Based on various researches at Oak Spring University , Nitto Fuji Flour Milling is operating in a macro-environment that has been destablized by – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Nitto Fuji Flour Milling
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nitto Fuji Flour Milling can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nitto Fuji Flour Milling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling can be done for the following purposes –
1. Strategic planning of Nitto Fuji Flour Milling
2. Improving business portfolio management of Nitto Fuji Flour Milling
3. Assessing feasibility of the new initiative in Japan
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nitto Fuji Flour Milling
Strengths of Nitto Fuji Flour Milling | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nitto Fuji Flour Milling are -
Ability to lead change in Food Processing
– Nitto Fuji Flour Milling is one of the leading players in the Food Processing industry in Japan. Over the years it has not only transformed the business landscape in the Food Processing industry in Japan but also across the existing markets. The ability to lead change has enabled Nitto Fuji Flour Milling in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Nitto Fuji Flour Milling 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.
Operational resilience
– The operational resilience strategy of Nitto Fuji Flour Milling comprises – understanding the underlying the factors in the Food Processing 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.
Cross disciplinary teams
– Horizontal connected teams at the Nitto Fuji Flour Milling 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 Food Processing industry
– Nitto Fuji Flour Milling has clearly differentiated products in the market place. This has enabled Nitto Fuji Flour Milling to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Nitto Fuji Flour Milling to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Nitto Fuji Flour Milling is one of the leading players in the Food Processing 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.
Low bargaining power of suppliers
– Suppliers of Nitto Fuji Flour Milling in the Consumer/Non-Cyclical sector have low bargaining power. Nitto Fuji Flour Milling has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nitto Fuji Flour Milling to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Nitto Fuji Flour Milling in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nitto Fuji Flour Milling emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Nitto Fuji Flour Milling has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nitto Fuji Flour Milling staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Nitto Fuji Flour Milling has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nitto Fuji Flour Milling 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Nitto Fuji Flour Milling digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nitto Fuji Flour Milling 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.
Weaknesses of Nitto Fuji Flour Milling | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nitto Fuji Flour Milling are -
Ability to respond to the competition
– As the decision making is very deliberative at Nitto Fuji Flour Milling, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Nitto Fuji Flour Milling has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Nitto Fuji Flour Milling supply chain. Even after few cautionary changes, Nitto Fuji Flour Milling is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nitto Fuji Flour Milling vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Nitto Fuji Flour Milling products
– To increase the profitability and margins on the products, Nitto Fuji Flour Milling needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Nitto Fuji Flour Milling has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nitto Fuji Flour Milling lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Nitto Fuji Flour Milling 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 Food Processing industry using digital technology.
High cash cycle compare to competitors
Nitto Fuji Flour Milling has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– From the 10K / annual statement of Nitto Fuji Flour Milling, it seems that company is thinking out the frontier risks that can impact Food Processing 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 bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in Japan, Nitto Fuji Flour Milling 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 Food Processing industry.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Nitto Fuji Flour Milling 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nitto Fuji Flour Milling is slow explore the new channels of communication. These new channels of communication can help Nitto Fuji Flour Milling to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Japan, Nitto Fuji Flour Milling needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Nitto Fuji Flour Milling Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nitto Fuji Flour Milling are -
Leveraging digital technologies
– Nitto Fuji Flour Milling 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.
Developing new processes and practices
– Nitto Fuji Flour Milling can develop new processes and procedures in Food Processing 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.
Buying journey improvements
– Nitto Fuji Flour Milling can improve the customer journey of consumers in the Food Processing 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.
Building a culture of innovation
– managers at Nitto Fuji Flour Milling 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 Food Processing industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nitto Fuji Flour Milling 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.
Learning at scale
– Online learning technologies has now opened space for Nitto Fuji Flour Milling 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.
Using analytics as competitive advantage
– Nitto Fuji Flour Milling has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Nitto Fuji Flour Milling to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nitto Fuji Flour Milling to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nitto Fuji Flour Milling 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. Nitto Fuji Flour Milling 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.
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. Nitto Fuji Flour Milling can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Nitto Fuji Flour Milling has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Nitto Fuji Flour Milling to build a more holistic ecosystem for Nitto Fuji Flour Milling products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nitto Fuji Flour Milling 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nitto Fuji Flour Milling is facing challenges because of the dominance of functional experts in the organization. Nitto Fuji Flour Milling can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Nitto Fuji Flour Milling External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nitto Fuji Flour Milling are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nitto Fuji Flour Milling may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
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 Nitto Fuji Flour Milling business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Nitto Fuji Flour Milling 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 Food Processing industry regulations.
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.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nitto Fuji Flour Milling can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Nitto Fuji Flour Milling 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. Nitto Fuji Flour Milling can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nitto Fuji Flour Milling in Food Processing industry. The Food Processing 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 Nitto Fuji Flour Milling in the Food Processing sector and impact the bottomline of the organization.
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. Nitto Fuji Flour Milling 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.
Shortening product life cycle
– it is one of the major threat that Nitto Fuji Flour Milling is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Nitto Fuji Flour Milling has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Nitto Fuji Flour Milling needs to keep up with the evolution of technology in the Food Processing 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.
Stagnating economy with rate increase
– Nitto Fuji Flour Milling 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 Food Processing industry.
Weighted SWOT Analysis of Nitto Fuji Flour Milling Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling 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 Nitto Fuji Flour Milling needs to make to build a sustainable competitive advantage.