Misawa Homes Chugoku (1728) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Misawa Homes Chugoku (Japan)

Based on various researches at Oak Spring University , Misawa Homes Chugoku is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, technology disruption, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc

---

---

---

---

Introduction to SWOT Analysis of Misawa Homes Chugoku

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Misawa Homes Chugoku can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Misawa Homes Chugoku, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Misawa Homes Chugoku 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 Misawa Homes Chugoku can be done for the following purposes –
1. Strategic planning of Misawa Homes Chugoku
2. Improving business portfolio management of Misawa Homes Chugoku
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 Misawa Homes Chugoku

---

Strengths of Misawa Homes Chugoku | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Misawa Homes Chugoku are -

High brand equity

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

Sustainable margins compare to other players in Construction Services industry

– Misawa Homes Chugoku has clearly differentiated products in the market place. This has enabled Misawa Homes Chugoku to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Misawa Homes Chugoku to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Misawa Homes Chugoku is present in almost all the verticals within the Construction Services industry. This has provided Misawa Homes Chugoku 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.

Digital Transformation in Construction Services industry

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

Organizational Resilience of Misawa Homes Chugoku

– The covid-19 pandemic has put organizational resilience at the centre of everthing Misawa Homes Chugoku does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Training and development

– Misawa Homes Chugoku 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.

Cross disciplinary teams

– Horizontal connected teams at the Misawa Homes Chugoku 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 Misawa Homes Chugoku in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

– Suppliers of Misawa Homes Chugoku in the Capital Goods sector have low bargaining power. Misawa Homes Chugoku has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Misawa Homes Chugoku to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Construction Services

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

Effective Research and Development (R&D)

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

Innovation driven organization

– Misawa Homes Chugoku is one of the most innovative firm in Construction Services sector.

---

---

Weaknesses of Misawa Homes Chugoku | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Misawa Homes Chugoku are -

Capital Spending Reduction

– Even during the low interest decade, Misawa Homes Chugoku 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.

Products dominated business model

– Even though Misawa Homes Chugoku 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. Misawa Homes Chugoku should strive to include more intangible value offerings along with its core products and services.

Slow to strategic competitive environment developments

– As Misawa Homes Chugoku is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.

Lack of clear differentiation of Misawa Homes Chugoku products

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

High cash cycle compare to competitors

Misawa Homes Chugoku has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High bargaining power of channel partners in Construction Services industry

– because of the regulatory requirements in Japan, Misawa Homes Chugoku 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.

Compensation and incentives

– The revenue per employee of Misawa Homes Chugoku 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 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 Misawa Homes Chugoku supply chain. Even after few cautionary changes, Misawa Homes Chugoku is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Misawa Homes Chugoku vulnerable to further global disruptions in South East Asia.

Employees’ less understanding of Misawa Homes Chugoku strategy

– From the outside it seems that the employees of Misawa Homes Chugoku 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.

Increasing silos among functional specialists

– The organizational structure of Misawa Homes Chugoku is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Misawa Homes Chugoku needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Misawa Homes Chugoku to focus more on services in the Construction Services industry rather than just following the product oriented approach.

Slow decision making process

– As mentioned earlier in the report, Misawa Homes Chugoku has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Misawa Homes Chugoku 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.

---

Misawa Homes Chugoku Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Misawa Homes Chugoku are -

Better consumer reach

– The expansion of the 5G network will help Misawa Homes Chugoku to increase its market reach. Misawa Homes Chugoku 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Misawa Homes Chugoku 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.

Creating value in data economy

– The success of analytics program of Misawa Homes Chugoku has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Misawa Homes Chugoku to build a more holistic ecosystem for Misawa Homes Chugoku products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Misawa Homes Chugoku 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. Misawa Homes Chugoku 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

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

Buying journey improvements

– Misawa Homes Chugoku 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.

Learning at scale

– Online learning technologies has now opened space for Misawa Homes Chugoku 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.

Building a culture of innovation

– managers at Misawa Homes Chugoku 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.

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 Misawa Homes Chugoku 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Misawa Homes Chugoku is facing challenges because of the dominance of functional experts in the organization. Misawa Homes Chugoku 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.

Manufacturing automation

– Misawa Homes Chugoku can use the latest technology developments to improve its manufacturing and designing process in Construction 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.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– Misawa Homes Chugoku 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.

---

Threats Misawa Homes Chugoku External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Misawa Homes Chugoku are -

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.

Shortening product life cycle

– it is one of the major threat that Misawa Homes Chugoku is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Misawa Homes Chugoku 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.

Consumer confidence and its impact on Misawa Homes Chugoku 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.

Regulatory challenges

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

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. Misawa Homes Chugoku needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Misawa Homes Chugoku 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.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Misawa Homes Chugoku with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Misawa Homes Chugoku 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 Misawa Homes Chugoku prominent markets.

Technology acceleration in Forth Industrial Revolution

– Misawa Homes Chugoku has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Misawa Homes Chugoku 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.

Environmental challenges

– Misawa Homes Chugoku 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. Misawa Homes Chugoku can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

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. Misawa Homes Chugoku can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

---

Weighted SWOT Analysis of Misawa Homes Chugoku Template, Example

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

--- ---