Sakai Chemical Industry (4078) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sakai Chemical Industry (Japan)
Based on various researches at Oak Spring University , Sakai Chemical Industry is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
Introduction to SWOT Analysis of Sakai Chemical Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sakai Chemical Industry can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sakai Chemical Industry, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sakai Chemical Industry 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 Sakai Chemical Industry can be done for the following purposes –
1. Strategic planning of Sakai Chemical Industry
2. Improving business portfolio management of Sakai Chemical Industry
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 Sakai Chemical Industry
Strengths of Sakai Chemical Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sakai Chemical Industry are -
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Sakai Chemical Industry digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sakai Chemical Industry 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.
Training and development
– Sakai Chemical Industry 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.
Ability to recruit top talent
– Sakai Chemical Industry is one of the leading players in the Chemical Manufacturing industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Sakai Chemical Industry 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 Sakai Chemical Industry 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.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Sakai Chemical Industry has clearly differentiated products in the market place. This has enabled Sakai Chemical Industry to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Sakai Chemical Industry to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Sakai Chemical Industry is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Sakai Chemical Industry 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.
Successful track record of launching new products
– Sakai Chemical Industry has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sakai Chemical Industry 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.
Innovation driven organization
– Sakai Chemical Industry is one of the most innovative firm in Chemical Manufacturing sector.
Low bargaining power of suppliers
– Suppliers of Sakai Chemical Industry in the Basic Materials sector have low bargaining power. Sakai Chemical Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sakai Chemical Industry to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Sakai Chemical Industry
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sakai Chemical Industry does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Sakai Chemical Industry in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Sakai Chemical Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sakai Chemical Industry are -
Products dominated business model
– Even though Sakai Chemical Industry has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sakai Chemical Industry should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Sakai Chemical Industry has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Japan, Sakai Chemical Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Sakai Chemical Industry 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.
Aligning sales with marketing
– From the outside it seems that Sakai Chemical Industry 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 Sakai Chemical Industry can leverage the sales team experience to cultivate customer relationships as Sakai Chemical Industry is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Sakai Chemical Industry, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Sakai Chemical Industry has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Sakai Chemical Industry is one of the leading players in the Chemical Manufacturing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Chemical Manufacturing industry in last five years.
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 Sakai Chemical Industry supply chain. Even after few cautionary changes, Sakai Chemical Industry is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sakai Chemical Industry vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Sakai Chemical Industry has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sakai Chemical Industry lucrative customers.
Employees’ less understanding of Sakai Chemical Industry strategy
– From the outside it seems that the employees of Sakai Chemical Industry 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sakai Chemical Industry is slow explore the new channels of communication. These new channels of communication can help Sakai Chemical Industry to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Sakai Chemical Industry Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sakai Chemical Industry are -
Building a culture of innovation
– managers at Sakai Chemical Industry 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.
Creating value in data economy
– The success of analytics program of Sakai Chemical Industry has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Sakai Chemical Industry to build a more holistic ecosystem for Sakai Chemical Industry products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sakai Chemical Industry is facing challenges because of the dominance of functional experts in the organization. Sakai Chemical Industry 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sakai Chemical Industry can use these opportunities to build new business models that can help the communities that Sakai Chemical Industry operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Developing new processes and practices
– Sakai Chemical Industry 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sakai Chemical Industry 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 Sakai Chemical Industry to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sakai Chemical Industry 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sakai Chemical Industry 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, Sakai Chemical Industry 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 Sakai Chemical Industry to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Sakai Chemical Industry can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Sakai Chemical Industry 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. Sakai Chemical Industry 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.
Using analytics as competitive advantage
– Sakai Chemical Industry 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 Sakai Chemical Industry to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sakai Chemical Industry to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Sakai Chemical Industry to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Sakai Chemical Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sakai Chemical Industry are -
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 Sakai Chemical Industry business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Sakai Chemical Industry 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 Chemical Manufacturing industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Sakai Chemical Industry 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 Sakai Chemical Industry
– 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 Sakai Chemical Industry.
Technology acceleration in Forth Industrial Revolution
– Sakai Chemical Industry has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Sakai Chemical Industry needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
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 Sakai Chemical Industry.
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.
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 Sakai Chemical Industry in the Chemical Manufacturing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sakai Chemical Industry 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 Sakai Chemical Industry prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sakai Chemical Industry 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.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sakai Chemical Industry can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Sakai Chemical Industry needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Sakai Chemical Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sakai Chemical Industry 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 Sakai Chemical Industry 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 Sakai Chemical Industry 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 Sakai Chemical Industry 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 Sakai Chemical Industry needs to make to build a sustainable competitive advantage.