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Nippon Steel&Sumitomo Metal Corp. (5401) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nippon Steel&Sumitomo Metal Corp. (Japan)


Based on various researches at Oak Spring University , Nippon Steel&Sumitomo Metal Corp. is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc



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Introduction to SWOT Analysis of Nippon Steel&Sumitomo Metal Corp.


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




Strengths of Nippon Steel&Sumitomo Metal Corp. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nippon Steel&Sumitomo Metal Corp. are -

Operational resilience

– The operational resilience strategy of Nippon Steel&Sumitomo Metal Corp. comprises – understanding the underlying the factors in the Iron & Steel 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.

Successful track record of launching new products

– Nippon Steel&Sumitomo Metal Corp. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nippon Steel&Sumitomo Metal 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.

Effective Research and Development (R&D)

– Nippon Steel&Sumitomo Metal Corp. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Steel&Sumitomo Metal Corp. staying ahead in the Iron & Steel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Sustainable margins compare to other players in Iron & Steel industry

– Nippon Steel&Sumitomo Metal Corp. has clearly differentiated products in the market place. This has enabled Nippon Steel&Sumitomo Metal Corp. to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped Nippon Steel&Sumitomo Metal Corp. to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Nippon Steel&Sumitomo Metal Corp. is present in almost all the verticals within the Iron & Steel industry. This has provided Nippon Steel&Sumitomo Metal 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.

Highly skilled collaborators

– Nippon Steel&Sumitomo Metal Corp. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of Nippon Steel&Sumitomo Metal Corp. have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to lead change in Iron & Steel

– Nippon Steel&Sumitomo Metal Corp. is one of the leading players in the Iron & Steel industry in Japan. Over the years it has not only transformed the business landscape in the Iron & Steel industry in Japan but also across the existing markets. The ability to lead change has enabled Nippon Steel&Sumitomo Metal Corp. in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- Nippon Steel&Sumitomo Metal 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 Steel&Sumitomo Metal Corp. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nippon Steel&Sumitomo Metal Corp. emphasize – knowledge, initiative, and innovation.

Organizational Resilience of Nippon Steel&Sumitomo Metal Corp.

– The covid-19 pandemic has put organizational resilience at the centre of everthing Nippon Steel&Sumitomo Metal Corp. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Iron & Steel industry

- digital transformation varies from industry to industry. For Nippon Steel&Sumitomo Metal Corp. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nippon Steel&Sumitomo Metal Corp. has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Low bargaining power of suppliers

– Suppliers of Nippon Steel&Sumitomo Metal Corp. in the Basic Materials sector have low bargaining power. Nippon Steel&Sumitomo Metal Corp. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nippon Steel&Sumitomo Metal Corp. to manage not only supply disruptions but also source products at highly competitive prices.

Innovation driven organization

– Nippon Steel&Sumitomo Metal Corp. is one of the most innovative firm in Iron & Steel sector.






Weaknesses of Nippon Steel&Sumitomo Metal Corp. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nippon Steel&Sumitomo Metal Corp. are -

Slow to strategic competitive environment developments

– As Nippon Steel&Sumitomo Metal Corp. is one of the leading players in the Iron & Steel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Iron & Steel industry in last five years.

Compensation and incentives

– The revenue per employee of Nippon Steel&Sumitomo Metal Corp. is just above the Iron & Steel 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.

No frontier risks strategy

– From the 10K / annual statement of Nippon Steel&Sumitomo Metal Corp., it seems that company is thinking out the frontier risks that can impact Iron & Steel 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.

Slow decision making process

– As mentioned earlier in the report, Nippon Steel&Sumitomo Metal Corp. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. Nippon Steel&Sumitomo Metal Corp. 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.

Employees’ less understanding of Nippon Steel&Sumitomo Metal Corp. strategy

– From the outside it seems that the employees of Nippon Steel&Sumitomo Metal Corp. 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.

Products dominated business model

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

High dependence on Nippon Steel&Sumitomo Metal Corp. ‘s star products

– The top 2 products and services of Nippon Steel&Sumitomo Metal Corp. still accounts for major business revenue. This dependence on star products in Iron & Steel industry has resulted into insufficient focus on developing new products, even though Nippon Steel&Sumitomo Metal Corp. has relatively successful track record of launching new products.

