Hokkaido Gas Co Ltd (9534) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hokkaido Gas Co Ltd (Japan)
Based on various researches at Oak Spring University , Hokkaido Gas Co Ltd is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
increasing energy prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hokkaido Gas Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hokkaido Gas Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hokkaido Gas Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hokkaido Gas Co 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 Hokkaido Gas Co Ltd can be done for the following purposes –
1. Strategic planning of Hokkaido Gas Co Ltd
2. Improving business portfolio management of Hokkaido Gas Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Natural Gas Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hokkaido Gas Co Ltd
Strengths of Hokkaido Gas Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hokkaido Gas Co Ltd are -
Training and development
– Hokkaido Gas Co Ltd has one of the best training and development program in Utilities 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.
Cross disciplinary teams
– Horizontal connected teams at the Hokkaido Gas Co 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.
Strong track record of project management in the Natural Gas Utilities industry
– Hokkaido Gas Co 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.
Successful track record of launching new products
– Hokkaido Gas Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hokkaido Gas Co Ltd 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.
Low bargaining power of suppliers
– Suppliers of Hokkaido Gas Co Ltd in the Utilities sector have low bargaining power. Hokkaido Gas Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hokkaido Gas Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Hokkaido Gas Co 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 Hokkaido Gas Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hokkaido Gas Co Ltd emphasize – knowledge, initiative, and innovation.
High brand equity
– Hokkaido Gas Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hokkaido Gas Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Hokkaido Gas Co Ltd comprises – understanding the underlying the factors in the Natural Gas Utilities 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.
Innovation driven organization
– Hokkaido Gas Co Ltd is one of the most innovative firm in Natural Gas Utilities sector.
Superior customer experience
– The customer experience strategy of Hokkaido Gas Co Ltd in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Hokkaido Gas Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Natural Gas Utilities industry. Secondly the value chain collaborators of Hokkaido Gas Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Hokkaido Gas Co Ltd is one of the leading players in the Natural Gas Utilities 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.
Weaknesses of Hokkaido Gas Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hokkaido Gas Co Ltd are -
Ability to respond to the competition
– As the decision making is very deliberative at Hokkaido Gas Co Ltd, in the dynamic environment of Natural Gas Utilities industry it has struggled to respond to the nimble upstart competition. Hokkaido Gas Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Hokkaido Gas Co Ltd products
– To increase the profitability and margins on the products, Hokkaido Gas Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Natural Gas Utilities industry, Hokkaido Gas Co 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.
Increasing silos among functional specialists
– The organizational structure of Hokkaido Gas Co Ltd is dominated by functional specialists. It is not different from other players in the Natural Gas Utilities industry, but Hokkaido Gas Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hokkaido Gas Co Ltd to focus more on services in the Natural Gas Utilities industry rather than just following the product oriented approach.
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 Hokkaido Gas Co Ltd supply chain. Even after few cautionary changes, Hokkaido Gas Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hokkaido Gas Co Ltd vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Japan, Hokkaido Gas Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Hokkaido Gas Co 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 Natural Gas Utilities industry over the last five years. Hokkaido Gas Co 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.
Aligning sales with marketing
– From the outside it seems that Hokkaido Gas Co Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Natural Gas Utilities industry have deep experience in developing customer relationships. Marketing department at Hokkaido Gas Co Ltd can leverage the sales team experience to cultivate customer relationships as Hokkaido Gas Co Ltd is planning to shift buying processes online.
Need for greater diversity
– Hokkaido Gas Co Ltd 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.
Slow to strategic competitive environment developments
– As Hokkaido Gas Co Ltd is one of the leading players in the Natural Gas Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Natural Gas Utilities industry in last five years.
Employees’ less understanding of Hokkaido Gas Co Ltd strategy
– From the outside it seems that the employees of Hokkaido Gas Co Ltd 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.
Hokkaido Gas Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hokkaido Gas Co Ltd are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Natural Gas Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hokkaido Gas Co 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. Hokkaido Gas Co 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.
Better consumer reach
– The expansion of the 5G network will help Hokkaido Gas Co Ltd to increase its market reach. Hokkaido Gas Co 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.
Learning at scale
– Online learning technologies has now opened space for Hokkaido Gas Co 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.
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 Hokkaido Gas Co 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.
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. Hokkaido Gas Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Hokkaido Gas Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Natural Gas Utilities sector. This continuous investment in analytics has enabled Hokkaido Gas Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hokkaido Gas Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hokkaido Gas Co Ltd can use these opportunities to build new business models that can help the communities that Hokkaido Gas Co Ltd operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Creating value in data economy
– The success of analytics program of Hokkaido Gas Co Ltd has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help Hokkaido Gas Co Ltd to build a more holistic ecosystem for Hokkaido Gas Co Ltd products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Hokkaido Gas Co 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 Natural Gas Utilities industry.
Developing new processes and practices
– Hokkaido Gas Co Ltd can develop new processes and procedures in Natural Gas Utilities 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hokkaido Gas Co 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 Natural Gas Utilities industry, and it will provide faster access to the consumers.
Manufacturing automation
– Hokkaido Gas Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Natural Gas Utilities 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.
Loyalty marketing
– Hokkaido Gas Co 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.
Threats Hokkaido Gas Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hokkaido Gas Co Ltd are -
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. Hokkaido Gas Co 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hokkaido Gas Co 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 Hokkaido Gas Co Ltd prominent markets.
Technology acceleration in Forth Industrial Revolution
– Hokkaido Gas Co Ltd has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, Hokkaido Gas Co Ltd needs to keep up with the evolution of technology in the Natural Gas Utilities 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hokkaido Gas Co Ltd in Natural Gas Utilities industry. The Natural Gas Utilities 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.
Consumer confidence and its impact on Hokkaido Gas Co 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 Natural Gas Utilities industry and other sectors.
Environmental challenges
– Hokkaido Gas Co 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. Hokkaido Gas Co Ltd can take advantage of this fund but it will also bring new competitors in the Natural Gas Utilities 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 Hokkaido Gas Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Natural Gas Utilities industry are lowering. It can presents Hokkaido Gas Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Natural Gas Utilities sector.
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. Hokkaido Gas Co Ltd needs to understand the core reasons impacting the Natural Gas Utilities industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Hokkaido Gas Co Ltd is facing in Natural Gas Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hokkaido Gas Co Ltd.
Increasing wage structure of Hokkaido Gas Co 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 Hokkaido Gas Co Ltd.
Weighted SWOT Analysis of Hokkaido Gas Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hokkaido Gas Co 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 Hokkaido Gas Co 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 Hokkaido Gas Co 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 Hokkaido Gas Co 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 Hokkaido Gas Co Ltd needs to make to build a sustainable competitive advantage.
