Based on various researches at Oak Spring University , Nippon Telegraph & Telephone Corp is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, geopolitical disruptions, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Nippon Telegraph & Telephone Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nippon Telegraph & Telephone Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nippon Telegraph & Telephone Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nippon Telegraph & Telephone Corp operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nippon Telegraph & Telephone Corp can be done for the following purposes –
1. Strategic planning of Nippon Telegraph & Telephone Corp
2. Improving business portfolio management of Nippon Telegraph & Telephone Corp
3. Assessing feasibility of the new initiative in United States
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nippon Telegraph & Telephone Corp
Strengths of Nippon Telegraph & Telephone Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nippon Telegraph & Telephone Corp are -
Sustainable margins compare to other players in Communications Services industry
– Nippon Telegraph & Telephone Corp has clearly differentiated products in the market place. This has enabled Nippon Telegraph & Telephone Corp to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Nippon Telegraph & Telephone Corp to invest into research and development (R&D) and innovation.
Training and development
– Nippon Telegraph & Telephone Corp 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.
Cross disciplinary teams
– Horizontal connected teams at the Nippon Telegraph & Telephone Corp 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.
Ability to lead change in Communications Services
– Nippon Telegraph & Telephone Corp is one of the leading players in the Communications Services industry in United States. Over the years it has not only transformed the business landscape in the Communications Services industry in United States but also across the existing markets. The ability to lead change has enabled Nippon Telegraph & Telephone Corp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Nippon Telegraph & Telephone Corp is one of the most innovative firm in Communications Services sector.
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For Nippon Telegraph & Telephone Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nippon Telegraph & Telephone Corp 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.
Low bargaining power of suppliers
– Suppliers of Nippon Telegraph & Telephone Corp in the Services sector have low bargaining power. Nippon Telegraph & Telephone Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nippon Telegraph & Telephone Corp to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Nippon Telegraph & Telephone Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nippon Telegraph & Telephone Corp 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.
Organizational Resilience of Nippon Telegraph & Telephone Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nippon Telegraph & Telephone Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Nippon Telegraph & Telephone Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nippon Telegraph & Telephone Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Communications Services industry
– Nippon Telegraph & Telephone Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Nippon Telegraph & Telephone Corp 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 Nippon Telegraph & Telephone Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nippon Telegraph & Telephone Corp emphasize – knowledge, initiative, and innovation.
Weaknesses of Nippon Telegraph & Telephone Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nippon Telegraph & Telephone Corp are -
Lack of clear differentiation of Nippon Telegraph & Telephone Corp products
– To increase the profitability and margins on the products, Nippon Telegraph & Telephone Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Nippon Telegraph & Telephone Corp has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nippon Telegraph & Telephone Corp should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Communications Services industry
– The stress on hiring functional specialists at Nippon Telegraph & Telephone Corp 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.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, Nippon Telegraph & Telephone Corp needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, Nippon Telegraph & Telephone Corp has high operating costs in the Communications Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nippon Telegraph & Telephone Corp lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, Nippon Telegraph & Telephone Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Nippon Telegraph & Telephone Corp ‘s star products
– The top 2 products and services of Nippon Telegraph & Telephone Corp still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Nippon Telegraph & Telephone Corp has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Nippon Telegraph & Telephone Corp is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Nippon Telegraph & Telephone Corp is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Nippon Telegraph & Telephone Corp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nippon Telegraph & Telephone Corp to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Nippon Telegraph & Telephone Corp 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.
Compensation and incentives
– The revenue per employee of Nippon Telegraph & Telephone Corp is just above the Communications 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.
Nippon Telegraph & Telephone Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nippon Telegraph & Telephone Corp are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nippon Telegraph & Telephone Corp can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nippon Telegraph & Telephone Corp 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.
Building a culture of innovation
– managers at Nippon Telegraph & Telephone Corp 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 Communications Services industry.
Developing new processes and practices
– Nippon Telegraph & Telephone Corp can develop new processes and procedures in Communications 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.
Using analytics as competitive advantage
– Nippon Telegraph & Telephone Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled Nippon Telegraph & Telephone Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nippon Telegraph & Telephone Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Nippon Telegraph & Telephone Corp can use the latest technology developments to improve its manufacturing and designing process in Communications 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.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nippon Telegraph & Telephone Corp in the Communications Services industry. Now Nippon Telegraph & Telephone Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nippon Telegraph & Telephone Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nippon Telegraph & Telephone Corp 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nippon Telegraph & Telephone Corp 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 Telegraph & Telephone Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Telegraph & Telephone Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nippon Telegraph & Telephone Corp is facing challenges because of the dominance of functional experts in the organization. Nippon Telegraph & Telephone Corp can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Nippon Telegraph & Telephone Corp to increase its market reach. Nippon Telegraph & Telephone Corp 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.
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 Telegraph & Telephone Corp can use these opportunities to build new business models that can help the communities that Nippon Telegraph & Telephone Corp operates in. Secondly it can use opportunities from government spending in Communications Services sector.
Threats Nippon Telegraph & Telephone Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nippon Telegraph & Telephone Corp are -
Regulatory challenges
– Nippon Telegraph & Telephone Corp 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 Communications Services industry regulations.
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.
High dependence on third party suppliers
– Nippon Telegraph & Telephone Corp 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.
Stagnating economy with rate increase
– Nippon Telegraph & Telephone Corp 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 Communications Services industry.
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 Telegraph & Telephone Corp 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 Telegraph & Telephone Corp prominent markets.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nippon Telegraph & Telephone Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nippon Telegraph & Telephone Corp in Communications Services industry. The Communications 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nippon Telegraph & Telephone Corp business can come under increasing regulations regarding data privacy, data security, etc.
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. Nippon Telegraph & Telephone Corp needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents Nippon Telegraph & Telephone Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.
Consumer confidence and its impact on Nippon Telegraph & Telephone Corp 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 Communications Services industry and other sectors.
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 Telegraph & Telephone Corp.
Weighted SWOT Analysis of Nippon Telegraph & Telephone Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nippon Telegraph & Telephone Corp 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 Telegraph & Telephone Corp 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 Telegraph & Telephone Corp 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 Telegraph & Telephone Corp 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 Telegraph & Telephone Corp needs to make to build a sustainable competitive advantage.
