Nisshin OilliO Group (2602) SWOT Analysis / TOWS Matrix / MBA Resources
Food Processing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Nisshin OilliO Group (Japan)
Based on various researches at Oak Spring University , Nisshin OilliO Group is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, wage bills are increasing, challanges to central banks by blockchain based private currencies, geopolitical disruptions, technology disruption, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Nisshin OilliO Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nisshin OilliO Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nisshin OilliO Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nisshin OilliO Group 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 Nisshin OilliO Group can be done for the following purposes –
1. Strategic planning of Nisshin OilliO Group
2. Improving business portfolio management of Nisshin OilliO Group
3. Assessing feasibility of the new initiative in Japan
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nisshin OilliO Group
Strengths of Nisshin OilliO Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nisshin OilliO Group are -
Ability to lead change in Food Processing
– Nisshin OilliO Group is one of the leading players in the Food Processing industry in Japan. Over the years it has not only transformed the business landscape in the Food Processing industry in Japan but also across the existing markets. The ability to lead change has enabled Nisshin OilliO Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Nisshin OilliO Group is one of the most innovative firm in Food Processing sector.
Diverse revenue streams
– Nisshin OilliO Group is present in almost all the verticals within the Food Processing industry. This has provided Nisshin OilliO Group 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.
Cross disciplinary teams
– Horizontal connected teams at the Nisshin OilliO Group 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.
Effective Research and Development (R&D)
– Nisshin OilliO Group has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nisshin OilliO Group staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Food Processing industry
– Nisshin OilliO Group has clearly differentiated products in the market place. This has enabled Nisshin OilliO Group to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Nisshin OilliO Group to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Nisshin OilliO Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Nisshin OilliO Group have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Nisshin OilliO Group comprises – understanding the underlying the factors in the Food Processing 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.
Low bargaining power of suppliers
– Suppliers of Nisshin OilliO Group in the Consumer/Non-Cyclical sector have low bargaining power. Nisshin OilliO Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nisshin OilliO Group to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Nisshin OilliO Group 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Nisshin OilliO Group digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nisshin OilliO Group 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.
Strong track record of project management in the Food Processing industry
– Nisshin OilliO Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Nisshin OilliO Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nisshin OilliO Group are -
Compensation and incentives
– The revenue per employee of Nisshin OilliO Group is just above the Food Processing 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.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Nisshin OilliO Group needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Japan, Nisshin OilliO Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Nisshin OilliO Group 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 Food Processing industry using digital technology.
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 Nisshin OilliO Group supply chain. Even after few cautionary changes, Nisshin OilliO Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nisshin OilliO Group vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Nisshin OilliO Group, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Nisshin OilliO Group has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Nisshin OilliO Group has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Nisshin OilliO Group 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 dependence on Nisshin OilliO Group ‘s star products
– The top 2 products and services of Nisshin OilliO Group still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Nisshin OilliO Group has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Nisshin OilliO Group is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
Lack of clear differentiation of Nisshin OilliO Group products
– To increase the profitability and margins on the products, Nisshin OilliO Group needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Nisshin OilliO Group has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nisshin OilliO Group should strive to include more intangible value offerings along with its core products and services.
Nisshin OilliO Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nisshin OilliO Group are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nisshin OilliO Group is facing challenges because of the dominance of functional experts in the organization. Nisshin OilliO Group can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Nisshin OilliO Group 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.
Better consumer reach
– The expansion of the 5G network will help Nisshin OilliO Group to increase its market reach. Nisshin OilliO Group 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nisshin OilliO Group 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 Nisshin OilliO Group to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Nisshin OilliO Group 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 Food Processing industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nisshin OilliO Group in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nisshin OilliO Group can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nisshin OilliO Group can use these opportunities to build new business models that can help the communities that Nisshin OilliO Group operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Creating value in data economy
– The success of analytics program of Nisshin OilliO Group has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Nisshin OilliO Group to build a more holistic ecosystem for Nisshin OilliO Group products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Nisshin OilliO Group 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.
Developing new processes and practices
– Nisshin OilliO Group can develop new processes and procedures in Food Processing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nisshin OilliO Group 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.
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nisshin OilliO Group in the Food Processing industry. Now Nisshin OilliO Group can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Nisshin OilliO Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nisshin OilliO Group are -
Technology acceleration in Forth Industrial Revolution
– Nisshin OilliO Group has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Nisshin OilliO Group needs to keep up with the evolution of technology in the Food Processing 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.
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 Nisshin OilliO Group.
Increasing wage structure of Nisshin OilliO Group
– 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 Nisshin OilliO Group.
High dependence on third party suppliers
– Nisshin OilliO Group 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nisshin OilliO Group 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 Nisshin OilliO Group prominent markets.
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 Nisshin OilliO Group business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Nisshin OilliO Group 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. Nisshin OilliO Group can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nisshin OilliO Group in Food Processing industry. The Food Processing 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.
Consumer confidence and its impact on Nisshin OilliO Group 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 Food Processing industry and other sectors.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nisshin OilliO Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nisshin OilliO Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
Stagnating economy with rate increase
– Nisshin OilliO Group 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 Food Processing industry.
Weighted SWOT Analysis of Nisshin OilliO Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nisshin OilliO Group 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 Nisshin OilliO Group 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 Nisshin OilliO Group 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 Nisshin OilliO Group 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 Nisshin OilliO Group needs to make to build a sustainable competitive advantage.