The Chugoku Electric Power Inc (9504) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for The Chugoku Electric Power Inc (Japan)
Based on various researches at Oak Spring University , The Chugoku Electric Power Inc is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is backlash against globalization, geopolitical disruptions, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of The Chugoku Electric Power Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that The Chugoku Electric Power Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the The Chugoku Electric Power Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which The Chugoku Electric Power 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 The Chugoku Electric Power Inc can be done for the following purposes –
1. Strategic planning of The Chugoku Electric Power Inc
2. Improving business portfolio management of The Chugoku Electric Power 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 The Chugoku Electric Power Inc
Strengths of The Chugoku Electric Power Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of The Chugoku Electric Power Inc are -
Low bargaining power of suppliers
– Suppliers of The Chugoku Electric Power Inc in the Utilities sector have low bargaining power. The Chugoku Electric Power Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps The Chugoku Electric Power Inc to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– The Chugoku Electric Power Inc is present in almost all the verticals within the Electric Utilities industry. This has provided The Chugoku Electric Power Inc 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.
Learning organization
- The Chugoku Electric Power 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 The Chugoku Electric Power Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at The Chugoku Electric Power Inc emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– The Chugoku Electric Power Inc is one of the most innovative firm in Electric Utilities sector.
Strong track record of project management in the Electric Utilities industry
– The Chugoku Electric Power 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.
Sustainable margins compare to other players in Electric Utilities industry
– The Chugoku Electric Power Inc has clearly differentiated products in the market place. This has enabled The Chugoku Electric Power Inc to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped The Chugoku Electric Power Inc to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the The Chugoku Electric Power Inc 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.
Successful track record of launching new products
– The Chugoku Electric Power Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. The Chugoku Electric Power 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
– The Chugoku Electric Power 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 The Chugoku Electric Power Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of The Chugoku Electric Power Inc comprises – understanding the underlying the factors in the Electric Utilities 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.
Digital Transformation in Electric Utilities industry
- digital transformation varies from industry to industry. For The Chugoku Electric Power Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. The Chugoku Electric Power Inc 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.
High brand equity
– The Chugoku Electric Power Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled The Chugoku Electric Power Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of The Chugoku Electric Power Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Chugoku Electric Power Inc are -
Slow to strategic competitive environment developments
– As The Chugoku Electric Power 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.
Interest costs
– Compare to the competition, The Chugoku Electric Power 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.
Skills based hiring in Electric Utilities industry
– The stress on hiring functional specialists at The Chugoku Electric Power 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.
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 The Chugoku Electric Power Inc supply chain. Even after few cautionary changes, The Chugoku Electric Power Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left The Chugoku Electric Power Inc vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– The Chugoku Electric Power Inc has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– From the outside it seems that The Chugoku Electric Power Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at The Chugoku Electric Power Inc can leverage the sales team experience to cultivate customer relationships as The Chugoku Electric Power Inc is planning to shift buying processes online.
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in Japan, The Chugoku Electric Power 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.
Capital Spending Reduction
– Even during the low interest decade, The Chugoku Electric Power 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.
Slow decision making process
– As mentioned earlier in the report, The Chugoku Electric Power 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. The Chugoku Electric Power 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.
High cash cycle compare to competitors
The Chugoku Electric Power 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.
Lack of clear differentiation of The Chugoku Electric Power Inc products
– To increase the profitability and margins on the products, The Chugoku Electric Power Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
The Chugoku Electric Power Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of The Chugoku Electric Power Inc are -
Learning at scale
– Online learning technologies has now opened space for The Chugoku Electric Power Inc 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.
Creating value in data economy
– The success of analytics program of The Chugoku Electric Power Inc has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help The Chugoku Electric Power Inc to build a more holistic ecosystem for The Chugoku Electric Power Inc products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– The Chugoku Electric Power Inc can develop new processes and procedures in Electric Utilities 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, The Chugoku Electric Power Inc can use these opportunities to build new business models that can help the communities that The Chugoku Electric Power Inc operates in. Secondly it can use opportunities from government spending in Electric Utilities sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for The Chugoku Electric Power 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 The Chugoku Electric Power Inc to hire the very best people irrespective of their geographical location.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. The Chugoku Electric Power Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects The Chugoku Electric Power Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– The Chugoku Electric Power 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.
Buying journey improvements
– The Chugoku Electric Power 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.
Manufacturing automation
– The Chugoku Electric Power 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electric Utilities industry, but it has also influenced the consumer preferences. The Chugoku Electric Power Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, The Chugoku Electric Power Inc 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 The Chugoku Electric Power Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help The Chugoku Electric Power Inc to increase its market reach. The Chugoku Electric Power Inc 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.
Threats The Chugoku Electric Power Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of The Chugoku Electric Power Inc 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. The Chugoku Electric Power Inc 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.
High dependence on third party suppliers
– The Chugoku Electric Power 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.
Technology acceleration in Forth Industrial Revolution
– The Chugoku Electric Power Inc has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, The Chugoku Electric Power 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, The Chugoku Electric Power Inc 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 The Chugoku Electric Power Inc prominent markets.
Stagnating economy with rate increase
– The Chugoku Electric Power 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electric Utilities industry are lowering. It can presents The Chugoku Electric Power Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electric Utilities 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 The Chugoku Electric Power Inc.
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 The Chugoku Electric Power Inc in the Electric Utilities sector and impact the bottomline of the organization.
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. The Chugoku Electric Power 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 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.
Environmental challenges
– The Chugoku Electric Power Inc 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. The Chugoku Electric Power Inc can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.
Increasing wage structure of The Chugoku Electric Power 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 The Chugoku Electric Power Inc.
Weighted SWOT Analysis of The Chugoku Electric Power Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at The Chugoku Electric Power 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 The Chugoku Electric Power 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 The Chugoku Electric Power 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 The Chugoku Electric Power 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 The Chugoku Electric Power Inc needs to make to build a sustainable competitive advantage.