Nankai Tatsumura Construction (1850) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nankai Tatsumura Construction (Japan)

Based on various researches at Oak Spring University , Nankai Tatsumura Construction is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing commodity prices, supply chains are disrupted by pandemic , increasing energy prices, etc

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Introduction to SWOT Analysis of Nankai Tatsumura Construction

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nankai Tatsumura Construction can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nankai Tatsumura Construction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nankai Tatsumura Construction 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Nankai Tatsumura Construction can be done for the following purposes –
1. Strategic planning of Nankai Tatsumura Construction
2. Improving business portfolio management of Nankai Tatsumura Construction
3. Assessing feasibility of the new initiative in Japan
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nankai Tatsumura Construction

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Strengths of Nankai Tatsumura Construction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nankai Tatsumura Construction are -

Training and development

– Nankai Tatsumura Construction has one of the best training and development program in Capital Goods 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.

Analytics focus

– Nankai Tatsumura Construction 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 Construction Services 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 Nankai Tatsumura Construction comprises – understanding the underlying the factors in the Construction Services 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.

Successful track record of launching new products

– Nankai Tatsumura Construction has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nankai Tatsumura Construction 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.

Effective Research and Development (R&D)

– Nankai Tatsumura Construction has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nankai Tatsumura Construction staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

– Nankai Tatsumura Construction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nankai Tatsumura Construction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Nankai Tatsumura Construction has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Nankai Tatsumura Construction have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

– Suppliers of Nankai Tatsumura Construction in the Capital Goods sector have low bargaining power. Nankai Tatsumura Construction has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nankai Tatsumura Construction to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Construction Services industry

- digital transformation varies from industry to industry. For Nankai Tatsumura Construction digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nankai Tatsumura Construction 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.

Strong track record of project management in the Construction Services industry

– Nankai Tatsumura Construction is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Nankai Tatsumura Construction 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.

Ability to recruit top talent

– Nankai Tatsumura Construction is one of the leading players in the Construction Services 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.

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Weaknesses of Nankai Tatsumura Construction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nankai Tatsumura Construction are -

High operating costs

– Compare to the competitors, Nankai Tatsumura Construction has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nankai Tatsumura Construction lucrative customers.

High dependence on Nankai Tatsumura Construction ‘s star products

– The top 2 products and services of Nankai Tatsumura Construction still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Nankai Tatsumura Construction has relatively successful track record of launching new products.

Compensation and incentives

– The revenue per employee of Nankai Tatsumura Construction is just above the Construction Services 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.

High bargaining power of channel partners in Construction Services industry

– because of the regulatory requirements in Japan, Nankai Tatsumura Construction 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 Construction Services industry.

Ability to respond to the competition

– As the decision making is very deliberative at Nankai Tatsumura Construction, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Nankai Tatsumura Construction has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Aligning sales with marketing

– From the outside it seems that Nankai Tatsumura Construction needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Nankai Tatsumura Construction can leverage the sales team experience to cultivate customer relationships as Nankai Tatsumura Construction is planning to shift buying processes online.

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 Nankai Tatsumura Construction supply chain. Even after few cautionary changes, Nankai Tatsumura Construction is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nankai Tatsumura Construction vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the Construction Services industry, Nankai Tatsumura Construction 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.

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at Nankai Tatsumura Construction 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.

Capital Spending Reduction

– Even during the low interest decade, Nankai Tatsumura Construction 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 Construction Services industry using digital technology.

Need for greater diversity

– Nankai Tatsumura Construction 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.

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Nankai Tatsumura Construction Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Nankai Tatsumura Construction are -

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Nankai Tatsumura Construction can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Nankai Tatsumura Construction can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.

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 Nankai Tatsumura Construction 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 Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nankai Tatsumura Construction 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. Nankai Tatsumura Construction 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nankai Tatsumura Construction 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 Nankai Tatsumura Construction to hire the very best people irrespective of their geographical location.

Use of Bitcoin and other crypto currencies for transactions in Construction Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nankai Tatsumura Construction in the Construction Services industry. Now Nankai Tatsumura Construction can target international markets with far fewer capital restrictions requirements than the existing system.

Loyalty marketing

– Nankai Tatsumura Construction 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Nankai Tatsumura Construction 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.

Creating value in data economy

– The success of analytics program of Nankai Tatsumura Construction has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Nankai Tatsumura Construction to build a more holistic ecosystem for Nankai Tatsumura Construction products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Nankai Tatsumura Construction 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 Construction Services industry.

Developing new processes and practices

– Nankai Tatsumura Construction can develop new processes and procedures in Construction Services 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Nankai Tatsumura Construction 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 Nankai Tatsumura Construction to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nankai Tatsumura Construction can use these opportunities to build new business models that can help the communities that Nankai Tatsumura Construction operates in. Secondly it can use opportunities from government spending in Construction Services sector.

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Threats Nankai Tatsumura Construction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Nankai Tatsumura Construction are -

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 Nankai Tatsumura Construction.

Increasing wage structure of Nankai Tatsumura Construction

– 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 Nankai Tatsumura Construction.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Nankai Tatsumura Construction 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 Nankai Tatsumura Construction prominent markets.

Regulatory challenges

– Nankai Tatsumura Construction 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 Construction Services industry regulations.

Consumer confidence and its impact on Nankai Tatsumura Construction 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 Construction Services industry and other sectors.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Nankai Tatsumura Construction in Construction Services industry. The Construction Services 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.

Stagnating economy with rate increase

– Nankai Tatsumura Construction 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 Construction Services industry.

Environmental challenges

– Nankai Tatsumura Construction 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. Nankai Tatsumura Construction can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

High dependence on third party suppliers

– Nankai Tatsumura Construction 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.

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.

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. Nankai Tatsumura Construction needs to understand the core reasons impacting the Construction Services 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, Nankai Tatsumura Construction may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services 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 Nankai Tatsumura Construction business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of Nankai Tatsumura Construction Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nankai Tatsumura Construction 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 Nankai Tatsumura Construction 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 Nankai Tatsumura Construction 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 Nankai Tatsumura Construction 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 Nankai Tatsumura Construction needs to make to build a sustainable competitive advantage.

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