Mitsubishi Chemical Holdings Corp (4188) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Mitsubishi Chemical Holdings Corp (Japan)
Based on various researches at Oak Spring University , Mitsubishi Chemical Holdings Corp is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, technology disruption,
banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Mitsubishi Chemical Holdings Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mitsubishi Chemical Holdings Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mitsubishi Chemical Holdings Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp can be done for the following purposes –
1. Strategic planning of Mitsubishi Chemical Holdings Corp
2. Improving business portfolio management of Mitsubishi Chemical Holdings Corp
3. Assessing feasibility of the new initiative in Japan
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mitsubishi Chemical Holdings Corp
Strengths of Mitsubishi Chemical Holdings Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mitsubishi Chemical Holdings Corp are -
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Mitsubishi Chemical Holdings Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mitsubishi Chemical Holdings 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.
Organizational Resilience of Mitsubishi Chemical Holdings Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Mitsubishi Chemical Holdings Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Mitsubishi Chemical Holdings Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mitsubishi Chemical Holdings Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Mitsubishi Chemical Holdings Corp has one of the best training and development program in Basic Materials 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.
Strong track record of project management in the Chemical Manufacturing industry
– Mitsubishi Chemical Holdings 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.
Analytics focus
– Mitsubishi Chemical Holdings 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 Chemical Manufacturing 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.
Learning organization
- Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mitsubishi Chemical Holdings Corp emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Mitsubishi Chemical Holdings Corp in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Mitsubishi Chemical Holdings Corp has clearly differentiated products in the market place. This has enabled Mitsubishi Chemical Holdings Corp to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Mitsubishi Chemical Holdings Corp to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Mitsubishi Chemical Holdings 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.
Highly skilled collaborators
– Mitsubishi Chemical Holdings Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemical Manufacturing industry. Secondly the value chain collaborators of Mitsubishi Chemical Holdings Corp have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Mitsubishi Chemical Holdings 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.
Weaknesses of Mitsubishi Chemical Holdings Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mitsubishi Chemical Holdings Corp are -
High operating costs
– Compare to the competitors, Mitsubishi Chemical Holdings Corp has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mitsubishi Chemical Holdings Corp lucrative customers.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Mitsubishi Chemical Holdings Corp 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.
Compensation and incentives
– The revenue per employee of Mitsubishi Chemical Holdings Corp is just above the Chemical Manufacturing 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.
Lack of clear differentiation of Mitsubishi Chemical Holdings Corp products
– To increase the profitability and margins on the products, Mitsubishi Chemical Holdings Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Chemical Manufacturing industry, Mitsubishi Chemical Holdings 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.
High cash cycle compare to competitors
Mitsubishi Chemical Holdings Corp has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Mitsubishi Chemical Holdings Corp 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 Chemical Manufacturing industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Mitsubishi Chemical Holdings Corp, it seems that company is thinking out the frontier risks that can impact Chemical Manufacturing 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.
Need for greater diversity
– Mitsubishi Chemical Holdings 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.
Interest costs
– Compare to the competition, Mitsubishi Chemical Holdings 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.
Low market penetration in new markets
– Outside its home market of Japan, Mitsubishi Chemical Holdings Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Mitsubishi Chemical Holdings Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mitsubishi Chemical Holdings Corp are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp to hire the very best people irrespective of their geographical location.
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 Mitsubishi Chemical Holdings 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.
Better consumer reach
– The expansion of the 5G network will help Mitsubishi Chemical Holdings Corp to increase its market reach. Mitsubishi Chemical Holdings 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.
Manufacturing automation
– Mitsubishi Chemical Holdings Corp can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mitsubishi Chemical Holdings Corp is facing challenges because of the dominance of functional experts in the organization. Mitsubishi Chemical Holdings Corp can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Mitsubishi Chemical Holdings 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.
Building a culture of innovation
– managers at Mitsubishi Chemical Holdings 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 Chemical Manufacturing industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mitsubishi Chemical Holdings Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Mitsubishi Chemical Holdings Corp has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Mitsubishi Chemical Holdings Corp to build a more holistic ecosystem for Mitsubishi Chemical Holdings Corp products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mitsubishi Chemical Holdings 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 Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mitsubishi Chemical Holdings Corp in the Chemical Manufacturing industry. Now Mitsubishi Chemical Holdings Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mitsubishi Chemical Holdings 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. Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mitsubishi Chemical Holdings Corp are -
Technology acceleration in Forth Industrial Revolution
– Mitsubishi Chemical Holdings Corp has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Mitsubishi Chemical Holdings Corp needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
Environmental challenges
– Mitsubishi Chemical Holdings 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. Mitsubishi Chemical Holdings Corp can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
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. Mitsubishi Chemical Holdings 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.
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.
Shortening product life cycle
– it is one of the major threat that Mitsubishi Chemical Holdings Corp is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mitsubishi Chemical Holdings Corp in Chemical Manufacturing industry. The Chemical Manufacturing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mitsubishi Chemical Holdings Corp needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
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.
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 Mitsubishi Chemical Holdings Corp business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Mitsubishi Chemical Holdings 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 Chemical Manufacturing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Mitsubishi Chemical Holdings 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 Chemical Manufacturing sector.
Increasing wage structure of Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings 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 Mitsubishi Chemical Holdings Corp needs to make to build a sustainable competitive advantage.