Nippon Dry Chemical (1909) SWOT Analysis / TOWS Matrix / MBA Resources
Security Systems & Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Nippon Dry Chemical (Japan)
Based on various researches at Oak Spring University , Nippon Dry Chemical is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Nippon Dry Chemical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nippon Dry Chemical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nippon Dry Chemical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nippon Dry Chemical 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 Nippon Dry Chemical can be done for the following purposes –
1. Strategic planning of Nippon Dry Chemical
2. Improving business portfolio management of Nippon Dry Chemical
3. Assessing feasibility of the new initiative in Japan
4. Making a Security Systems & Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nippon Dry Chemical
Strengths of Nippon Dry Chemical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nippon Dry Chemical are -
Analytics focus
– Nippon Dry Chemical 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 Security Systems & 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 Nippon Dry Chemical comprises – understanding the underlying the factors in the Security Systems & 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.
Training and development
– Nippon Dry Chemical has one of the best training and development program in Services 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.
Superior customer experience
– The customer experience strategy of Nippon Dry Chemical in Security Systems & Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Nippon Dry Chemical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Dry Chemical staying ahead in the Security Systems & Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Nippon Dry Chemical 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.
Organizational Resilience of Nippon Dry Chemical
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nippon Dry Chemical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Nippon Dry Chemical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nippon Dry Chemical 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.
Strong track record of project management in the Security Systems & Services industry
– Nippon Dry Chemical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Nippon Dry Chemical in the Services sector have low bargaining power. Nippon Dry Chemical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nippon Dry Chemical to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Nippon Dry Chemical is one of the most innovative firm in Security Systems & Services sector.
High switching costs
– The high switching costs that Nippon Dry Chemical 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.
Weaknesses of Nippon Dry Chemical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nippon Dry Chemical are -
Ability to respond to the competition
– As the decision making is very deliberative at Nippon Dry Chemical, in the dynamic environment of Security Systems & Services industry it has struggled to respond to the nimble upstart competition. Nippon Dry Chemical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Nippon Dry Chemical supply chain. Even after few cautionary changes, Nippon Dry Chemical is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nippon Dry Chemical vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nippon Dry Chemical is slow explore the new channels of communication. These new channels of communication can help Nippon Dry Chemical to provide better information regarding Security Systems & Services products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Nippon Dry Chemical strategy
– From the outside it seems that the employees of Nippon Dry Chemical 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.
Workers concerns about automation
– As automation is fast increasing in the Security Systems & Services industry, Nippon Dry Chemical 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 operating costs
– Compare to the competitors, Nippon Dry Chemical has high operating costs in the Security Systems & Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nippon Dry Chemical lucrative customers.
High dependence on Nippon Dry Chemical ‘s star products
– The top 2 products and services of Nippon Dry Chemical still accounts for major business revenue. This dependence on star products in Security Systems & Services industry has resulted into insufficient focus on developing new products, even though Nippon Dry Chemical has relatively successful track record of launching new products.
High bargaining power of channel partners in Security Systems & Services industry
– because of the regulatory requirements in Japan, Nippon Dry Chemical 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 Security Systems & Services industry.
Interest costs
– Compare to the competition, Nippon Dry Chemical 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.
Slow decision making process
– As mentioned earlier in the report, Nippon Dry Chemical has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Security Systems & Services industry over the last five years. Nippon Dry Chemical 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.
Need for greater diversity
– Nippon Dry Chemical 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.
Nippon Dry Chemical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nippon Dry Chemical are -
Use of Bitcoin and other crypto currencies for transactions in Security Systems & Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nippon Dry Chemical in the Security Systems & Services industry. Now Nippon Dry Chemical can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Nippon Dry Chemical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nippon Dry Chemical 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 Nippon Dry Chemical 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, Nippon Dry Chemical can use these opportunities to build new business models that can help the communities that Nippon Dry Chemical operates in. Secondly it can use opportunities from government spending in Security Systems & Services sector.
Developing new processes and practices
– Nippon Dry Chemical can develop new processes and procedures in Security Systems & 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nippon Dry Chemical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nippon Dry Chemical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Nippon Dry Chemical has opened avenues for new revenue streams for the organization in Security Systems & Services industry. This can help Nippon Dry Chemical to build a more holistic ecosystem for Nippon Dry Chemical products in the Security Systems & Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Nippon Dry Chemical can use the latest technology developments to improve its manufacturing and designing process in Security Systems & 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.
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. Nippon Dry Chemical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Security Systems & Services industry, but it has also influenced the consumer preferences. Nippon Dry Chemical 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 Security Systems & Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nippon Dry Chemical 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. Nippon Dry Chemical 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.
Using analytics as competitive advantage
– Nippon Dry Chemical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Security Systems & Services sector. This continuous investment in analytics has enabled Nippon Dry Chemical to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nippon Dry Chemical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Nippon Dry Chemical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nippon Dry Chemical are -
Regulatory challenges
– Nippon Dry Chemical 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 Security Systems & Services industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nippon Dry Chemical will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Nippon Dry Chemical in the Security Systems & Services sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Security Systems & Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nippon Dry Chemical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Nippon Dry Chemical 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.
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 Nippon Dry Chemical business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Nippon Dry Chemical 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 Security Systems & Services industry.
Technology acceleration in Forth Industrial Revolution
– Nippon Dry Chemical has witnessed rapid integration of technology during Covid-19 in the Security Systems & Services industry. As one of the leading players in the industry, Nippon Dry Chemical needs to keep up with the evolution of technology in the Security Systems & 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nippon Dry Chemical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Security Systems & Services sector.
Increasing wage structure of Nippon Dry Chemical
– 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 Nippon Dry Chemical.
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.
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 Nippon Dry Chemical.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nippon Dry Chemical in Security Systems & Services industry. The Security Systems & 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.
Weighted SWOT Analysis of Nippon Dry Chemical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nippon Dry Chemical 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 Nippon Dry Chemical 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 Nippon Dry Chemical 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 Nippon Dry Chemical 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 Nippon Dry Chemical needs to make to build a sustainable competitive advantage.