Complete SWOT Analysis of Daiwa House – Japan’s Largest Homebuilder

Products & Services by Daiwa House

Daiwa House has been in the property development business for many years and offers:

• Property development
• General contracting for construction
• Engineering design
• Residential real estate marketer

Competitors of Daiwa House

Daiwa House competes on an international level with many other companies that deal in real estate. The top 4 competitors of Daiwa House are

• Sekisui House
• UDR
• Sun Communities
• Ares Commercial Real Estate

As now we have a better understanding of Daiwa House, let’s look into the SWOT Analysis of Daiwa House.

SWOT Analysis of Daiwa House

A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven and true management paradigm that allows Daiwa House to compare its business and performance with competitors and the industry as a whole.

So let us go ahead and first have a glance at the strengths of Daiwa House from the SWOT analysis of Daiwa House.

Strengths of Daiwa House

Your organisation’s strength is something that makes it stand out from the rest. It can be a competitive advantage that sets it apart from its competitors. Some of the strengths of Daiwa House are as follows –

• Leading Market Position: Daiwa Households a leading market position in Japan owing to the high quality and diversified real estate products or services. Since its inception, the growth enabled the company to create new revenue streams and diversify its economic cycle.
• Good Capital Expenditure Returns: Daiwa House has an amazing track record of completing new projects within the deadline and generating good returns on capital expenditure by establishing new revenue sources.
• Customer Satisfaction is Just High: Daiwa House has been able to achieve high customer satisfaction among current customers by providing high-quality services. The company has also built strong brand equity among potential customers due to its dedicated customer relationship management department.
• Highly Qualified Workforce: The company provides thorough training, skill development, and learning opportunities to all its employees. Human resources are a major factor in the success of Daiwa House in the construction sector.
• Track Record of Innovation: Daiwa House Japan has a successful record of consumer-driven and customer-centric innovation. They always deliver innovative real-estate infrastructure.
• Catering to Different Customer Segments: Daiwa House Japan has an extensive set of products accommodating different segments of customers in the construction service department. This has helped the company to diversify its revenue streams.

Weaknesses of Daiwa House

Strategy is all about choices and weaknesses are areas where companies can improve through SWOT analysis and leverage their competitive advantage and strategic positioning.

• Lack of Digital Presence: In today’s day and age brands need to establish their presence on social media and the web. This way consumers can remain up to date with the upcoming projects.
• Gross Margins: The gross and operating margins, if not improved, could put pressure on the financial statement of the company.
• Declining Market Share: The construction service industry is growing at a fast pace, hence Daiwa House Japan needs to keep up with the market trends to drive future growth.
• High Cost of Replacing Existing Experts: Very few experienced employees are responsible for the growth of Daiwa House Japan. Replacing them and finding the right fit for the company is a tedious task.
• The Added Cost of New Supply Chain Network & Logistics: Technology and artificial intelligence have drastically altered old business models in the Capital Goods industry. This has led to a decrease in the dealer network of Daiwa House Japan. Building a robust supply chain network can be very expensive for the company.

Opportunities for Daiwa House

Opportunities are potential areas for companies to focus on to improve results, increase sales, and ultimately profit.

• Increasing Government Regulations: Regulations make it difficult for unorganised players to operate in the property development segment. This can be a huge advantage for Daiwa House Japan to increase its customer base.
• Low Inflation Rates: Low inflation rate means more stability in the market. This enables Daiwa House Japan customers to get credit at a lower interest rate leading to an increase in the consumption of Daiwa House Japan products.
• Hiring Digital Marketers: The pandemic moved all businesses online. Having an online presence can boost the company’s relationship with its customers. Want to know how Daiwa House can boost its growth with social media? Then you must check out the benefits of social media marketing to answer your query.
• Technological Advancements: Advancements in technology are improving industrial productivity. If utilised wisely then tech can enable the company to maintain existing clients and lure in potential clients by providing them high-class services. Using technology can increase productivity and decrease extra costs.
• Customers Migrating to Higher End Products: Daiwa House Japan has strong brand recognition for their premium property development services segment. In the lower segment, customers have experience with excellent customer service. This represents a great opportunity for the company to increase its profitability in the market. 

Threats to Daiwa House

Threats are environmental factors that can harm a company’s development. Here are some of Daiwa House’s threats:

• Upcoming Competition: Daiwa House Japan is a leader in product innovation in property development services, but it is still facing challenges and stiff competition from local as well as international competitors.
• Distrust in Government Institutions: There is always a threat of losing the IPR to the local competitors as the Intellectual Property Rights framework is not very strong in emerging markets, especially in  Japan.
• Changing Demographics: The new generation is tech-savvy and is less brand loyal and more open to experimentation. This can lead to a reduction in margins in the long run.
• Commoditization of Products: There has been an increase in the commodification of the capital goods industry which is a major challenge for Daiwa House Japan and other players in the industry.
• Changing Political Environment: With Brexit’s impacts on the European Union, the US-China trade war and the overall instability in the East can give a major blow to Daiwa House Japan, both in the rural and international markets.

This ends our elaborative SWOT analysis of Daiwa House. Let us conclude our learning below.