Fujitsu SWOT and PESTLE Analysis

Strength

1. Market leader in ICT services: Fujitsu is the fifth largest Information Technology services provider in the world, and the biggest in Japan. The Company is also the World’s top10 providers of servers. This Japanese technology behemoth was coroneted the World’s Most Admired Companies‘ for the fifth consecutive year by Fortune in 2017, as well as well as 28th in Interbrand's 2015 "Japan's Best Global Brands". With the presence in over a 100 countries and a workforce of over 140000 people, Fujitsu is a giant in the Information and communication Technology (ICT) industry. The company is also the industry leader in the domestic market with high revenues, generating 2591.5 billion Yen of business from Japan alone which accounted for approximately 66.8% of its revenues in fiscal 2017.

2. High market share in Japan by customer industry: Fujitsu’s IT services markets are spread across a wide industry spectrum. It holds No. 2 position in the Finance (Banking and Securities/ Insurance) domain with approx. 10.9% market share. In all of the following sectors - Manufacturing, Distribution (Retail/ wholesale and Transport), Communication/ Media services, Healthcare services and Public sector, Fujitsu commands an undisputed No. 1 position with 8.9%, 13.5%, 11.7%, 16.4% and 25.1% respectively as per the Company’s 2017 annual report.

3. Intellectual property and R&D: The company holds about 97000 patents as intellectual property globally and has a dedicated R&D center for innovation. The R&D centers, also known as Fujitsu Laboratories, are one of their kinds. The average R&D expenditure is around 230 billion Yen per year. The R&D Expenditure in fiscal 2017 was 158.6 billion Yen. Fujitsu Laboratories is pushing R&D forward with the pivotal focus on Digital Co-creation with customers. It is currently concentrating on eight emerging technologies that will lead the world, viz. AI, Data management systems, ICM (Information and Communication management) in the 5G space, System Engineering, digital security systems, ses computing, new materials/devices and applied innovation research.

4. Diverse product portfolio: The business of Fujitsu is centered on three business segments – Technology Solutions, Ubiquitous Solutions and Device solutions. The technology solutions earns approximately 65.6% of the Group revenue, followed by ubiquitous solutions which earn 21.5% of the pie and the remaining 11.4% is contributed by device solutions.
The Technology solutions segment provides solutions/system integration services focused on information system consulting and integration, front-end technologies (ATMs, POS systems, etc.), System integration (system construction, business applications) and infrastructure services centered on outsourcing services (datacenters, ICT operation/management, SaaS, application operation/management, business process outsourcing, etc.) as well as System Platforms offering products such as servers and storage systems which form the backbone of information systems, along with network products such as mobile phone base stations, optical transmission systems, and other communications infrastructures. Fujitsu has a wide and unique spectrum of offerings here which include sophisticated and highly reliable mainframe and UNIX servers that support the backbone systems of corporations and that are equipped with proprietary CPUs—Fujitsu being one of the few global ICT companies with the technology to manufacture its own processor chips.
Under Uniquitous Solutions, Fujitsu offers PCs of spectacular quality and high added value. Their notebook PCs are manufactured in entirety by Shimane Fujitsu Limited. This Japanese conglomerate also offers lightweight, thin tablet PCs with high-spec, water- and dust-resistant features. Under mobile phones and tablet PCs, Fujitsu offers a variegated lineup of imperial-quality models with advanced functions, including smartphones with cutting-edge, high-speed CPUs, and the Raku-Raku Phone Series with easy-to-read displays, clear-sounding speakers, and intuitive functionality, as well as tablet PCs featuring large, full high-definition screens and large battery capacity.
The device solutions business segment designs and manufactures semiconductors which include ASICs/COT, ASSPs, Semiconductor packages, batteries, structural components (relays, connectors, etc.), optical transceiver modules, printed circuit boards and Ferroelectric RAM (FRAM), with wide-ranging expertise focusing on imaging, wireless, automotive and security applications.

5. Impressive Client Base and ability to have long term customer relations: Varied and wide customer base from different parts of the world gives Fujitsu an edge over its competitors. With a varied spread of products and service, Fujitsu creates strong partnerships with customers across all industries around the world. Fujitsu has collaborated with customers to co-create solutions to find innovative solutions to their business challenges. Some of their noted clients are Kimplas Piping Systems, Nippo, Pete Lion and Sons, AKG Group, ST Works, Virgin Money, San Carlos Clinical Hospital, Fukuoka Financial Group, Inc., INESA (Group) Co., Ltd. The company has invested in building long lasting relationships with customers to earn their trust and value over the years.

Weakness

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Opportunity

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Threat

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Political

1. Susceptible to changes in regulations: The business operations of the Fujitsu Group are wide spread across the globe and are therefore impacted by a variety of changes in regulations, policies, tax laws in all countries where the Group does business. The Group must comply with a variety of government policies, regulations, such as authorizations for business or investment, import/export regulations and restrictions. The changes in policies and regulations can be a strong barrier for promoting the business in certain countries or regions. The Fujitsu Group’s earnings might be affected by increased compliance costs associated with measures by government to make stricter or otherwise revise such policies, laws and regulations.

2. Japan dragged to China and US conflict: There has been increasing concerns about a trade war between China and the U.S. that could hurt both China and US own economies as well as those of their major trading partners, including Japan. This causes an uncertainty and risk in the midst of trade friction with the U.S. as well as China. China is Japan’s biggest trading partner. Almost half of all overseas operations set up by Japanese companies are located in China. However the relationship with the China cannot be substituted for its relationship with US and vice versa. Japan must always make every effort to develop stronger ties with both countries. With a good business opportunity in both the countries it would always be a first option for Japan to maintain good relations with both the countries.

3. EU-Japan Trade agreement: The European Union and Japan have signed one of the world's biggest free trade deals. The deal covers nearly a third of the world's GDP and 600 million people. It removes around 99 percent of the tariffs on Japanese goods to the EU. However it is remaining at around 94 percent for European imports into Japan for now and is expected to rise to 99 percent over the years. Japan hopes to enhance mutual direct investment, face other global risks and trends towards protectionism and enhance the stature of Japanese brands by strengthening ties with the EU.As a result of the deal , Japanese electronics firms will face fewer barriers in Europe. Thus this will create better business opportunities for Fujitsu.

Economic

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Social

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Technological

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Legal

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Environmental

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