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Nomura SWOT Analysis / Matrix
Essays, Term Papers & Research Papers
SWOT analysis is a strategic planning tool that can be used by Nomura managers to do a situational analysis of the firm . It is an important technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Nomura is facing in its current business environment.
The Nomura is one of the leading companies in its industry. Nomura maintains its dominant position in market by carefully 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 enables 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 Nomura to develop four types of strategies:
- SO (strengths-opportunities) Strategies
- WO (weaknesses-opportunities) Strategies
- ST (strengths-threats) Strategies
- WT (weaknesses-threats) Strategies
SWOT Matrix Strategies Objective
The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Nomura strengths, and eradicate its weaknesses.
Step by Step Guide to Nomura SWOT Analysis
Strengths of Nomura – Internal Strategic Factors
As one of the leading organizations in its industry, Nomura 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 Nomura are –
- Strong distribution network – Over the years Nomura has built a reliable distribution network that can reach majority of its potential market.
- Strong Brand Portfolio – Over the years Nomura has invested in building a strong brand portfolio. The SWOT analysis of Nomura just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
- Superb Performance in New Markets – Nomura 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.
- Successful track record of developing new products – product innovation.
- Good Returns on Capital Expenditure – Nomura is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
- 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.
- 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 successful at Go To Market strategies for its products.
Weakness of Nomura – Internal Strategic Factors
Weakness are the areas where Nomura can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.
- The profitability ratio and Net Contribution % of Nomura are below the industry average.
- 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. Nomura has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Nomura 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.
- High attrition rate in work force – compare to other organizations in the industry Nomura has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
- 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.
- 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 Nomura
- Investment in Research and Development is below the fastest growing players in the industry. Even though Nomura is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Opportunities for Nomura – External Strategic Factors
- The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Nomura to increase its profitability.
- New trends in the consumer behavior can open up new market for the Nomura . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
- Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Nomura to capture new customers and increase its market share.
- 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 Nomura. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
- The new technology provides an opportunity to Nomura 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.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Nomura an opportunity to enter a new emerging market.
- Government green drive also opens an opportunity for procurement of Nomura products by the state as well as federal government contractors.
- Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Nomura’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
Threats Nomura Facing - External Strategic Factors
- Rising raw material can pose a threat to the Nomura profitability.
- Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Nomura
- The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
- New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
- Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
- Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
- Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
- New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Limitations of SWOT Analysis for Nomura
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 Nomura
- 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 Nomura
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 Nomura 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 Nomura
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.
Example of Weighted SWOT Analysis
You can email us to get an example document of Weighted SWOT analysis.
SWOT Worksheet & Template
If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.
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)
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