Nippon Pallet Pool (4690) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nippon Pallet Pool (Japan)

Based on various researches at Oak Spring University , Nippon Pallet Pool is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, geopolitical disruptions, central banks are concerned over increasing inflation, technology disruption, increasing commodity prices, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Nippon Pallet Pool

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

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Strengths of Nippon Pallet Pool | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nippon Pallet Pool are -

Analytics focus

– Nippon Pallet Pool 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 Rental & Leasing 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.

Sustainable margins compare to other players in Rental & Leasing industry

– Nippon Pallet Pool has clearly differentiated products in the market place. This has enabled Nippon Pallet Pool to fetch slight price premium compare to the competitors in the Rental & Leasing industry. The sustainable margins have also helped Nippon Pallet Pool to invest into research and development (R&D) and innovation.

Successful track record of launching new products

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

Ability to recruit top talent

– Nippon Pallet Pool is one of the leading players in the Rental & Leasing industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.

Organizational Resilience of Nippon Pallet Pool

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

Low bargaining power of suppliers

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

Training and development

– Nippon Pallet Pool 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.

High switching costs

– The high switching costs that Nippon Pallet Pool 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.

Digital Transformation in Rental & Leasing industry

- digital transformation varies from industry to industry. For Nippon Pallet Pool digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nippon Pallet Pool has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Innovation driven organization

– Nippon Pallet Pool is one of the most innovative firm in Rental & Leasing sector.

Effective Research and Development (R&D)

– Nippon Pallet Pool has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Pallet Pool staying ahead in the Rental & Leasing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management in the Rental & Leasing industry

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

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Weaknesses of Nippon Pallet Pool | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nippon Pallet Pool are -

Workers concerns about automation

– As automation is fast increasing in the Rental & Leasing industry, Nippon Pallet Pool 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nippon Pallet Pool is slow explore the new channels of communication. These new channels of communication can help Nippon Pallet Pool to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.

Slow to strategic competitive environment developments

– As Nippon Pallet Pool is one of the leading players in the Rental & Leasing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Rental & Leasing industry in last five years.

Low market penetration in new markets

– Outside its home market of Japan, Nippon Pallet Pool needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Aligning sales with marketing

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

Increasing silos among functional specialists

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

Products dominated business model

– Even though Nippon Pallet Pool has some of the most successful models in the Rental & Leasing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nippon Pallet Pool should strive to include more intangible value offerings along with its core products and services.

Ability to respond to the competition

– As the decision making is very deliberative at Nippon Pallet Pool, in the dynamic environment of Rental & Leasing industry it has struggled to respond to the nimble upstart competition. Nippon Pallet Pool has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Rental & Leasing industry

– The stress on hiring functional specialists at Nippon Pallet Pool has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

No frontier risks strategy

– From the 10K / annual statement of Nippon Pallet Pool, it seems that company is thinking out the frontier risks that can impact Rental & Leasing 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.

Employees’ less understanding of Nippon Pallet Pool strategy

– From the outside it seems that the employees of Nippon Pallet Pool 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.

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Nippon Pallet Pool Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Nippon Pallet Pool are -

Building a culture of innovation

– managers at Nippon Pallet Pool 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 Rental & Leasing industry.

Better consumer reach

– The expansion of the 5G network will help Nippon Pallet Pool to increase its market reach. Nippon Pallet Pool 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.

Creating value in data economy

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

Remote work and new talent hiring opportunities

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

Using analytics as competitive advantage

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Nippon Pallet Pool 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 Pallet Pool 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 Pallet Pool can use these opportunities to build new business models that can help the communities that Nippon Pallet Pool operates in. Secondly it can use opportunities from government spending in Rental & Leasing 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. Nippon Pallet Pool can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Learning at scale

– Online learning technologies has now opened space for Nippon Pallet Pool 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Nippon Pallet Pool in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Rental & Leasing industry, and it will provide faster access to the consumers.

Leveraging digital technologies

– Nippon Pallet Pool can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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 Nippon Pallet Pool 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Nippon Pallet Pool can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Nippon Pallet Pool External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Nippon Pallet Pool are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Rental & Leasing industry are lowering. It can presents Nippon Pallet Pool with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Nippon Pallet Pool 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 Nippon Pallet Pool prominent markets.

Learning curve for new practices

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

Stagnating economy with rate increase

– Nippon Pallet Pool 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 Rental & Leasing industry.

Consumer confidence and its impact on Nippon Pallet Pool 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 Rental & Leasing industry and other sectors.

Easy access to finance

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

Increasing wage structure of Nippon Pallet Pool

– 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 Pallet Pool.

Regulatory challenges

– Nippon Pallet Pool 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 Rental & Leasing industry regulations.

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 Pallet Pool.

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.

Environmental challenges

– Nippon Pallet Pool 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. Nippon Pallet Pool can take advantage of this fund but it will also bring new competitors in the Rental & Leasing industry.

High dependence on third party suppliers

– Nippon Pallet Pool 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.

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Weighted SWOT Analysis of Nippon Pallet Pool Template, Example

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

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