SWOT Analysis / TOWS Matrix for Nishi Nippon Railroad (Japan)
Based on various researches at Oak Spring University , Nishi Nippon Railroad is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
technology disruption, wage bills are increasing, etc
Introduction to SWOT Analysis of Nishi Nippon Railroad
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nishi Nippon Railroad can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nishi Nippon Railroad, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nishi Nippon Railroad 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 Nishi Nippon Railroad can be done for the following purposes –
1. Strategic planning of Nishi Nippon Railroad
2. Improving business portfolio management of Nishi Nippon Railroad
3. Assessing feasibility of the new initiative in Japan
4. Making a Railroads sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nishi Nippon Railroad
Strengths of Nishi Nippon Railroad | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nishi Nippon Railroad are -
Ability to lead change in Railroads
– Nishi Nippon Railroad is one of the leading players in the Railroads industry in Japan. Over the years it has not only transformed the business landscape in the Railroads industry in Japan but also across the existing markets. The ability to lead change has enabled Nishi Nippon Railroad in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Nishi Nippon Railroad has one of the best training and development program in Transportation 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.
Successful track record of launching new products
– Nishi Nippon Railroad has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nishi Nippon Railroad 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.
Low bargaining power of suppliers
– Suppliers of Nishi Nippon Railroad in the Transportation sector have low bargaining power. Nishi Nippon Railroad has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nishi Nippon Railroad to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Nishi Nippon Railroad 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.
Effective Research and Development (R&D)
– Nishi Nippon Railroad has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nishi Nippon Railroad staying ahead in the Railroads industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Nishi Nippon Railroad is one of the most innovative firm in Railroads sector.
Strong track record of project management in the Railroads industry
– Nishi Nippon Railroad is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Nishi Nippon Railroad
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nishi Nippon Railroad does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Nishi Nippon Railroad is present in almost all the verticals within the Railroads industry. This has provided Nishi Nippon Railroad 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
- Nishi Nippon Railroad 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 Nishi Nippon Railroad is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nishi Nippon Railroad emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Nishi Nippon Railroad in Railroads industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Nishi Nippon Railroad | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nishi Nippon Railroad are -
Need for greater diversity
– Nishi Nippon Railroad 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.
No frontier risks strategy
– From the 10K / annual statement of Nishi Nippon Railroad, it seems that company is thinking out the frontier risks that can impact Railroads industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Nishi Nippon Railroad is one of the leading players in the Railroads industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Railroads industry in last five years.
High dependence on Nishi Nippon Railroad ‘s star products
– The top 2 products and services of Nishi Nippon Railroad still accounts for major business revenue. This dependence on star products in Railroads industry has resulted into insufficient focus on developing new products, even though Nishi Nippon Railroad has relatively successful track record of launching new products.
Skills based hiring in Railroads industry
– The stress on hiring functional specialists at Nishi Nippon Railroad 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.
Aligning sales with marketing
– From the outside it seems that Nishi Nippon Railroad needs to have more collaboration between its sales team and marketing team. Sales professionals in the Railroads industry have deep experience in developing customer relationships. Marketing department at Nishi Nippon Railroad can leverage the sales team experience to cultivate customer relationships as Nishi Nippon Railroad is planning to shift buying processes online.
Products dominated business model
– Even though Nishi Nippon Railroad has some of the most successful models in the Railroads industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nishi Nippon Railroad should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Nishi Nippon Railroad 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.
Compensation and incentives
– The revenue per employee of Nishi Nippon Railroad is just above the Railroads 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 bargaining power of channel partners in Railroads industry
– because of the regulatory requirements in Japan, Nishi Nippon Railroad 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 Railroads industry.
Increasing silos among functional specialists
– The organizational structure of Nishi Nippon Railroad is dominated by functional specialists. It is not different from other players in the Railroads industry, but Nishi Nippon Railroad needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nishi Nippon Railroad to focus more on services in the Railroads industry rather than just following the product oriented approach.
Nishi Nippon Railroad Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nishi Nippon Railroad are -
Loyalty marketing
– Nishi Nippon Railroad 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nishi Nippon Railroad 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 Nishi Nippon Railroad 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. Nishi Nippon Railroad can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Nishi Nippon Railroad can improve the customer journey of consumers in the Railroads 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Railroads industry, but it has also influenced the consumer preferences. Nishi Nippon Railroad can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Nishi Nippon Railroad 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 Railroads industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nishi Nippon Railroad can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nishi Nippon Railroad 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.
Better consumer reach
– The expansion of the 5G network will help Nishi Nippon Railroad to increase its market reach. Nishi Nippon Railroad 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nishi Nippon Railroad 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 Nishi Nippon Railroad to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nishi Nippon Railroad can use these opportunities to build new business models that can help the communities that Nishi Nippon Railroad operates in. Secondly it can use opportunities from government spending in Railroads sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Railroads industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nishi Nippon Railroad 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. Nishi Nippon Railroad 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.
Developing new processes and practices
– Nishi Nippon Railroad can develop new processes and procedures in Railroads 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.
Threats Nishi Nippon Railroad External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nishi Nippon Railroad are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nishi Nippon Railroad in Railroads industry. The Railroads 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Railroads industry are lowering. It can presents Nishi Nippon Railroad with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Railroads sector.
Environmental challenges
– Nishi Nippon Railroad 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. Nishi Nippon Railroad can take advantage of this fund but it will also bring new competitors in the Railroads industry.
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. Nishi Nippon Railroad needs to understand the core reasons impacting the Railroads industry. This will help it in building a better workplace.
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 Nishi Nippon Railroad business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Nishi Nippon Railroad
– 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 Nishi Nippon Railroad.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nishi Nippon Railroad may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Railroads sector.
Technology acceleration in Forth Industrial Revolution
– Nishi Nippon Railroad has witnessed rapid integration of technology during Covid-19 in the Railroads industry. As one of the leading players in the industry, Nishi Nippon Railroad needs to keep up with the evolution of technology in the Railroads 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.
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.
Regulatory challenges
– Nishi Nippon Railroad needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Railroads industry regulations.
Stagnating economy with rate increase
– Nishi Nippon Railroad 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 Railroads industry.
Shortening product life cycle
– it is one of the major threat that Nishi Nippon Railroad is facing in Railroads sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Nishi Nippon Railroad Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nishi Nippon Railroad 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 Nishi Nippon Railroad 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 Nishi Nippon Railroad 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 Nishi Nippon Railroad 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 Nishi Nippon Railroad needs to make to build a sustainable competitive advantage.