High bargaining power of channel partners in Iron & Steel industry

– because of the regulatory requirements in Japan, Nippon Steel&Sumitomo Metal 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 Iron & Steel industry.

Ability to respond to the competition

– As the decision making is very deliberative at Nippon Steel&Sumitomo Metal Corp., in the dynamic environment of Iron & Steel industry it has struggled to respond to the nimble upstart competition. Nippon Steel&Sumitomo Metal Corp. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High cash cycle compare to competitors

Nippon Steel&Sumitomo Metal Corp. has a high cash cycle compare to other players in the Iron & Steel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Low market penetration in new markets

– Outside its home market of Japan, Nippon Steel&Sumitomo Metal Corp. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.




Nippon Steel&Sumitomo Metal Corp. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Nippon Steel&Sumitomo Metal Corp. are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. Nippon Steel&Sumitomo Metal Corp. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Developing new processes and practices

– Nippon Steel&Sumitomo Metal Corp. can develop new processes and procedures in Iron & Steel 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Nippon Steel&Sumitomo Metal Corp. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.

Learning at scale

– Online learning technologies has now opened space for Nippon Steel&Sumitomo Metal Corp. 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.

Use of Bitcoin and other crypto currencies for transactions in Iron & Steel industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nippon Steel&Sumitomo Metal Corp. in the Iron & Steel industry. Now Nippon Steel&Sumitomo Metal Corp. can target international markets with far fewer capital restrictions requirements than the existing system.

Low interest rates

– Even though inflation is raising its head in most developed economies, Nippon Steel&Sumitomo Metal 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.

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 Steel&Sumitomo Metal Corp. can use these opportunities to build new business models that can help the communities that Nippon Steel&Sumitomo Metal Corp. operates in. Secondly it can use opportunities from government spending in Iron & Steel sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Nippon Steel&Sumitomo Metal 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 Steel&Sumitomo Metal 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 Steel&Sumitomo Metal 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 Iron & Steel industry.

Buying journey improvements

– Nippon Steel&Sumitomo Metal Corp. can improve the customer journey of consumers in the Iron & Steel 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.

Manufacturing automation

– Nippon Steel&Sumitomo Metal Corp. can use the latest technology developments to improve its manufacturing and designing process in Iron & Steel 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.

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 Steel&Sumitomo Metal 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.

Loyalty marketing

– Nippon Steel&Sumitomo Metal 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.




Threats Nippon Steel&Sumitomo Metal Corp. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Nippon Steel&Sumitomo Metal Corp. are -

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 Steel&Sumitomo Metal 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Nippon Steel&Sumitomo Metal Corp. in Iron & Steel industry. The Iron & Steel 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.

Increasing wage structure of Nippon Steel&Sumitomo Metal 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 Steel&Sumitomo Metal Corp..

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Nippon Steel&Sumitomo Metal 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 Iron & Steel sector.

Environmental challenges

– Nippon Steel&Sumitomo Metal 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 Steel&Sumitomo Metal Corp. can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.

Technology acceleration in Forth Industrial Revolution

– Nippon Steel&Sumitomo Metal Corp. has witnessed rapid integration of technology during Covid-19 in the Iron & Steel industry. As one of the leading players in the industry, Nippon Steel&Sumitomo Metal Corp. needs to keep up with the evolution of technology in the Iron & Steel 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.

Easy access to finance

– Easy access to finance in Iron & Steel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nippon Steel&Sumitomo Metal Corp. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

High dependence on third party suppliers

– Nippon Steel&Sumitomo Metal 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.

Shortening product life cycle

– it is one of the major threat that Nippon Steel&Sumitomo Metal Corp. is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Steel&Sumitomo Metal Corp. needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Iron & Steel industry are lowering. It can presents Nippon Steel&Sumitomo Metal Corp. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Iron & Steel 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 Steel&Sumitomo Metal 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 Steel&Sumitomo Metal Corp. in the Iron & Steel sector and impact the bottomline of the organization.




Weighted SWOT Analysis of Nippon Steel&Sumitomo Metal Corp. Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nippon Steel&Sumitomo Metal 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 Steel&Sumitomo Metal 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 Steel&Sumitomo Metal 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 Steel&Sumitomo Metal 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 Steel&Sumitomo Metal Corp. needs to make to build a sustainable competitive advantage.



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