Chubu Electric Power Co., Inc. (9502) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chubu Electric Power Co., Inc. (Japan)
Based on various researches at Oak Spring University , Chubu Electric Power Co., Inc. is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Chubu Electric Power Co., Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chubu Electric Power Co., Inc. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chubu Electric Power Co., Inc., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. can be done for the following purposes –
1. Strategic planning of Chubu Electric Power Co., Inc.
2. Improving business portfolio management of Chubu Electric Power Co., Inc.
3. Assessing feasibility of the new initiative in Japan
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chubu Electric Power Co., Inc.
Strengths of Chubu Electric Power Co., Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chubu Electric Power Co., Inc. are -
Organizational Resilience of Chubu Electric Power Co., Inc.
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chubu Electric Power Co., Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Chubu Electric Power Co., Inc. has one of the best training and development program in Utilities industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chubu Electric Power Co., Inc. emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Chubu Electric Power Co., Inc. 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.
Strong track record of project management in the Electric Utilities industry
– Chubu Electric Power Co., Inc. is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Chubu Electric Power Co., Inc. is one of the most innovative firm in Electric Utilities sector.
Superior customer experience
– The customer experience strategy of Chubu Electric Power Co., Inc. in Electric Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Chubu Electric Power Co., Inc. in the Utilities sector have low bargaining power. Chubu Electric Power Co., Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chubu Electric Power Co., Inc. to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Chubu Electric Power Co., Inc. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chubu Electric Power Co., Inc. 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.
Highly skilled collaborators
– Chubu Electric Power Co., Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electric Utilities industry. Secondly the value chain collaborators of Chubu Electric Power Co., Inc. have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Electric Utilities industry
– Chubu Electric Power Co., Inc. has clearly differentiated products in the market place. This has enabled Chubu Electric Power Co., Inc. to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped Chubu Electric Power Co., Inc. to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Chubu Electric Power Co., Inc. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chubu Electric Power Co., Inc. staying ahead in the Electric Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Chubu Electric Power Co., Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chubu Electric Power Co., Inc. are -
Capital Spending Reduction
– Even during the low interest decade, Chubu Electric Power Co., Inc. 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 Electric Utilities industry using digital technology.
Interest costs
– Compare to the competition, Chubu Electric Power Co., Inc. 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.
High cash cycle compare to competitors
Chubu Electric Power Co., Inc. has a high cash cycle compare to other players in the Electric Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in Japan, Chubu Electric Power Co., Inc. 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 Electric Utilities industry.
Skills based hiring in Electric Utilities industry
– The stress on hiring functional specialists at Chubu Electric Power Co., Inc. 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.
Slow decision making process
– As mentioned earlier in the report, Chubu Electric Power Co., Inc. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electric Utilities industry over the last five years. Chubu Electric Power Co., Inc. 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.
Slow to strategic competitive environment developments
– As Chubu Electric Power Co., Inc. is one of the leading players in the Electric Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electric Utilities industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Chubu Electric Power Co., Inc., it seems that company is thinking out the frontier risks that can impact Electric Utilities 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.
Compensation and incentives
– The revenue per employee of Chubu Electric Power Co., Inc. is just above the Electric Utilities 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 dependence on Chubu Electric Power Co., Inc. ‘s star products
– The top 2 products and services of Chubu Electric Power Co., Inc. still accounts for major business revenue. This dependence on star products in Electric Utilities industry has resulted into insufficient focus on developing new products, even though Chubu Electric Power Co., Inc. has relatively successful track record of launching new products.
Employees’ less understanding of Chubu Electric Power Co., Inc. strategy
– From the outside it seems that the employees of Chubu Electric Power Co., Inc. 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.
Chubu Electric Power Co., Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chubu Electric Power Co., Inc. are -
Buying journey improvements
– Chubu Electric Power Co., Inc. can improve the customer journey of consumers in the Electric Utilities 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.
Creating value in data economy
– The success of analytics program of Chubu Electric Power Co., Inc. has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Chubu Electric Power Co., Inc. to build a more holistic ecosystem for Chubu Electric Power Co., Inc. products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chubu Electric Power Co., Inc. can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Chubu Electric Power Co., Inc. can use the latest technology developments to improve its manufacturing and designing process in Electric Utilities 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chubu Electric Power Co., Inc. can use these opportunities to build new business models that can help the communities that Chubu Electric Power Co., Inc. operates in. Secondly it can use opportunities from government spending in Electric Utilities sector.
Loyalty marketing
– Chubu Electric Power Co., Inc. 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.
Building a culture of innovation
– managers at Chubu Electric Power Co., Inc. 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 Electric Utilities industry.
Leveraging digital technologies
– Chubu Electric Power Co., Inc. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chubu Electric Power Co., Inc. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.
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 Chubu Electric Power Co., Inc. 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.
Use of Bitcoin and other crypto currencies for transactions in Electric Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chubu Electric Power Co., Inc. in the Electric Utilities industry. Now Chubu Electric Power Co., Inc. 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, Chubu Electric Power Co., Inc. 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.
Threats Chubu Electric Power Co., Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chubu Electric Power Co., Inc. are -
Consumer confidence and its impact on Chubu Electric Power Co., Inc. 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 Electric Utilities industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chubu Electric Power Co., Inc. may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electric Utilities 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 Chubu Electric Power Co., Inc. in the Electric Utilities sector and impact the bottomline 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 Chubu Electric Power Co., Inc. business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Electric Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chubu Electric Power Co., Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Chubu Electric Power Co., Inc. has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Chubu Electric Power Co., Inc. needs to keep up with the evolution of technology in the Electric Utilities 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.
Increasing wage structure of Chubu Electric Power Co., Inc.
– 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 Chubu Electric Power Co., Inc..
Stagnating economy with rate increase
– Chubu Electric Power Co., Inc. 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 Electric Utilities industry.
High dependence on third party suppliers
– Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. is facing in Electric Utilities 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. Chubu Electric Power Co., Inc. needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chubu Electric Power Co., Inc. in Electric Utilities industry. The Electric Utilities 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.
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.
Weighted SWOT Analysis of Chubu Electric Power Co., Inc. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. 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 Chubu Electric Power Co., Inc. needs to make to build a sustainable competitive advantage.