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 – increasing transportation and logistics costs, wage bills are increasing, increasing energy prices, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Successful track record of launching new products
– Dai-Ichi Cutter Kogyo KK has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dai-Ichi Cutter Kogyo KK 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.
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.
Learning organization
- Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dai-Ichi Cutter Kogyo KK emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Dai-Ichi Cutter Kogyo KK in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Dai-Ichi Cutter Kogyo KK 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.
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.
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.
Innovation driven organization
– Dai-Ichi Cutter Kogyo KK is one of the most innovative firm in Construction Services sector.
High switching costs
– The high switching costs that Dai-Ichi Cutter Kogyo KK 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.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of Japan, Dai-Ichi Cutter Kogyo KK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK lucrative customers.
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.
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in Japan, Dai-Ichi Cutter Kogyo KK 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.
Aligning sales with marketing
– From the outside it seems that Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK can leverage the sales team experience to cultivate customer relationships as Dai-Ichi Cutter Kogyo KK is planning to shift buying processes online.
Interest costs
– Compare to the competition, Dai-Ichi Cutter Kogyo KK 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.
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.
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.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Dai-Ichi Cutter Kogyo KK 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, 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.
No frontier risks strategy
– From the 10K / annual statement of Dai-Ichi Cutter Kogyo KK, it seems that company is thinking out the frontier risks that can impact Construction Services 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.
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 -
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dai-Ichi Cutter Kogyo KK can use these opportunities to build new business models that can help the communities that Dai-Ichi Cutter Kogyo KK operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Buying journey improvements
– Dai-Ichi Cutter Kogyo KK can improve the customer journey of consumers in the Construction Services 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.
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.
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.
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.
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.
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.
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.
Building a culture of innovation
– managers at Dai-Ichi Cutter Kogyo KK 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.
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 -
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 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.
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.
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 Dai-Ichi Cutter Kogyo KK.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dai-Ichi Cutter Kogyo KK 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 Dai-Ichi Cutter Kogyo KK prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Dai-Ichi Cutter Kogyo KK 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.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Dai-Ichi Cutter Kogyo KK is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
