Based on various researches at Oak Spring University , Nippon Telegraph & Telephone Corp is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, technology disruption, increasing household debt because of falling income levels, geopolitical disruptions, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
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.
Innovation driven organization
– Nippon Telegraph & Telephone Corp is one of the most innovative firm in Communications Services sector.
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.
High switching costs
– The high switching costs that Nippon Telegraph & Telephone Corp has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Nippon Telegraph & Telephone Corp 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.
Analytics focus
– Nippon Telegraph & Telephone Corp 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 Communications Services industry. The technology infrastructure of Japan 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.
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.
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.
Effective Research and Development (R&D)
– Nippon Telegraph & Telephone Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Telegraph & Telephone Corp staying ahead in the Communications Services 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 Communications Services industry
– Nippon Telegraph & Telephone Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Ability to recruit top talent
– Nippon Telegraph & Telephone Corp is one of the leading players in the Communications Services industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Need for greater diversity
– Nippon Telegraph & Telephone Corp 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.
Aligning sales with marketing
– From the outside it seems that Nippon Telegraph & Telephone Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at Nippon Telegraph & Telephone Corp can leverage the sales team experience to cultivate customer relationships as Nippon Telegraph & Telephone Corp is planning to shift buying processes online.
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.
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 -
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.
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.
Better consumer reach
– The expansion of the 5G network will help Nippon Telegraph & Telephone Corp to increase its market reach. Nippon Telegraph & Telephone Corp 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nippon Telegraph & Telephone Corp can use these opportunities to build new business models that can help the communities that Nippon Telegraph & Telephone Corp operates in. Secondly it can use opportunities from government spending in Communications Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nippon Telegraph & Telephone Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
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.
Consumer confidence and its impact on Nippon Telegraph & Telephone Corp 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 Communications Services industry and other sectors.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents Nippon Telegraph & Telephone Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.
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.
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.
High dependence on third party suppliers
– Nippon Telegraph & Telephone Corp 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.
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.
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.
