COMPANY PROFILE -Nidec Corporation
Business Sector :Manufacturing, Electric Motors
Operating Geography :Japan, Asia, Global
About Nidec Corporation :
Nidec Corporation is a Japanese company that manufactures electric motors. It is headquartered in Minami-Ku, Koyoto, Japan. The company's products include hard-disk drives, electric appliances, automobiles and commercial and manufacturing equipment. The two product groups with the largest sales from Nidec’s stable are hard-disk drive motors and automotive products with 16% and 22% of sales. Nidec is listed on the first section of the Tokyo Stock Exchange and is a constituent of the TOPIX 100 stock market index and is also listed among the Forbes World's Most Innovative Companies list. In July 1973, Shigenobu Nagamori established Nippon Densan Corporation (now Nidec Corporation) in Nishikyo-Ksu, Kyoto. Nidec Group specializes and handles motor application products based on "everything that spins and moves," revolving around a motor business that comprises an expansive product line from small precision to supersized motors. On February 5, 2021, Nidec Group announced that its Board of Directors has approved a resolution to acquire: the shares of Mitsubishi Heavy Industries Machine Tool Co., Ltd. and the completion of the acquisition of the company is expected by May 2021.
Nidec Corporation's Unique Selling Proposition or USP lies in it having the largest global market share for the tiny spindle motors that power hard-disk drives. Nidec Corporation's mission statement reads, "To provide products and services that satisfy our customers on a customer-first basis. - To focus on manufacturing world-leading products on a quality-first basis"
Nidec Corporation Revenue :
JPY 15,34,800 million - FY ending 31st March, 2020
JPY 15,18,320 million - FY ending 31st March, 2019
Competitive Analysis of Nidec Corporation
The SWOT analysis for Nidec Corporation is presented below in a matrix followed by the detailed analysis report:
Strengths | Weaknesses |
1. Nidec Research and Development Center gets the “Green Electricity Certificate System”.
2. Diversified portfolios with multiple subsidiaries.
3. Massive annual production capacity of over 3 billion units
4. Financials of the company have shown consistent growth
| 1. Exposed to key management and succession risk
2. Reliance on third party suppliers for raw materials.
3. Risks related to operations in overseas countries
|
Opportunities | Threats |
1. Supply components and parts to support the growing trend of automation, data explosion, decarbonization.
2. Acquiring shares of Mitsubishi Heavy Industries Machine Tools to support electric vehicle traction units
3. Strong growth opportunity in the electric-motor industry
| 1. Change in demand of HDD drives.
2. Economic downturns in their international markets will negatively impact the revenue.
3. Defective products may lead to significant legal claims and disputes with customers.
4. Risk of leakage of confidential information.
|
Nidec Corporation SWOT and PESTLE Analysis PDF Report is a custom report and will be delivered to your email inbox within 2 business days from purchase.
Detailed SWOT Analysis of Nidec Corporation
Strength
1. Nidec Research and Development Center gets the “Green Electricity Certificate System”:
The Nidec Research and Development Center in Japan became the first of Nidec Group to acquire the “Green Electricity Certificate System” which was provided by Japan Natural Energy Company Limited in August, 2019. Around 450,000 kWh or approximately around a quarter of the power used by NRC(Japan) in a year is generated from renewable sources. Expectations are that the facility’s CO2 emissions will be curbed by around 200 tons per year. Another project called the SMART 2030 project was launched by Nidec in April 2019 to contribute positively towards sustainable growth and a carbon-free society. It will help in limiting the amount of greenhouse gases generated directly from its operations and indirectly after usage of power and heat supplied by other companies by around 30% by financial Year 2030 in comparison to recorded values in FY 2017. This project also includes the adoption of the latest green electricity certificate system along with the implementation of various measures to help in sustenance of a decarbonized society. This will positively impact their image in the global market while contributing positively to prevent climate change.
