SWOT Analysis / TOWS Matrix for Taiheiyo Cement Corp. (Japan)
Based on various researches at Oak Spring University , Taiheiyo Cement 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, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Taiheiyo Cement Corp.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Taiheiyo Cement Corp. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taiheiyo Cement Corp., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taiheiyo Cement 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 Taiheiyo Cement Corp. can be done for the following purposes –
1. Strategic planning of Taiheiyo Cement Corp.
2. Improving business portfolio management of Taiheiyo Cement Corp.
3. Assessing feasibility of the new initiative in Japan
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Taiheiyo Cement Corp.
Strengths of Taiheiyo Cement Corp. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taiheiyo Cement Corp. are -
Superior customer experience
– The customer experience strategy of Taiheiyo Cement Corp. in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Construction - Raw Materials industry
– Taiheiyo Cement 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.
Training and development
– Taiheiyo Cement Corp. has one of the best training and development program in Capital Goods 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.
Analytics focus
– Taiheiyo Cement 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 Construction - Raw Materials 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.
High switching costs
– The high switching costs that Taiheiyo Cement 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.
Operational resilience
– The operational resilience strategy of Taiheiyo Cement Corp. comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
Innovation driven organization
– Taiheiyo Cement Corp. is one of the most innovative firm in Construction - Raw Materials sector.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Taiheiyo Cement Corp. has clearly differentiated products in the market place. This has enabled Taiheiyo Cement Corp. to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Taiheiyo Cement Corp. to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Taiheiyo Cement Corp. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction - Raw Materials industry. Secondly the value chain collaborators of Taiheiyo Cement Corp. have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Taiheiyo Cement Corp.
– The covid-19 pandemic has put organizational resilience at the centre of everthing Taiheiyo Cement Corp. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Taiheiyo Cement 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 Taiheiyo Cement Corp. is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Taiheiyo Cement Corp. emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Taiheiyo Cement Corp. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Taiheiyo Cement 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.
Weaknesses of Taiheiyo Cement Corp. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taiheiyo Cement Corp. are -
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in Japan, Taiheiyo Cement 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 Construction - Raw Materials industry.
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 Taiheiyo Cement Corp. supply chain. Even after few cautionary changes, Taiheiyo Cement Corp. is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taiheiyo Cement Corp. vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Taiheiyo Cement Corp. needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction - Raw Materials industry have deep experience in developing customer relationships. Marketing department at Taiheiyo Cement Corp. can leverage the sales team experience to cultivate customer relationships as Taiheiyo Cement Corp. is planning to shift buying processes online.
High dependence on Taiheiyo Cement Corp. ‘s star products
– The top 2 products and services of Taiheiyo Cement Corp. still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though Taiheiyo Cement Corp. has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Taiheiyo Cement Corp., it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.
Skills based hiring in Construction - Raw Materials industry
– The stress on hiring functional specialists at Taiheiyo Cement 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.
Increasing silos among functional specialists
– The organizational structure of Taiheiyo Cement Corp. is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Taiheiyo Cement Corp. needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Taiheiyo Cement Corp. to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
Need for greater diversity
– Taiheiyo Cement 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, Taiheiyo Cement 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.
Products dominated business model
– Even though Taiheiyo Cement Corp. has some of the most successful models in the Construction - Raw Materials industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Taiheiyo Cement Corp. should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Taiheiyo Cement 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 Construction - Raw Materials industry over the last five years. Taiheiyo Cement 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.
Taiheiyo Cement Corp. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Taiheiyo Cement Corp. are -
Developing new processes and practices
– Taiheiyo Cement Corp. can develop new processes and procedures in Construction - Raw Materials 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.
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. Taiheiyo Cement Corp. can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Taiheiyo Cement Corp. can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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, Taiheiyo Cement Corp. can use these opportunities to build new business models that can help the communities that Taiheiyo Cement Corp. operates in. Secondly it can use opportunities from government spending in Construction - Raw Materials sector.
Using analytics as competitive advantage
– Taiheiyo Cement Corp. has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Taiheiyo Cement Corp. to build a competitive advantage using analytics. The analytics driven competitive advantage can help Taiheiyo Cement Corp. to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Taiheiyo Cement 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.
Better consumer reach
– The expansion of the 5G network will help Taiheiyo Cement Corp. to increase its market reach. Taiheiyo Cement 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.
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 Taiheiyo Cement 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.
Building a culture of innovation
– managers at Taiheiyo Cement 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 Construction - Raw Materials industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Taiheiyo Cement Corp. can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taiheiyo Cement 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 Taiheiyo Cement 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Taiheiyo Cement 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 Taiheiyo Cement Corp. to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction - Raw Materials industry, but it has also influenced the consumer preferences. Taiheiyo Cement Corp. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Taiheiyo Cement Corp. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Taiheiyo Cement Corp. are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taiheiyo Cement Corp. 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 Taiheiyo Cement Corp. prominent markets.
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.
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. Taiheiyo Cement Corp. needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
Increasing wage structure of Taiheiyo Cement 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 Taiheiyo Cement Corp..
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. Taiheiyo Cement 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Taiheiyo Cement Corp. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
Consumer confidence and its impact on Taiheiyo Cement Corp. 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 Construction - Raw Materials industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Taiheiyo Cement Corp. is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Taiheiyo Cement 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.
Easy access to finance
– Easy access to finance in Construction - Raw Materials industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Taiheiyo Cement Corp. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Taiheiyo Cement Corp..
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.
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 Taiheiyo Cement Corp. business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Taiheiyo Cement Corp. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Taiheiyo Cement 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 Taiheiyo Cement 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 Taiheiyo Cement 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 Taiheiyo Cement 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 Taiheiyo Cement Corp. needs to make to build a sustainable competitive advantage.