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Chugai Pharmaceutical (4519) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chugai Pharmaceutical (Japan)


Based on various researches at Oak Spring University , Chugai Pharmaceutical 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, increasing household debt because of falling income levels, there is backlash against globalization, wage bills are increasing, geopolitical disruptions, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc



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Introduction to SWOT Analysis of Chugai Pharmaceutical


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chugai Pharmaceutical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chugai Pharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chugai Pharmaceutical 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 Chugai Pharmaceutical can be done for the following purposes –
1. Strategic planning of Chugai Pharmaceutical
2. Improving business portfolio management of Chugai Pharmaceutical
3. Assessing feasibility of the new initiative in Japan
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chugai Pharmaceutical




Strengths of Chugai Pharmaceutical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chugai Pharmaceutical are -

Cross disciplinary teams

– Horizontal connected teams at the Chugai Pharmaceutical 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.

Ability to recruit top talent

– Chugai Pharmaceutical is one of the leading players in the Major Drugs 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.

High brand equity

– Chugai Pharmaceutical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chugai Pharmaceutical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

High switching costs

– The high switching costs that Chugai Pharmaceutical 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.

Diverse revenue streams

– Chugai Pharmaceutical is present in almost all the verticals within the Major Drugs industry. This has provided Chugai Pharmaceutical 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.

Superior customer experience

– The customer experience strategy of Chugai Pharmaceutical in Major Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Major Drugs

– Chugai Pharmaceutical is one of the leading players in the Major Drugs industry in Japan. Over the years it has not only transformed the business landscape in the Major Drugs industry in Japan but also across the existing markets. The ability to lead change has enabled Chugai Pharmaceutical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

– Chugai Pharmaceutical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Major Drugs industry. Secondly the value chain collaborators of Chugai Pharmaceutical have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Chugai Pharmaceutical

– The covid-19 pandemic has put organizational resilience at the centre of everthing Chugai Pharmaceutical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Effective Research and Development (R&D)

– Chugai Pharmaceutical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chugai Pharmaceutical staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Training and development

– Chugai Pharmaceutical has one of the best training and development program in Healthcare 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

– Chugai Pharmaceutical is one of the most innovative firm in Major Drugs sector.



02468Kao Corp. Shin-Etsu Chemical Denso Corp. Oriental Land Co Ltd Tokio Marine Holdings, Inc. Chugai Pharmaceutical
Net Promoter Score



Weaknesses of Chugai Pharmaceutical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chugai Pharmaceutical are -

Low market penetration in new markets

– Outside its home market of Japan, Chugai Pharmaceutical needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High bargaining power of channel partners in Major Drugs industry

– because of the regulatory requirements in Japan, Chugai Pharmaceutical 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 Major Drugs industry.

Products dominated business model

– Even though Chugai Pharmaceutical has some of the most successful models in the Major Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chugai Pharmaceutical should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– From the outside it seems that Chugai Pharmaceutical needs to have more collaboration between its sales team and marketing team. Sales professionals in the Major Drugs industry have deep experience in developing customer relationships. Marketing department at Chugai Pharmaceutical can leverage the sales team experience to cultivate customer relationships as Chugai Pharmaceutical is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative at Chugai Pharmaceutical, in the dynamic environment of Major Drugs industry it has struggled to respond to the nimble upstart competition. Chugai Pharmaceutical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Workers concerns about automation

– As automation is fast increasing in the Major Drugs industry, Chugai Pharmaceutical 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.

Skills based hiring in Major Drugs industry

– The stress on hiring functional specialists at Chugai Pharmaceutical 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.

Increasing silos among functional specialists

– The organizational structure of Chugai Pharmaceutical is dominated by functional specialists. It is not different from other players in the Major Drugs industry, but Chugai Pharmaceutical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chugai Pharmaceutical to focus more on services in the Major Drugs industry rather than just following the product oriented approach.

High dependence on Chugai Pharmaceutical ‘s star products

– The top 2 products and services of Chugai Pharmaceutical still accounts for major business revenue. This dependence on star products in Major Drugs industry has resulted into insufficient focus on developing new products, even though Chugai Pharmaceutical has relatively successful track record of launching new products.

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 Chugai Pharmaceutical supply chain. Even after few cautionary changes, Chugai Pharmaceutical is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chugai Pharmaceutical vulnerable to further global disruptions in South East Asia.

Capital Spending Reduction

– Even during the low interest decade, Chugai Pharmaceutical 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 Major Drugs industry using digital technology.




Chugai Pharmaceutical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Chugai Pharmaceutical are -

Building a culture of innovation

– managers at Chugai Pharmaceutical 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 Major Drugs industry.

Developing new processes and practices

– Chugai Pharmaceutical can develop new processes and procedures in Major Drugs 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Major Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chugai Pharmaceutical 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. Chugai Pharmaceutical 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.

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 Chugai Pharmaceutical 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Chugai Pharmaceutical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Major Drugs industry, and it will provide faster access to the consumers.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Chugai Pharmaceutical 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 Chugai Pharmaceutical to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Use of Bitcoin and other crypto currencies for transactions in Major Drugs industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chugai Pharmaceutical in the Major Drugs industry. Now Chugai Pharmaceutical can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– Chugai Pharmaceutical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Major Drugs sector. This continuous investment in analytics has enabled Chugai Pharmaceutical to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chugai Pharmaceutical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– Chugai Pharmaceutical can use the latest technology developments to improve its manufacturing and designing process in Major Drugs 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.

Learning at scale

– Online learning technologies has now opened space for Chugai Pharmaceutical to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Chugai Pharmaceutical is facing challenges because of the dominance of functional experts in the organization. Chugai Pharmaceutical can utilize new technology in the field of Major Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Better consumer reach

– The expansion of the 5G network will help Chugai Pharmaceutical to increase its market reach. Chugai Pharmaceutical 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.

Leveraging digital technologies

– Chugai Pharmaceutical 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.




Threats Chugai Pharmaceutical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Chugai Pharmaceutical are -

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.

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 Chugai Pharmaceutical.

Technology acceleration in Forth Industrial Revolution

– Chugai Pharmaceutical has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, Chugai Pharmaceutical needs to keep up with the evolution of technology in the Major Drugs 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Chugai Pharmaceutical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Major Drugs sector.

Regulatory challenges

– Chugai Pharmaceutical 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 Major Drugs industry regulations.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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. Chugai Pharmaceutical 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.

Increasing wage structure of Chugai Pharmaceutical

– 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 Chugai Pharmaceutical.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Major Drugs industry are lowering. It can presents Chugai Pharmaceutical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Major Drugs sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Chugai Pharmaceutical 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 Chugai Pharmaceutical prominent markets.

Consumer confidence and its impact on Chugai Pharmaceutical 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 Major Drugs industry and other sectors.

High dependence on third party suppliers

– Chugai Pharmaceutical 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Chugai Pharmaceutical in Major Drugs industry. The Major Drugs 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.




Weighted SWOT Analysis of Chugai Pharmaceutical Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chugai Pharmaceutical 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 Chugai Pharmaceutical 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 Chugai Pharmaceutical 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 Chugai Pharmaceutical 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 Chugai Pharmaceutical needs to make to build a sustainable competitive advantage.



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