The remaining section under "Strength"is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threats
1. Change in demand of HDD drives:
The Hard Disk Drive motor business constitutes a significant base of the revenues collected by Nidec Corp. It also has a higher profitability compared to Nidec’s other businesses. However, HDD motor demand is something that is directly affected by the HDD market and in contemporary times, HDD faces strong competition from Solid State Drives or SSDs which is one of the reasons behind the dwindling demand for HDDs. Even though HDDs are much less expensive than SDDs and are used in data servers for storage of big data, many devices that have traditionally used HDDs are switching over to SSDs which offer much faster processing speeds and lower risks of failure. To add to that, SSDs are gradually becoming cheaper. Hence, in future the demand of HDDs in expected to slide further. The cardinal risk to Nidec lies in the fact that the three main HDD manufacturers holding more than 80% of the market share are supplied by Nidec. So, even if one of these customers would change their purchasing trends, Nidec Corp would be directly affected in terms of business, operations and financials.
The remaining section under "Threats"is available only in the 'Complete Report' on purchase.
The PESTLE analysis for Nidec Corporation is presented below in a table followed by the detailed analysis report.
Political | Economical |
1. Talks of free trade agreements with several nations. | 1. US-China trade war affected overall demand negatively.
2. Negative impact on business environment due to COVID-19.
|
Social | Technological |
1. Consumer spending is projected to fall
2. Urbanization and ageing population bringing focus to accident reduction, traffic congestion and reduction of environmental load
| 1. Increase in demand for electric vehicles.
2. Increasing demand for SSD drives in comparison to HDD Drives.
3. Industries shifting towards automation
|
Legal | Environmental |
1. Imitable technology leads to patent infringement lawsuits | 1. Initiatives aiming to be environmentally conscious
2. Adoption of Paris agreement leading to climate change awareness
|
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Detailed Pestle Analysis of Nidec Corporation
Political
This section is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
1. Increase in demand for electric vehicles:
Electric cars sales touches 2.1 million globally in 2019, outracing statistics of 2018 to boost the stock to 7.2 million electric cars. Electric cars accounted for about 2.6% of the global vehicle sales and around 1% of global vehicle stock in 2019. It registered a 40% y-o-y increase. With technical and technological progress in the electrification of two-wheelers and three-wheelers, buses, and trucks progresses and their market grows, electric vehicles are expanding significantly. Wishful policy announcements have played a critical role in giving a jump-start to the electric-vehicle rollout in many major vehicle markets in the recent years. Nidec Corp., which is the world’s top manufacturer/supplier of motors for many products from hard drives to power plants, is sure that it can create a key component for Tesla Inc.’s electric vehicles and make them cheaper and better than that of their competitors. With Japan, California and other major automobile markets making it mandatory for all new car sales to be electric over the next two decades, the global EV traction motor market is projected to reach about $29 billion by 2026, according to the consultancy firm, Shibuya Data Count. Until today, the industry’s focus has been on building capacity to manufacture batteries, while improvising and improving technology to make them much more efficient and expand their range of EVs. Traction motors being the costliest component of an Electric Vehicle after batteries, Nidec Corp stands to gain from gaining a share of the pie in this segment. But for this Nidec needs to mass-produce a very cheap product that will prove to be disruptive. These traction motors are also used in electric trains because of their ability to cool efficiently and withstand high mechanical stress.
The remaining section under "Technological" is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
This section is available only in the 'Complete Report' on purchase.
Nidec Corporation SWOT and PESTLE Analysis PDF Report is a custom report and will be delivered to your email inbox within 2 business days from purchase.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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References used in Nidec Corporation SWOT & PESTLE Analysis Report
1. Annual Securities Report-From April 1, 2018 to March 31, 2019 - https://www.nidec.com/en/ir/library/reports/-/media/www-nidec-com/ir/library/reports/FY18Q4_en.pdf ,
2. Nidec Research and Development Center, Japan Adopts a Green Electricity Certificate System - https://www.nidec.com/en/sustainability/news/2019/news0801-02/
3. Nidec-Shimpo Launches AGV with Vision-Based Navigation System - https://www.nidec.com/en/product/news/2020/news0805-01/
4. Nidec to supply motors for Foxconn’s EV initiative - https://www.autonews.com/suppliers/nidec-supply-motors-foxconns-ev-initiative
5. Nidec Corporation Third Quarter Fiscal 2020 Results - https://www.nidec.com/-/media/www-nidec-com/ir/news/2021/0125-01/210125-01e.pdf
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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Nidec Corporation SWOT and PESTLE analysis has been conducted by Aakash Basu and reviewed by senior analysts from Barakaat Consulting.
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