Based on various researches at Oak Spring University , Nippon Coke & Engineering Ltd is operating in a macro-environment that has been destablized by – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Nippon Coke & Engineering Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nippon Coke & Engineering Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nippon Coke & Engineering Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd can be done for the following purposes –
1. Strategic planning of Nippon Coke & Engineering Ltd
2. Improving business portfolio management of Nippon Coke & Engineering Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nippon Coke & Engineering Ltd
Strengths of Nippon Coke & Engineering Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nippon Coke & Engineering Ltd are -
Operational resilience
– The operational resilience strategy of Nippon Coke & Engineering Ltd comprises – understanding the underlying the factors in the Coal 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.
Analytics focus
– Nippon Coke & Engineering Ltd 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 Coal 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.
Ability to recruit top talent
– Nippon Coke & Engineering Ltd is one of the leading players in the Coal 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.
Highly skilled collaborators
– Nippon Coke & Engineering Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Coal industry. Secondly the value chain collaborators of Nippon Coke & Engineering Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nippon Coke & Engineering Ltd emphasize – knowledge, initiative, and innovation.
Ability to lead change in Coal
– Nippon Coke & Engineering Ltd is one of the leading players in the Coal industry in Japan. Over the years it has not only transformed the business landscape in the Coal industry in Japan but also across the existing markets. The ability to lead change has enabled Nippon Coke & Engineering Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Nippon Coke & Engineering Ltd in Coal industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Coal industry
– Nippon Coke & Engineering Ltd has clearly differentiated products in the market place. This has enabled Nippon Coke & Engineering Ltd to fetch slight price premium compare to the competitors in the Coal industry. The sustainable margins have also helped Nippon Coke & Engineering Ltd to invest into research and development (R&D) and innovation.
Training and development
– Nippon Coke & Engineering Ltd has one of the best training and development program in Energy 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.
Strong track record of project management in the Coal industry
– Nippon Coke & Engineering Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Nippon Coke & Engineering Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nippon Coke & Engineering Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Nippon Coke & Engineering Ltd is present in almost all the verticals within the Coal industry. This has provided Nippon Coke & Engineering Ltd 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.
Weaknesses of Nippon Coke & Engineering Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nippon Coke & Engineering Ltd are -
Products dominated business model
– Even though Nippon Coke & Engineering Ltd has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nippon Coke & Engineering Ltd should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Nippon Coke & Engineering Ltd is dominated by functional specialists. It is not different from other players in the Coal industry, but Nippon Coke & Engineering Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nippon Coke & Engineering Ltd to focus more on services in the Coal industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Nippon Coke & Engineering Ltd is just above the Coal 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.
No frontier risks strategy
– From the 10K / annual statement of Nippon Coke & Engineering Ltd, it seems that company is thinking out the frontier risks that can impact Coal 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 operating costs
– Compare to the competitors, Nippon Coke & Engineering Ltd has high operating costs in the Coal industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nippon Coke & Engineering Ltd lucrative customers.
Aligning sales with marketing
– From the outside it seems that Nippon Coke & Engineering Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Coal industry have deep experience in developing customer relationships. Marketing department at Nippon Coke & Engineering Ltd can leverage the sales team experience to cultivate customer relationships as Nippon Coke & Engineering Ltd is planning to shift buying processes online.
Lack of clear differentiation of Nippon Coke & Engineering Ltd products
– To increase the profitability and margins on the products, Nippon Coke & Engineering Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Nippon Coke & Engineering Ltd ‘s star products
– The top 2 products and services of Nippon Coke & Engineering Ltd still accounts for major business revenue. This dependence on star products in Coal industry has resulted into insufficient focus on developing new products, even though Nippon Coke & Engineering Ltd has relatively successful track record of launching new products.
High bargaining power of channel partners in Coal industry
– because of the regulatory requirements in Japan, Nippon Coke & Engineering Ltd 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 Coal industry.
Workers concerns about automation
– As automation is fast increasing in the Coal industry, Nippon Coke & Engineering Ltd 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.
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 Nippon Coke & Engineering Ltd supply chain. Even after few cautionary changes, Nippon Coke & Engineering Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nippon Coke & Engineering Ltd vulnerable to further global disruptions in South East Asia.
Nippon Coke & Engineering Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nippon Coke & Engineering Ltd are -
Better consumer reach
– The expansion of the 5G network will help Nippon Coke & Engineering Ltd to increase its market reach. Nippon Coke & Engineering Ltd 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.
Developing new processes and practices
– Nippon Coke & Engineering Ltd can develop new processes and procedures in Coal 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.
Loyalty marketing
– Nippon Coke & Engineering Ltd 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nippon Coke & Engineering Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal industry, and it will provide faster access to the consumers.
Manufacturing automation
– Nippon Coke & Engineering Ltd can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Leveraging digital technologies
– Nippon Coke & Engineering Ltd 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.
Building a culture of innovation
– managers at Nippon Coke & Engineering Ltd 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 Coal industry.
Using analytics as competitive advantage
– Nippon Coke & Engineering Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled Nippon Coke & Engineering Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nippon Coke & Engineering Ltd is facing challenges because of the dominance of functional experts in the organization. Nippon Coke & Engineering Ltd can utilize new technology in the field of Coal industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nippon Coke & Engineering Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Coal industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nippon Coke & Engineering Ltd in the Coal industry. Now Nippon Coke & Engineering Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Nippon Coke & Engineering Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nippon Coke & Engineering Ltd are -
Environmental challenges
– Nippon Coke & Engineering Ltd 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. Nippon Coke & Engineering Ltd can take advantage of this fund but it will also bring new competitors in the Coal industry.
Technology acceleration in Forth Industrial Revolution
– Nippon Coke & Engineering Ltd has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, Nippon Coke & Engineering Ltd needs to keep up with the evolution of technology in the Coal 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.
Consumer confidence and its impact on Nippon Coke & Engineering Ltd 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 Coal industry and other sectors.
High dependence on third party suppliers
– Nippon Coke & Engineering Ltd 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 wage structure of Nippon Coke & Engineering Ltd
– 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 Nippon Coke & Engineering Ltd.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd prominent markets.
Easy access to finance
– Easy access to finance in Coal industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nippon Coke & Engineering Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Nippon Coke & Engineering Ltd 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Nippon Coke & Engineering Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
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.
Stagnating economy with rate increase
– Nippon Coke & Engineering Ltd 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 Coal 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.
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 Nippon Coke & Engineering Ltd.
Weighted SWOT Analysis of Nippon Coke & Engineering Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd needs to make to build a sustainable competitive advantage.