon Telegraph & Telephone Corp
Strengths of Nippon Telegraph & Telephone Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nippon Telegraph & Telephone Corp are -
Organizational Resilience of Nippon Telegraph & Telephone Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nippon Telegraph & Telephone Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Communications Services
– Nippon Telegraph & Telephone Corp is one of the leading players in the Communications Services industry in Japan. Over the years it has not only transformed the business landscape in the Communications Services industry in Japan but also across the existing markets. The ability to lead change has enabled Nippon Telegraph & Telephone Corp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Communications Services industry
– Nippon Telegraph & Telephone Corp has clearly differentiated products in the market place. This has enabled Nippon Telegraph & Telephone Corp to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Nippon Telegraph & Telephone Corp to invest into research and development (R&D) and innovation.
Training and development
– Nippon Telegraph & Telephone Corp has one of the best training and development program in Services 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
- Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nippon Telegraph & Telephone Corp emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Nippon Telegraph & Telephone Corp in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Nippon Telegraph & Telephone Corp is present in almost all the verticals within the Communications Services industry. This has provided Nippon Telegraph & Telephone Corp 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.
High brand equity
– Nippon Telegraph & Telephone Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nippon Telegraph & Telephone Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Nippon Telegraph & Telephone Corp is one of the most innovative firm in Communications Services sector.
Highly skilled collaborators
– Nippon Telegraph & Telephone Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Nippon Telegraph & Telephone Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Nippon Telegraph & Telephone Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nippon Telegraph & Telephone Corp has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy of Nippon Telegraph & Telephone Corp comprises – understanding the underlying the factors in the Communications Services 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 Nippon Telegraph & Telephone Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nippon Telegraph & Telephone Corp are -
High bargaining power of channel partners in Communications Services industry
– because of the regulatory requirements in Japan, Nippon Telegraph & Telephone Corp is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Communications Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Nippon Telegraph & Telephone Corp, in the dynamic environment of Communications Services industry it has struggled to respond to the nimble upstart competition. Nippon Telegraph & Telephone Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nippon Telegraph & Telephone Corp is slow explore the new channels of communication. These new channels of communication can help Nippon Telegraph & Telephone Corp to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Nippon Telegraph & Telephone Corp 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.
Lack of clear differentiation of Nippon Telegraph & Telephone Corp products
– To increase the profitability and margins on the products, Nippon Telegraph & Telephone Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Japan, Nippon Telegraph & Telephone Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Nippon Telegraph & Telephone Corp ‘s star products
– The top 2 products and services of Nippon Telegraph & Telephone Corp still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Nippon Telegraph & Telephone Corp has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, Nippon Telegraph & Telephone Corp 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.
Slow to strategic competitive environment developments
– As Nippon Telegraph & Telephone Corp is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Compensation and incentives
– The revenue per employee of Nippon Telegraph & Telephone Corp is just above the Communications Services 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.
Increasing silos among functional specialists
– The organizational structure of Nippon Telegraph & Telephone Corp is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Nippon Telegraph & Telephone Corp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nippon Telegraph & Telephone Corp to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Nippon Telegraph & Telephone Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nippon Telegraph & Telephone Corp are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Nippon Telegraph & Telephone Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nippon Telegraph & Telephone Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Nippon Telegraph & Telephone Corp 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nippon Telegraph & Telephone Corp 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.
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 Nippon Telegraph & Telephone Corp 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.
Building a culture of innovation
– managers at Nippon Telegraph & Telephone Corp 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 Communications Services industry.
Developing new processes and practices
– Nippon Telegraph & Telephone Corp can develop new processes and procedures in Communications Services 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.
Using analytics as competitive advantage
– Nippon Telegraph & Telephone Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled Nippon Telegraph & Telephone Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nippon Telegraph & Telephone Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nippon Telegraph & Telephone Corp in the Communications Services industry. Now Nippon Telegraph & Telephone Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nippon Telegraph & Telephone Corp 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. Nippon Telegraph & Telephone Corp 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nippon Telegraph & Telephone Corp is facing challenges because of the dominance of functional experts in the organization. Nippon Telegraph & Telephone Corp can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nippon Telegraph & Telephone Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Nippon Telegraph & Telephone Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nippon Telegraph & Telephone Corp are -
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 Nippon Telegraph & Telephone Corp business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Nippon Telegraph & Telephone Corp
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nippon Telegraph & Telephone Corp.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nippon Telegraph & Telephone Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Nippon Telegraph & Telephone Corp has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, Nippon Telegraph & Telephone Corp needs to keep up with the evolution of technology in the Communications Services 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.
Regulatory challenges
– Nippon Telegraph & Telephone Corp 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 Communications Services industry regulations.
Environmental challenges
– Nippon Telegraph & Telephone Corp 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. Nippon Telegraph & Telephone Corp can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
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. Nippon Telegraph & Telephone Corp needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
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 Nippon Telegraph & Telephone Corp.
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 Nippon Telegraph & Telephone Corp in the Communications Services sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Nippon Telegraph & Telephone Corp 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 Communications Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp 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. Nippon Telegraph & Telephone Corp 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.
Shortening product life cycle
– it is one of the major threat that Nippon Telegraph & Telephone Corp is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Nippon Telegraph & Telephone Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp needs to make to build a sustainable competitive advantage.