SWOT Analysis / TOWS Matrix for Kanto Denka Kogyo (Japan)
Based on various researches at Oak Spring University , Kanto Denka Kogyo is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing energy prices, technology disruption, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing commodity prices,
increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Kanto Denka Kogyo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kanto Denka Kogyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kanto Denka Kogyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kanto Denka Kogyo 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 Kanto Denka Kogyo can be done for the following purposes –
1. Strategic planning of Kanto Denka Kogyo
2. Improving business portfolio management of Kanto Denka Kogyo
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 Kanto Denka Kogyo
Strengths of Kanto Denka Kogyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kanto Denka Kogyo are -
Strong track record of project management in the Chemical Manufacturing industry
– Kanto Denka Kogyo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Kanto Denka Kogyo 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 Kanto Denka Kogyo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kanto Denka Kogyo emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Kanto Denka Kogyo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemical Manufacturing industry. Secondly the value chain collaborators of Kanto Denka Kogyo have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Kanto Denka Kogyo 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.
Analytics focus
– Kanto Denka Kogyo 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.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Kanto Denka Kogyo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kanto Denka Kogyo 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.
Innovation driven organization
– Kanto Denka Kogyo is one of the most innovative firm in Chemical Manufacturing sector.
High switching costs
– The high switching costs that Kanto Denka Kogyo 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.
Low bargaining power of suppliers
– Suppliers of Kanto Denka Kogyo in the Basic Materials sector have low bargaining power. Kanto Denka Kogyo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kanto Denka Kogyo to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Kanto Denka Kogyo is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Kanto Denka Kogyo 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
– Kanto Denka Kogyo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kanto Denka Kogyo 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.
Effective Research and Development (R&D)
– Kanto Denka Kogyo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kanto Denka Kogyo staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Kanto Denka Kogyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kanto Denka Kogyo are -
Increasing silos among functional specialists
– The organizational structure of Kanto Denka Kogyo is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Kanto Denka Kogyo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kanto Denka Kogyo to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Kanto Denka Kogyo 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.
Ability to respond to the competition
– As the decision making is very deliberative at Kanto Denka Kogyo, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Kanto Denka Kogyo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Kanto Denka Kogyo 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kanto Denka Kogyo is slow explore the new channels of communication. These new channels of communication can help Kanto Denka Kogyo 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 operating costs
– Compare to the competitors, Kanto Denka Kogyo 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 Kanto Denka Kogyo lucrative customers.
Employees’ less understanding of Kanto Denka Kogyo strategy
– From the outside it seems that the employees of Kanto Denka Kogyo 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.
Lack of clear differentiation of Kanto Denka Kogyo products
– To increase the profitability and margins on the products, Kanto Denka Kogyo needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Kanto Denka Kogyo 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.
Products dominated business model
– Even though Kanto Denka Kogyo 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. Kanto Denka Kogyo should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Kanto Denka Kogyo 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. Kanto Denka Kogyo 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.
Kanto Denka Kogyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kanto Denka Kogyo are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kanto Denka Kogyo 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 Kanto Denka Kogyo to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Kanto Denka Kogyo 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kanto Denka Kogyo is facing challenges because of the dominance of functional experts in the organization. Kanto Denka Kogyo 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.
Learning at scale
– Online learning technologies has now opened space for Kanto Denka Kogyo 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.
Building a culture of innovation
– managers at Kanto Denka Kogyo 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.
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 Kanto Denka Kogyo in the Chemical Manufacturing industry. Now Kanto Denka Kogyo can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Kanto Denka Kogyo 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.
Leveraging digital technologies
– Kanto Denka Kogyo 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.
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. Kanto Denka Kogyo 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. Kanto Denka Kogyo 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.
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. Kanto Denka Kogyo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Kanto Denka Kogyo can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Kanto Denka Kogyo 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 Kanto Denka Kogyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kanto Denka Kogyo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Kanto Denka Kogyo has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Kanto Denka Kogyo to build a more holistic ecosystem for Kanto Denka Kogyo products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Kanto Denka Kogyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kanto Denka Kogyo are -
Increasing wage structure of Kanto Denka Kogyo
– 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 Kanto Denka Kogyo.
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.
Environmental challenges
– Kanto Denka Kogyo 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. Kanto Denka Kogyo can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
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 Kanto Denka Kogyo business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kanto Denka Kogyo 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.
Stagnating economy with rate increase
– Kanto Denka Kogyo 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 Chemical Manufacturing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kanto Denka Kogyo 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 Kanto Denka Kogyo prominent markets.
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 Kanto Denka Kogyo in the Chemical Manufacturing sector and impact the bottomline of the organization.
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. Kanto Denka Kogyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kanto Denka Kogyo 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.
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 Kanto Denka Kogyo.
Consumer confidence and its impact on Kanto Denka Kogyo 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.
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. Kanto Denka Kogyo 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.
Weighted SWOT Analysis of Kanto Denka Kogyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kanto Denka Kogyo 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 Kanto Denka Kogyo 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 Kanto Denka Kogyo 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 Kanto Denka Kogyo 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 Kanto Denka Kogyo needs to make to build a sustainable competitive advantage.
