Dai-Ichi Cutter Kogyo KK (1716) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Dai-Ichi Cutter Kogyo KK (Japan)
Based on various researches at Oak Spring University , Dai-Ichi Cutter Kogyo KK is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Dai-Ichi Cutter Kogyo KK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dai-Ichi Cutter Kogyo KK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dai-Ichi Cutter Kogyo KK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK can be done for the following purposes –
1. Strategic planning of Dai-Ichi Cutter Kogyo KK
2. Improving business portfolio management of Dai-Ichi Cutter Kogyo KK
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 Dai-Ichi Cutter Kogyo KK
Strengths of Dai-Ichi Cutter Kogyo KK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dai-Ichi Cutter Kogyo KK are -
Operational resilience
– The operational resilience strategy of Dai-Ichi Cutter Kogyo KK 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.
Diverse revenue streams
– Dai-Ichi Cutter Kogyo KK is present in almost all the verticals within the Construction Services industry. This has provided Dai-Ichi Cutter Kogyo KK a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Dai-Ichi Cutter Kogyo KK 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.
Sustainable margins compare to other players in Construction Services industry
– Dai-Ichi Cutter Kogyo KK has clearly differentiated products in the market place. This has enabled Dai-Ichi Cutter Kogyo KK to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Dai-Ichi Cutter Kogyo KK to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Dai-Ichi Cutter Kogyo KK 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.
Highly skilled collaborators
– Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Dai-Ichi Cutter Kogyo KK 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Dai-Ichi Cutter Kogyo KK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dai-Ichi Cutter Kogyo KK 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.
Ability to lead change in Construction Services
– Dai-Ichi Cutter Kogyo KK is one of the leading players in the Construction Services industry in Japan. Over the years it has not only transformed the business landscape in the Construction Services industry in Japan but also across the existing markets. The ability to lead change has enabled Dai-Ichi Cutter Kogyo KK in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Dai-Ichi Cutter Kogyo KK is one of the most innovative firm in Construction Services sector.
Low bargaining power of suppliers
– Suppliers of Dai-Ichi Cutter Kogyo KK in the Capital Goods sector have low bargaining power. Dai-Ichi Cutter Kogyo KK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dai-Ichi Cutter Kogyo KK to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Construction Services industry
– Dai-Ichi Cutter Kogyo KK is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Dai-Ichi Cutter Kogyo KK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dai-Ichi Cutter Kogyo KK are -
Capital Spending Reduction
– Even during the low interest decade, Dai-Ichi Cutter Kogyo KK 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.
Employees’ less understanding of Dai-Ichi Cutter Kogyo KK strategy
– From the outside it seems that the employees of Dai-Ichi Cutter Kogyo KK 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dai-Ichi Cutter Kogyo KK is slow explore the new channels of communication. These new channels of communication can help Dai-Ichi Cutter Kogyo KK to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Dai-Ichi Cutter Kogyo KK has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Dai-Ichi Cutter Kogyo KK ‘s star products
– The top 2 products and services of Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Dai-Ichi Cutter Kogyo KK is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Dai-Ichi Cutter Kogyo KK has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Dai-Ichi Cutter Kogyo KK 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.
Products dominated business model
– Even though Dai-Ichi Cutter Kogyo KK has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dai-Ichi Cutter Kogyo KK should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Dai-Ichi Cutter Kogyo KK 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.
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 Dai-Ichi Cutter Kogyo KK supply chain. Even after few cautionary changes, Dai-Ichi Cutter Kogyo KK is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dai-Ichi Cutter Kogyo KK vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Dai-Ichi Cutter Kogyo KK 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.
Dai-Ichi Cutter Kogyo KK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dai-Ichi Cutter Kogyo KK are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dai-Ichi Cutter Kogyo KK in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dai-Ichi Cutter Kogyo KK is facing challenges because of the dominance of functional experts in the organization. Dai-Ichi Cutter Kogyo KK can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Dai-Ichi Cutter Kogyo KK to increase its market reach. Dai-Ichi Cutter Kogyo KK 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.
Leveraging digital technologies
– Dai-Ichi Cutter Kogyo KK 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
– Dai-Ichi Cutter Kogyo KK 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.
Learning at scale
– Online learning technologies has now opened space for Dai-Ichi Cutter Kogyo KK 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dai-Ichi Cutter Kogyo KK can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Dai-Ichi Cutter Kogyo KK 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.
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 Dai-Ichi Cutter Kogyo KK in the Construction Services industry. Now Dai-Ichi Cutter Kogyo KK can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Dai-Ichi Cutter Kogyo KK has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Dai-Ichi Cutter Kogyo KK to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dai-Ichi Cutter Kogyo KK to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Dai-Ichi Cutter Kogyo KK can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Dai-Ichi Cutter Kogyo KK 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. Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK to hire the very best people irrespective of their geographical location.
Threats Dai-Ichi Cutter Kogyo KK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dai-Ichi Cutter Kogyo KK are -
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. Dai-Ichi Cutter Kogyo KK needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Environmental challenges
– Dai-Ichi Cutter Kogyo KK 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. Dai-Ichi Cutter Kogyo KK can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
Consumer confidence and its impact on Dai-Ichi Cutter Kogyo KK 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.
High dependence on third party suppliers
– Dai-Ichi Cutter Kogyo KK 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.
Stagnating economy with rate increase
– Dai-Ichi Cutter Kogyo KK 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.
Increasing wage structure of Dai-Ichi Cutter Kogyo KK
– 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 Dai-Ichi Cutter Kogyo KK.
Technology acceleration in Forth Industrial Revolution
– Dai-Ichi Cutter Kogyo KK has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Dai-Ichi Cutter Kogyo KK needs to keep up with the evolution of technology in the Construction Services 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.
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 Dai-Ichi Cutter Kogyo KK business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dai-Ichi Cutter Kogyo KK can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Dai-Ichi Cutter Kogyo KK 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dai-Ichi Cutter Kogyo KK 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.
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 Dai-Ichi Cutter Kogyo KK in the Construction Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Dai-Ichi Cutter Kogyo KK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK needs to make to build a sustainable competitive advantage.