Nippon Life Insurance SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Nippon Life Insurance managers to do a situational analysis of the firm . It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Nippon Life Insurance is facing in its current business environment.

The Nippon Life Insurance is one of the leading organizatations in its industry. Nippon Life Insurance maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Nippon Life Insurance to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Nippon Life Insurance swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Nippon Life Insurance strengths, and eradicate its weaknesses.

Step by Step Guide to Nippon Life Insurance SWOT Analysis

Strengths of Nippon Life Insurance – Internal Strategic Factors

As one of the leading firms in its industry, Nippon Life Insurance has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Nippon Life Insurance are –

Strong Free Cash Flow – Nippon Life Insurance has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Good Returns on Capital Expenditure – Nippon Life Insurance is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Strong distribution network – Over the years Nippon Life Insurance has built a reliable distribution network that can reach majority of its potential market.
Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Superb Performance in New Markets – Nippon Life Insurance has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Highly skilled workforce through successful training and learning programs. Nippon Life Insurance is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

Weakness of Nippon Life Insurance – Internal Strategic Factors

Weakness are the areas where Nippon Life Insurance can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Nippon Life Insurance has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Nippon Life Insurance needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Nippon Life Insurance

Opportunities for Nippon Life Insurance – External Strategic Factors

The market development will lead to dilution of competitor’s advantage and enable Nippon Life Insurance to increase its competitiveness compare to the other competitors.
The new technology provides an opportunity to Nippon Life Insurance to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Nippon Life Insurance to increase its profitability.
Government green drive also opens an opportunity for procurement of Nippon Life Insurance products by the state as well as federal government contractors.
Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Nippon Life Insurance in other product categories.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Nippon Life Insurance an opportunity to enter a new emerging market.
New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Nippon Life Insurance to drive home its advantage in new technology and gain market share in the new product category.
New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Nippon Life Insurance. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats Nippon Life Insurance Facing - External Strategic Factors

The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Nippon Life Insurance
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Liability laws in different countries are different and Nippon Life Insurance may be exposed to various liability claims given change in policies in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Nippon Life Insurance in those markets.
Imitation of the counterfeit and low quality product is also a threat to Nippon Life Insurance’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Nippon Life Insurance

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Nippon Life Insurance
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Nippon Life Insurance

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Nippon Life Insurance managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Nippon Life Insurance

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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SWOT Worksheet & Template

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References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)