P.S. Mitsubishi Construction (1871) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for P.S. Mitsubishi Construction (Japan)
Based on various researches at Oak Spring University , P.S. Mitsubishi Construction is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing energy prices, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of P.S. Mitsubishi Construction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that P.S. Mitsubishi Construction can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the P.S. Mitsubishi Construction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction can be done for the following purposes –
1. Strategic planning of P.S. Mitsubishi Construction
2. Improving business portfolio management of P.S. Mitsubishi Construction
3. Assessing feasibility of the new initiative in Japan
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of P.S. Mitsubishi Construction
Strengths of P.S. Mitsubishi Construction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of P.S. Mitsubishi Construction are -
High brand equity
– P.S. Mitsubishi Construction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled P.S. Mitsubishi Construction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the P.S. Mitsubishi Construction 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For P.S. Mitsubishi Construction digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. P.S. Mitsubishi Construction 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 Construction Services industry
– P.S. Mitsubishi Construction is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– P.S. Mitsubishi Construction has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of P.S. Mitsubishi Construction have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– P.S. Mitsubishi Construction has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – P.S. Mitsubishi Construction staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of P.S. Mitsubishi Construction in the Capital Goods sector have low bargaining power. P.S. Mitsubishi Construction has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps P.S. Mitsubishi Construction to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Construction Services industry
– P.S. Mitsubishi Construction has clearly differentiated products in the market place. This has enabled P.S. Mitsubishi Construction to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped P.S. Mitsubishi Construction to invest into research and development (R&D) and innovation.
Training and development
– P.S. Mitsubishi Construction has one of the best training and development program in Capital Goods 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.
Innovation driven organization
– P.S. Mitsubishi Construction is one of the most innovative firm in Construction Services sector.
Learning organization
- P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at P.S. Mitsubishi Construction emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of P.S. Mitsubishi Construction comprises – understanding the underlying the factors in the Construction Services 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.
Weaknesses of P.S. Mitsubishi Construction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of P.S. Mitsubishi Construction are -
Compensation and incentives
– The revenue per employee of P.S. Mitsubishi Construction is just above the Construction Services 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.
Capital Spending Reduction
– Even during the low interest decade, P.S. Mitsubishi Construction 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 Construction Services industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of P.S. Mitsubishi Construction, it seems that company is thinking out the frontier risks that can impact Construction Services 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 P.S. Mitsubishi Construction ‘s star products
– The top 2 products and services of P.S. Mitsubishi Construction still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though P.S. Mitsubishi Construction has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that P.S. Mitsubishi Construction needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at P.S. Mitsubishi Construction can leverage the sales team experience to cultivate customer relationships as P.S. Mitsubishi Construction is planning to shift buying processes online.
Interest costs
– Compare to the competition, P.S. Mitsubishi Construction 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.
Ability to respond to the competition
– As the decision making is very deliberative at P.S. Mitsubishi Construction, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in Japan, P.S. Mitsubishi Construction 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 Construction Services industry.
High cash cycle compare to competitors
P.S. Mitsubishi Construction has a high cash cycle compare to other players in the Construction Services 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, P.S. Mitsubishi Construction needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
P.S. Mitsubishi Construction Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of P.S. Mitsubishi Construction are -
Loyalty marketing
– P.S. Mitsubishi Construction 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.
Manufacturing automation
– P.S. Mitsubishi Construction can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects P.S. Mitsubishi Construction can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– P.S. Mitsubishi Construction can improve the customer journey of consumers in the Construction Services 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of P.S. Mitsubishi Construction has opened avenues for new revenue streams for the organization in Construction Services industry. This can help P.S. Mitsubishi Construction to build a more holistic ecosystem for P.S. Mitsubishi Construction products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help P.S. Mitsubishi Construction to increase its market reach. P.S. Mitsubishi Construction 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.
Learning at scale
– Online learning technologies has now opened space for P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction 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 Construction Services industry.
Developing new processes and practices
– P.S. Mitsubishi Construction can develop new processes and procedures in Construction Services 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, P.S. Mitsubishi Construction 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.
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 P.S. Mitsubishi Construction 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.
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for P.S. Mitsubishi Construction in the Construction Services industry. Now P.S. Mitsubishi Construction can target international markets with far fewer capital restrictions requirements than the existing system.
Threats P.S. Mitsubishi Construction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of P.S. Mitsubishi Construction are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction 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.
High dependence on third party suppliers
– P.S. Mitsubishi Construction 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.
Stagnating economy with rate increase
– P.S. Mitsubishi Construction 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 Construction Services 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. P.S. Mitsubishi Construction needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that P.S. Mitsubishi Construction is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of P.S. Mitsubishi Construction
– 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 P.S. Mitsubishi Construction.
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 P.S. Mitsubishi Construction.
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 P.S. Mitsubishi Construction business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. P.S. Mitsubishi Construction can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for P.S. Mitsubishi Construction in Construction Services industry. The Construction Services 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.
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 P.S. Mitsubishi Construction in the Construction Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of P.S. Mitsubishi Construction Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction 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 P.S. Mitsubishi Construction needs to make to build a sustainable competitive advantage.