Chuo Kagaku (7895) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chuo Kagaku (Japan)

Based on various researches at Oak Spring University , Chuo Kagaku is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing energy prices, there is backlash against globalization, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, etc

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Introduction to SWOT Analysis of Chuo Kagaku

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

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Strengths of Chuo Kagaku | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chuo Kagaku are -

Strong track record of project management in the Containers & Packaging industry

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

Ability to lead change in Containers & Packaging

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

Learning organization

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

High switching costs

– The high switching costs that Chuo Kagaku 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.

Cross disciplinary teams

– Horizontal connected teams at the Chuo Kagaku 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.

Superior customer experience

– The customer experience strategy of Chuo Kagaku in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Operational resilience

– The operational resilience strategy of Chuo Kagaku comprises – understanding the underlying the factors in the Containers & Packaging 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

– Chuo Kagaku has one of the best training and development program in Basic Materials 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.

High brand equity

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

Innovation driven organization

– Chuo Kagaku is one of the most innovative firm in Containers & Packaging sector.

Analytics focus

– Chuo Kagaku 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 Containers & Packaging 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.

Successful track record of launching new products

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

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Weaknesses of Chuo Kagaku | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chuo Kagaku are -

Compensation and incentives

– The revenue per employee of Chuo Kagaku is just above the Containers & Packaging 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.

Employees’ less understanding of Chuo Kagaku strategy

– From the outside it seems that the employees of Chuo Kagaku 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, Chuo Kagaku is slow explore the new channels of communication. These new channels of communication can help Chuo Kagaku to provide better information regarding Containers & Packaging products and services. It can also build an online community to further reach out to potential customers.

Interest costs

– Compare to the competition, Chuo Kagaku 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.

High dependence on Chuo Kagaku ‘s star products

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

High operating costs

– Compare to the competitors, Chuo Kagaku has high operating costs in the Containers & Packaging industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chuo Kagaku lucrative customers.

Lack of clear differentiation of Chuo Kagaku products

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

Ability to respond to the competition

– As the decision making is very deliberative at Chuo Kagaku, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Chuo Kagaku 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 Chuo Kagaku supply chain. Even after few cautionary changes, Chuo Kagaku is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chuo Kagaku vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Chuo Kagaku, it seems that company is thinking out the frontier risks that can impact Containers & Packaging 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.

Aligning sales with marketing

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

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Chuo Kagaku Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Chuo Kagaku are -

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

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

Creating value in data economy

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

Harnessing reconfiguration of the global supply chains

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

Learning at scale

– Online learning technologies has now opened space for Chuo Kagaku 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.

Increase in government spending

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

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. Chuo Kagaku can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– Chuo Kagaku has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Containers & Packaging sector. This continuous investment in analytics has enabled Chuo Kagaku to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chuo Kagaku to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chuo Kagaku 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. Chuo Kagaku 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.

Developing new processes and practices

– Chuo Kagaku can develop new processes and procedures in Containers & Packaging 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Chuo Kagaku 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 Chuo Kagaku 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Chuo Kagaku 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.

Finding new ways to collaborate

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

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Threats Chuo Kagaku External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Chuo Kagaku are -

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. Chuo Kagaku 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.

Easy access to finance

– Easy access to finance in Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chuo Kagaku can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Chuo Kagaku needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Chuo Kagaku has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Chuo Kagaku needs to keep up with the evolution of technology in the Containers & Packaging 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.

High dependence on third party suppliers

– Chuo Kagaku high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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 Chuo Kagaku business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Chuo Kagaku

– 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 Chuo Kagaku.

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.

Environmental challenges

– Chuo Kagaku 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. Chuo Kagaku can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Chuo Kagaku in Containers & Packaging industry. The Containers & Packaging 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

– Chuo Kagaku 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 Containers & Packaging industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Chuo Kagaku may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Containers & Packaging sector.

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Weighted SWOT Analysis of Chuo Kagaku Template, Example

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

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