Based on various researches at Oak Spring University , Daiichi Kigenso Kagaku Kogyo is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Daiichi Kigenso Kagaku Kogyo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daiichi Kigenso Kagaku Kogyo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daiichi Kigenso Kagaku Kogyo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo can be done for the following purposes –
1. Strategic planning of Daiichi Kigenso Kagaku Kogyo
2. Improving business portfolio management of Daiichi Kigenso Kagaku Kogyo
3. Assessing feasibility of the new initiative in Japan
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daiichi Kigenso Kagaku Kogyo
Strengths of Daiichi Kigenso Kagaku Kogyo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daiichi Kigenso Kagaku Kogyo are -
Highly skilled collaborators
– Daiichi Kigenso Kagaku Kogyo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemical Manufacturing industry. Secondly the value chain collaborators of Daiichi Kigenso Kagaku Kogyo have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Daiichi Kigenso Kagaku Kogyo has one of the best training and development program in Basic Materials 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.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Daiichi Kigenso Kagaku Kogyo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daiichi Kigenso Kagaku Kogyo 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.
Learning organization
- Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daiichi Kigenso Kagaku Kogyo emphasize – knowledge, initiative, and innovation.
Analytics focus
– Daiichi Kigenso Kagaku Kogyo 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 Chemical Manufacturing 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.
Low bargaining power of suppliers
– Suppliers of Daiichi Kigenso Kagaku Kogyo in the Basic Materials sector have low bargaining power. Daiichi Kigenso Kagaku Kogyo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daiichi Kigenso Kagaku Kogyo to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Daiichi Kigenso Kagaku Kogyo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daiichi Kigenso Kagaku Kogyo staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Daiichi Kigenso Kagaku Kogyo has clearly differentiated products in the market place. This has enabled Daiichi Kigenso Kagaku Kogyo to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Daiichi Kigenso Kagaku Kogyo to invest into research and development (R&D) and innovation.
Organizational Resilience of Daiichi Kigenso Kagaku Kogyo
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daiichi Kigenso Kagaku Kogyo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Daiichi Kigenso Kagaku Kogyo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daiichi Kigenso Kagaku Kogyo 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.
Innovation driven organization
– Daiichi Kigenso Kagaku Kogyo is one of the most innovative firm in Chemical Manufacturing sector.
Operational resilience
– The operational resilience strategy of Daiichi Kigenso Kagaku Kogyo comprises – understanding the underlying the factors in the Chemical Manufacturing industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses of Daiichi Kigenso Kagaku Kogyo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daiichi Kigenso Kagaku Kogyo are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daiichi Kigenso Kagaku Kogyo is slow explore the new channels of communication. These new channels of communication can help Daiichi Kigenso Kagaku Kogyo to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Daiichi Kigenso Kagaku Kogyo has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Chemical Manufacturing industry, Daiichi Kigenso Kagaku Kogyo 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.
Interest costs
– Compare to the competition, Daiichi Kigenso Kagaku Kogyo 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.
Capital Spending Reduction
– Even during the low interest decade, Daiichi Kigenso Kagaku Kogyo 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 Chemical Manufacturing industry using digital technology.
Lack of clear differentiation of Daiichi Kigenso Kagaku Kogyo products
– To increase the profitability and margins on the products, Daiichi Kigenso Kagaku Kogyo needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Japan, Daiichi Kigenso Kagaku Kogyo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Daiichi Kigenso Kagaku Kogyo has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Daiichi Kigenso Kagaku Kogyo lucrative customers.
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 Daiichi Kigenso Kagaku Kogyo supply chain. Even after few cautionary changes, Daiichi Kigenso Kagaku Kogyo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daiichi Kigenso Kagaku Kogyo vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Daiichi Kigenso Kagaku Kogyo, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Daiichi Kigenso Kagaku Kogyo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Daiichi Kigenso Kagaku Kogyo is just above the Chemical Manufacturing 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.
Daiichi Kigenso Kagaku Kogyo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daiichi Kigenso Kagaku Kogyo are -
Using analytics as competitive advantage
– Daiichi Kigenso Kagaku Kogyo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Daiichi Kigenso Kagaku Kogyo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daiichi Kigenso Kagaku Kogyo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Daiichi Kigenso Kagaku Kogyo to increase its market reach. Daiichi Kigenso Kagaku Kogyo 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.
Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daiichi Kigenso Kagaku Kogyo in the Chemical Manufacturing industry. Now Daiichi Kigenso Kagaku Kogyo can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Daiichi Kigenso Kagaku Kogyo has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Daiichi Kigenso Kagaku Kogyo to build a more holistic ecosystem for Daiichi Kigenso Kagaku Kogyo products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Daiichi Kigenso Kagaku Kogyo 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daiichi Kigenso Kagaku Kogyo 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. Daiichi Kigenso Kagaku Kogyo 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.
Developing new processes and practices
– Daiichi Kigenso Kagaku Kogyo can develop new processes and procedures in Chemical Manufacturing 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.
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. Daiichi Kigenso Kagaku Kogyo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Daiichi Kigenso Kagaku Kogyo 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 Chemical Manufacturing industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daiichi Kigenso Kagaku Kogyo can use these opportunities to build new business models that can help the communities that Daiichi Kigenso Kagaku Kogyo operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Daiichi Kigenso Kagaku Kogyo can improve the customer journey of consumers in the Chemical Manufacturing 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.
Threats Daiichi Kigenso Kagaku Kogyo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daiichi Kigenso Kagaku Kogyo are -
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.
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 Daiichi Kigenso Kagaku Kogyo in the Chemical Manufacturing 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. Daiichi Kigenso Kagaku Kogyo 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.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daiichi Kigenso Kagaku Kogyo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Daiichi Kigenso Kagaku Kogyo 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 Chemical Manufacturing industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Daiichi Kigenso Kagaku Kogyo has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Daiichi Kigenso Kagaku Kogyo needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
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.
Shortening product life cycle
– it is one of the major threat that Daiichi Kigenso Kagaku Kogyo is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo prominent markets.
Increasing wage structure of Daiichi Kigenso Kagaku Kogyo
– 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 Daiichi Kigenso Kagaku Kogyo.
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. Daiichi Kigenso Kagaku Kogyo needs to understand the core reasons impacting the Chemical Manufacturing 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, Daiichi Kigenso Kagaku Kogyo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Daiichi Kigenso Kagaku Kogyo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
Weighted SWOT Analysis of Daiichi Kigenso Kagaku Kogyo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo 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 Daiichi Kigenso Kagaku Kogyo needs to make to build a sustainable competitive advantage.