Nihon Shokuhin Kako (2892) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nihon Shokuhin Kako (Japan)

Based on various researches at Oak Spring University , Nihon Shokuhin Kako is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Nihon Shokuhin Kako

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nihon Shokuhin Kako can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nihon Shokuhin Kako, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nihon Shokuhin Kako 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 Nihon Shokuhin Kako can be done for the following purposes –
1. Strategic planning of Nihon Shokuhin Kako
2. Improving business portfolio management of Nihon Shokuhin Kako
3. Assessing feasibility of the new initiative in Japan
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nihon Shokuhin Kako

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Strengths of Nihon Shokuhin Kako | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nihon Shokuhin Kako are -

Successful track record of launching new products

– Nihon Shokuhin Kako has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nihon Shokuhin Kako 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.

Sustainable margins compare to other players in Food Processing industry

– Nihon Shokuhin Kako has clearly differentiated products in the market place. This has enabled Nihon Shokuhin Kako to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Nihon Shokuhin Kako to invest into research and development (R&D) and innovation.

Analytics focus

– Nihon Shokuhin Kako 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 Food Processing 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.

Diverse revenue streams

– Nihon Shokuhin Kako is present in almost all the verticals within the Food Processing industry. This has provided Nihon Shokuhin Kako 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.

Innovation driven organization

– Nihon Shokuhin Kako is one of the most innovative firm in Food Processing sector.

Digital Transformation in Food Processing industry

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

- Nihon Shokuhin Kako 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 Nihon Shokuhin Kako is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nihon Shokuhin Kako emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that Nihon Shokuhin Kako 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.

Effective Research and Development (R&D)

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

Ability to lead change in Food Processing

– Nihon Shokuhin Kako is one of the leading players in the Food Processing industry in Japan. Over the years it has not only transformed the business landscape in the Food Processing industry in Japan but also across the existing markets. The ability to lead change has enabled Nihon Shokuhin Kako in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Low bargaining power of suppliers

– Suppliers of Nihon Shokuhin Kako in the Consumer/Non-Cyclical sector have low bargaining power. Nihon Shokuhin Kako has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nihon Shokuhin Kako to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy of Nihon Shokuhin Kako comprises – understanding the underlying the factors in the Food Processing industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

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Weaknesses of Nihon Shokuhin Kako | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nihon Shokuhin Kako are -

Compensation and incentives

– The revenue per employee of Nihon Shokuhin Kako is just above the Food Processing 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.

Workers concerns about automation

– As automation is fast increasing in the Food Processing industry, Nihon Shokuhin Kako 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.

Lack of clear differentiation of Nihon Shokuhin Kako products

– To increase the profitability and margins on the products, Nihon Shokuhin Kako needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nihon Shokuhin Kako is slow explore the new channels of communication. These new channels of communication can help Nihon Shokuhin Kako to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, Nihon Shokuhin Kako has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nihon Shokuhin Kako lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Nihon Shokuhin Kako has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Nihon Shokuhin Kako 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.

High cash cycle compare to competitors

Nihon Shokuhin Kako has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Capital Spending Reduction

– Even during the low interest decade, Nihon Shokuhin Kako has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Food Processing industry using digital technology.

High bargaining power of channel partners in Food Processing industry

– because of the regulatory requirements in Japan, Nihon Shokuhin Kako is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Food Processing industry.

High dependence on Nihon Shokuhin Kako ‘s star products

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

Slow to strategic competitive environment developments

– As Nihon Shokuhin Kako is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.

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Nihon Shokuhin Kako Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Nihon Shokuhin Kako are -

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. Nihon Shokuhin Kako can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Nihon Shokuhin Kako is facing challenges because of the dominance of functional experts in the organization. Nihon Shokuhin Kako can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Learning at scale

– Online learning technologies has now opened space for Nihon Shokuhin Kako 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.

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 Nihon Shokuhin Kako 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.

Remote work and new talent hiring opportunities

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

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Food Processing industry, but it has also influenced the consumer preferences. Nihon Shokuhin Kako can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nihon Shokuhin Kako 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. Nihon Shokuhin Kako 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Nihon Shokuhin Kako 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

– Nihon Shokuhin Kako can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.

Use of Bitcoin and other crypto currencies for transactions in Food Processing industry

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Nihon Shokuhin Kako 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 Nihon Shokuhin Kako 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, Nihon Shokuhin Kako can use these opportunities to build new business models that can help the communities that Nihon Shokuhin Kako operates in. Secondly it can use opportunities from government spending in Food Processing sector.

Buying journey improvements

– Nihon Shokuhin Kako can improve the customer journey of consumers in the Food Processing industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

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Threats Nihon Shokuhin Kako External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Nihon Shokuhin Kako are -

Technology acceleration in Forth Industrial Revolution

– Nihon Shokuhin Kako has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Nihon Shokuhin Kako needs to keep up with the evolution of technology in the Food Processing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

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 Nihon Shokuhin Kako.

Environmental challenges

– Nihon Shokuhin Kako 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. Nihon Shokuhin Kako can take advantage of this fund but it will also bring new competitors in the Food Processing industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Nihon Shokuhin Kako may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Nihon Shokuhin Kako in Food Processing industry. The Food Processing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Regulatory challenges

– Nihon Shokuhin Kako needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Food Processing industry regulations.

Consumer confidence and its impact on Nihon Shokuhin Kako 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 Food Processing industry and other sectors.

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 Nihon Shokuhin Kako business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Nihon Shokuhin Kako is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Nihon Shokuhin Kako can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Food Processing industry.

Increasing wage structure of Nihon Shokuhin Kako

– 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 Nihon Shokuhin Kako.

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.

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. Nihon Shokuhin Kako needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of Nihon Shokuhin Kako Template, Example

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

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