Nippon Telegraph and Telephone Corporation (NTT) SWOT & PESTLE Analysis

Strength

Weakness

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Opportunity

1. Overseas business expansion: In addition to strengthening the competitiveness and profitability in domestic network services, NTT need to focus towards overseas businesses and look it as a growth pillar and turn it into the profit generation phase.

2. Next generation network: Growth can be targeted in future earnings by leveraging initiatives related to the Tokyo 2020 Olympic and Paralympics Games and also from initiative of “Revitalization of Local Economies”, which is being aggressively advanced by the Japanese government in regions throughout Japan. This can be done by acting as a catalyst that promotes collaboration among various regions and industries and transiting the business model to the B2B2X model for the creation of new value-added services together with the partners. The “X” in this model refers to a wide range of parties, which includes not only individual customers but also companies.

Threat

1. Intense Competition: NTT Group faces competition in almost all aspects of its business which include the regional, long distance and international communications business, mobile communications and data communications business segments. As a result of acquisitions and partnerships among the competitor companies, competition has intensified in the communication industry offering both fixed-line communications services and mobile communications services.

2. Changing trends and advancing transformation: Changes in the environment have substantially altered their position as a telecommunications operator. Earlier, telecommunications operators followed an integrated approach to provide infrastructure and services, but today a diverse range of players have entered the market some of which include over-the top (OTT) businesses like YouTube and Facebook, and they are using their infrastructure to provide services that leverage their strengths. It is no longer an age in which telecommunication operators provide all services on their own and are the main players and, rather they are just one of them in the bigger picture.

3. Threats from natural disasters: NTT being based in Japan and highly dependence on the domestic market, high risks are involved at the times when Japan is hit by natural disasters. NTT has built a reliable network to withstand natural disasters, however in the event of earthquakes or tsunamis exceeding the tolerance limits it may cause major damage to company’s infrastructure causing disruption of services.

Political

1. No direct involvement in public policy issues: Public policy and governmental regulations not only impact telecom companies’ shareholder interests but also its abilities to meet customer requirements and develop appropriate solution for them. NTT however refrains from making political contributions as per Japan’s Political Funds Control Law. The group companies do make political contributions at their own discretion as per the relevant laws and regulations and their internal ethical guidelines. The company also complies with the appropriate disclosure laws as applicable. The group has thorough compliance policies especially after the arrest of an employee in 2010 on charges of bribing a government official.

Economical

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Social

Technological

1. Conflict with native insurance companies: Since the company is expanding it is causing conflict with native companies. Many times it is involving a third party to maintain quality of work with demand as per location and also collaborating with companies to maintain the same. But already established individual companies are facing threat due to the popularity of such global companies.

2. R&D investments helping create strong technology platform: NTT is strategically investing in Research and Development which is helping it advance its growth strategy. The group’s focus field for R&D are Software Engineering, Advanced Technology and IT Base Technology. The group is also aiming to utilize and develop solutions based on Artificial Intelligence (AI), IoT (internet of Things) and big data. NTT has been named in the Top 100 Global Innovators list by Clarivate Analytics and the organization has generated more than 16,000 patents as of 2016.

Legal

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Environmental

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