Sanyo Chemical Industries (4471) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sanyo Chemical Industries (Japan)

Based on various researches at Oak Spring University , Sanyo Chemical Industries is operating in a macro-environment that has been destablized by – increasing commodity prices, technology disruption, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Sanyo Chemical Industries

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sanyo Chemical Industries can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sanyo Chemical Industries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sanyo Chemical Industries 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Sanyo Chemical Industries can be done for the following purposes –
1. Strategic planning of Sanyo Chemical Industries
2. Improving business portfolio management of Sanyo Chemical Industries
3. Assessing feasibility of the new initiative in Japan
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sanyo Chemical Industries

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Strengths of Sanyo Chemical Industries | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sanyo Chemical Industries are -

Analytics focus

– Sanyo Chemical Industries is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Chemical Manufacturing industry. The technology infrastructure of Japan is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Diverse revenue streams

– Sanyo Chemical Industries is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Sanyo Chemical Industries 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.

Digital Transformation in Chemical Manufacturing industry

- digital transformation varies from industry to industry. For Sanyo Chemical Industries digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sanyo Chemical Industries 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.

Successful track record of launching new products

– Sanyo Chemical Industries has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sanyo Chemical Industries 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.

Sustainable margins compare to other players in Chemical Manufacturing industry

– Sanyo Chemical Industries has clearly differentiated products in the market place. This has enabled Sanyo Chemical Industries to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Sanyo Chemical Industries to invest into research and development (R&D) and innovation.

Innovation driven organization

– Sanyo Chemical Industries is one of the most innovative firm in Chemical Manufacturing sector.

Learning organization

- Sanyo Chemical Industries 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 Sanyo Chemical Industries is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sanyo Chemical Industries emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Sanyo Chemical Industries in the Basic Materials sector have low bargaining power. Sanyo Chemical Industries has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sanyo Chemical Industries to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Chemical Manufacturing

– Sanyo Chemical Industries is one of the leading players in the Chemical Manufacturing industry in Japan. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in Japan but also across the existing markets. The ability to lead change has enabled Sanyo Chemical Industries in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Cross disciplinary teams

– Horizontal connected teams at the Sanyo Chemical Industries 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.

Training and development

– Sanyo Chemical Industries has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Operational resilience

– The operational resilience strategy of Sanyo Chemical Industries comprises – understanding the underlying the factors in the Chemical Manufacturing 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.

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Weaknesses of Sanyo Chemical Industries | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sanyo Chemical Industries are -

Employees’ less understanding of Sanyo Chemical Industries strategy

– From the outside it seems that the employees of Sanyo Chemical Industries 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.

Aligning sales with marketing

– From the outside it seems that Sanyo Chemical Industries needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemical Manufacturing industry have deep experience in developing customer relationships. Marketing department at Sanyo Chemical Industries can leverage the sales team experience to cultivate customer relationships as Sanyo Chemical Industries is planning to shift buying processes online.

Interest costs

– Compare to the competition, Sanyo Chemical Industries 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.

No frontier risks strategy

– From the 10K / annual statement of Sanyo Chemical Industries, it seems that company is thinking out the frontier risks that can impact Chemical Manufacturing industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

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 Sanyo Chemical Industries supply chain. Even after few cautionary changes, Sanyo Chemical Industries is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sanyo Chemical Industries vulnerable to further global disruptions in South East Asia.

Ability to respond to the competition

– As the decision making is very deliberative at Sanyo Chemical Industries, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Sanyo Chemical Industries has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sanyo Chemical Industries is slow explore the new channels of communication. These new channels of communication can help Sanyo Chemical Industries to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.

High bargaining power of channel partners in Chemical Manufacturing industry

– because of the regulatory requirements in Japan, Sanyo Chemical Industries 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 Chemical Manufacturing industry.

Slow decision making process

– As mentioned earlier in the report, Sanyo Chemical Industries has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Sanyo Chemical Industries 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.

Capital Spending Reduction

– Even during the low interest decade, Sanyo Chemical Industries has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Chemical Manufacturing industry using digital technology.

Skills based hiring in Chemical Manufacturing industry

– The stress on hiring functional specialists at Sanyo Chemical Industries 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.

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Sanyo Chemical Industries Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sanyo Chemical Industries are -

Building a culture of innovation

– managers at Sanyo Chemical Industries can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Chemical Manufacturing industry.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sanyo Chemical Industries 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. Sanyo Chemical Industries 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

– Sanyo Chemical Industries can develop new processes and procedures in Chemical Manufacturing 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Sanyo Chemical Industries can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Using analytics as competitive advantage

– Sanyo Chemical Industries has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Sanyo Chemical Industries to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sanyo Chemical Industries to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Sanyo Chemical Industries is facing challenges because of the dominance of functional experts in the organization. Sanyo Chemical Industries can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Creating value in data economy

– The success of analytics program of Sanyo Chemical Industries has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Sanyo Chemical Industries to build a more holistic ecosystem for Sanyo Chemical Industries products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Sanyo Chemical Industries can improve the customer journey of consumers in the Chemical Manufacturing 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.

Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sanyo Chemical Industries in the Chemical Manufacturing industry. Now Sanyo Chemical Industries can target international markets with far fewer capital restrictions requirements than the existing system.

Leveraging digital technologies

– Sanyo Chemical Industries 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sanyo Chemical Industries can use these opportunities to build new business models that can help the communities that Sanyo Chemical Industries operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.

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 Sanyo Chemical Industries 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sanyo Chemical Industries 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 Sanyo Chemical Industries to hire the very best people irrespective of their geographical location.

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Threats Sanyo Chemical Industries External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sanyo Chemical Industries are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sanyo Chemical Industries in Chemical Manufacturing industry. The Chemical Manufacturing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sanyo Chemical Industries 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 Sanyo Chemical Industries prominent markets.

Environmental challenges

– Sanyo Chemical Industries 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. Sanyo Chemical Industries can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing 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. Sanyo Chemical Industries needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Sanyo Chemical Industries with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.

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 Sanyo Chemical Industries business can come under increasing regulations regarding data privacy, data security, etc.

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. Sanyo Chemical Industries 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.

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 Sanyo Chemical Industries in the Chemical Manufacturing sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Sanyo Chemical Industries is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Sanyo Chemical Industries

– 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 Sanyo Chemical Industries.

Regulatory challenges

– Sanyo Chemical Industries 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 Chemical Manufacturing industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Sanyo Chemical Industries may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.

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Weighted SWOT Analysis of Sanyo Chemical Industries Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sanyo Chemical Industries 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 Sanyo Chemical Industries 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 Sanyo Chemical Industries 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 Sanyo Chemical Industries 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 Sanyo Chemical Industries needs to make to build a sustainable competitive advantage.

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