Based on various researches at Oak Spring University , Nippon Telegraph & Telephone Corp is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, technology disruption, supply chains are disrupted by pandemic , increasing energy prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, 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 -
Diverse revenue streams
– Nippon Telegraph & Telephone Corp is present in almost all the verticals within the Communications Services industry. This has provided Nippon Telegraph & Telephone Corp 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.
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.
High switching costs
– The high switching costs that Nippon Telegraph & Telephone Corp 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.
Innovation driven organization
– Nippon Telegraph & Telephone Corp is one of the most innovative firm in Communications Services sector.
Analytics focus
– Nippon Telegraph & Telephone Corp 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 Communications Services industry. The technology infrastructure of United States 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.
Operational resilience
– The operational resilience strategy of Nippon Telegraph & Telephone Corp comprises – understanding the underlying the factors in the Communications Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– 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.
Effective Research and Development (R&D)
– Nippon Telegraph & Telephone Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nippon Telegraph & Telephone Corp staying ahead in the Communications Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Highly skilled collaborators
– Nippon Telegraph & Telephone Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Nippon Telegraph & Telephone Corp have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
Need for greater diversity
– Nippon Telegraph & Telephone Corp 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.
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.
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 Nippon Telegraph & Telephone Corp supply chain. Even after few cautionary changes, Nippon Telegraph & Telephone Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nippon Telegraph & Telephone Corp vulnerable to further global disruptions in South East Asia.
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.
Employees’ less understanding of Nippon Telegraph & Telephone Corp strategy
– From the outside it seems that the employees of Nippon Telegraph & Telephone Corp 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.
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.
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.
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.
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.
High bargaining power of channel partners in Communications Services industry
– because of the regulatory requirements in United States, Nippon Telegraph & Telephone Corp 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 Communications Services industry.
No frontier risks strategy
– From the 10K / annual statement of Nippon Telegraph & Telephone Corp, it seems that company is thinking out the frontier risks that can impact Communications 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.
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 -
Learning at scale
– Online learning technologies has now opened space for Nippon Telegraph & Telephone Corp 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.
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.
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.
Loyalty marketing
– Nippon Telegraph & Telephone Corp has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
Creating value in data economy
– The success of analytics program of Nippon Telegraph & Telephone Corp has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Nippon Telegraph & Telephone Corp to build a more holistic ecosystem for Nippon Telegraph & Telephone Corp products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
Buying journey improvements
– Nippon Telegraph & Telephone Corp can improve the customer journey of consumers in the Communications 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.
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.
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.
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.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Nippon Telegraph & Telephone Corp is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nippon Telegraph & Telephone Corp in the Communications Services sector and impact the bottomline of the organization.
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.
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.
Environmental challenges
– Nippon Telegraph & Telephone Corp 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 Telegraph & Telephone Corp can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
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.
Increasing wage structure of Nippon Telegraph & Telephone Corp
– 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 Telegraph & Telephone Corp.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nippon Telegraph & Telephone Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
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.
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.