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Nichiryoku (7578) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nichiryoku (Japan)


Based on various researches at Oak Spring University , Nichiryoku is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, wage bills are increasing, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, technology disruption, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc



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Introduction to SWOT Analysis of Nichiryoku


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




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

The strengths of Nichiryoku are -

Organizational Resilience of Nichiryoku

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

Effective Research and Development (R&D)

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

Sustainable margins compare to other players in Personal Services industry

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

Innovation driven organization

– Nichiryoku is one of the most innovative firm in Personal Services sector.

Highly skilled collaborators

– Nichiryoku has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Nichiryoku have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Nichiryoku is present in almost all the verticals within the Personal Services industry. This has provided Nichiryoku 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.

Learning organization

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

Analytics focus

– Nichiryoku 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 Personal 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.

High brand equity

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

Successful track record of launching new products

– Nichiryoku has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nichiryoku 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 Personal Services industry

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

Superior customer experience

– The customer experience strategy of Nichiryoku in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.



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Net Promoter Score



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

The weaknesses of Nichiryoku are -

Need for greater diversity

– Nichiryoku 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.

Slow decision making process

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

Capital Spending Reduction

– Even during the low interest decade, Nichiryoku 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 Personal Services industry using digital technology.

High dependence on Nichiryoku ‘s star products

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

Lack of clear differentiation of Nichiryoku products

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

Products dominated business model

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

Compensation and incentives

– The revenue per employee of Nichiryoku is just above the Personal 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.

Slow to harness new channels of communication

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

High bargaining power of channel partners in Personal Services industry

– because of the regulatory requirements in Japan, Nichiryoku 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 Personal Services industry.

Ability to respond to the competition

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

No frontier risks strategy

– From the 10K / annual statement of Nichiryoku, it seems that company is thinking out the frontier risks that can impact Personal Services 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.




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


The opportunities of Nichiryoku are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Nichiryoku 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 Personal Services industry, but it has also influenced the consumer preferences. Nichiryoku can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

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

Harnessing reconfiguration of the global supply chains

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

Use of Bitcoin and other crypto currencies for transactions in Personal Services industry

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

Using analytics as competitive advantage

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

Buying journey improvements

– Nichiryoku can improve the customer journey of consumers in the Personal 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.

Leveraging digital technologies

– Nichiryoku 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 Nichiryoku 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.

Better consumer reach

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

Building a culture of innovation

– managers at Nichiryoku 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 Personal Services industry.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Nichiryoku in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services industry, and it will provide faster access to the consumers.

Creating value in data economy

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




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


The threats of Nichiryoku are -

High dependence on third party suppliers

– Nichiryoku 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Nichiryoku in Personal Services industry. The Personal 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.

Technology acceleration in Forth Industrial Revolution

– Nichiryoku has witnessed rapid integration of technology during Covid-19 in the Personal Services industry. As one of the leading players in the industry, Nichiryoku needs to keep up with the evolution of technology in the Personal 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Nichiryoku 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 Nichiryoku prominent markets.

Shortening product life cycle

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

Environmental challenges

– Nichiryoku 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. Nichiryoku can take advantage of this fund but it will also bring new competitors in the Personal Services industry.

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

Easy access to finance

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

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 Personal Services industry are lowering. It can presents Nichiryoku with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.

Stagnating economy with rate increase

– Nichiryoku 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 Personal Services industry.

Learning curve for new practices

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

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 Nichiryoku.




Weighted SWOT Analysis of Nichiryoku Template, Example


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



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