Based on various researches at Oak Spring University , Nippon Coke & Engineering Ltd is operating in a macro-environment that has been destablized by – geopolitical disruptions, wage bills are increasing, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
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.
Effective Research and Development (R&D)
– Nippon Coke & Engineering Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Coke & Engineering Ltd staying ahead in the Coal industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Nippon Coke & Engineering Ltd 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.
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.
Organizational Resilience of Nippon Coke & Engineering Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nippon Coke & Engineering Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Nippon Coke & Engineering Ltd 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.
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.
Innovation driven organization
– Nippon Coke & Engineering Ltd is one of the most innovative firm in Coal sector.
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.
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.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nippon Coke & Engineering Ltd is slow explore the new channels of communication. These new channels of communication can help Nippon Coke & Engineering Ltd to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Skills based hiring in Coal industry
– The stress on hiring functional specialists at Nippon Coke & Engineering Ltd 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.
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.
Slow decision making process
– As mentioned earlier in the report, Nippon Coke & Engineering Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. Nippon Coke & Engineering Ltd 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.
Capital Spending Reduction
– Even during the low interest decade, Nippon Coke & Engineering Ltd 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 Coal industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Nippon Coke & Engineering Ltd, in the dynamic environment of Coal industry it has struggled to respond to the nimble upstart competition. Nippon Coke & Engineering Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Interest costs
– Compare to the competition, Nippon Coke & Engineering Ltd 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.
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.
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 -
Creating value in data economy
– The success of analytics program of Nippon Coke & Engineering Ltd has opened avenues for new revenue streams for the organization in Coal industry. This can help Nippon Coke & Engineering Ltd to build a more holistic ecosystem for Nippon Coke & Engineering Ltd products in the Coal industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nippon Coke & Engineering Ltd 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 Nippon Coke & Engineering Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nippon Coke & Engineering Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nippon Coke & Engineering Ltd 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.
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.
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 Nippon Coke & Engineering Ltd 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nippon Coke & Engineering Ltd 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. Nippon Coke & Engineering Ltd 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nippon Coke & Engineering Ltd can use these opportunities to build new business models that can help the communities that Nippon Coke & Engineering Ltd operates in. Secondly it can use opportunities from government spending in Coal sector.
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 -
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.
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. Nippon Coke & Engineering Ltd needs to understand the core reasons impacting the Coal industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nippon Coke & Engineering Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of 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.
Regulatory challenges
– Nippon Coke & Engineering Ltd needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Coal industry regulations.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nippon Coke & Engineering Ltd in Coal industry. The Coal 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.
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 Nippon Coke & Engineering Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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.
Shortening product life cycle
– it is one of the major threat that Nippon Coke & Engineering Ltd is facing in Coal sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
