Orsa Group: the Challenge of Sustainable Development in the Amazon SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Orsa Group: the Challenge of Sustainable Development in the Amazon
In 2002, the Orsa Group consisted of several business units in the pulp, paper, and packaging sector, having grossed nearly US$ 250 million that year. The Group's enterprises were: Orsa Celulose; Papel e Embalagens [Orsa Pulp, Paper and Packaging], featuring industrial plants in the states of Sao Paulo and Goias and in the Amazon; and Jari Celulose and Orsa Florestal, both located in the Jari region in the heart of the Amazon rainforest. In addition, its philosophical principle of social and environmental responsibility led the Group to create a non-profit organization, the Orsa Foundation, supported by 1% of the Group's consolidated gross sales. More than a mere social welfare action branch, the Orsa Foundation became a priority within company operations as a result of two major factors: a) Orsa was a family-owned business run by main shareholder and president Sergio Amoroso, an entrepreneur with a penchant for social issues; and b) the strategic alignment, especially at the Jari Celulose unit, between business objectives and local, sustainable development. In the light of the specific challenges faced by pulp companies and international markets in general, Amoroso, along with Orsa Group's advisors and top managers, needed to assess the impact of the Orsa Foundation's social strategy on Jari operations.
Authors :: Rosa Maria Fischer, Decio Zylbersztajn, Joao Teixeira Pires, Luciana Rocha Mendonca
Swot Analysis of "Orsa Group: the Challenge of Sustainable Development in the Amazon" written by Rosa Maria Fischer, Decio Zylbersztajn, Joao Teixeira Pires, Luciana Rocha Mendonca includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Orsa Jari facing as an external strategic factors. Some of the topics covered in Orsa Group: the Challenge of Sustainable Development in the Amazon case study are - Strategic Management Strategies, Joint ventures and Organizational Development.
Some of the macro environment factors that can be used to understand the Orsa Group: the Challenge of Sustainable Development in the Amazon casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Orsa Group: the Challenge of Sustainable Development in the Amazon
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Orsa Group: the Challenge of Sustainable Development in the Amazon case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orsa Jari, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orsa Jari operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Orsa Group: the Challenge of Sustainable Development in the Amazon can be done for the following purposes –
1. Strategic planning using facts provided in Orsa Group: the Challenge of Sustainable Development in the Amazon case study
2. Improving business portfolio management of Orsa Jari
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Orsa Jari
Strengths Orsa Group: the Challenge of Sustainable Development in the Amazon | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orsa Jari in Orsa Group: the Challenge of Sustainable Development in the Amazon Harvard Business Review case study are -
Innovation driven organization
– Orsa Jari is one of the most innovative firm in sector. Manager in Orsa Group: the Challenge of Sustainable Development in the Amazon Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Orsa Group: the Challenge of Sustainable Development in the Amazon Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Orsa Jari in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Orsa Jari has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Orsa Group: the Challenge of Sustainable Development in the Amazon - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Orsa Jari has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Orsa Jari has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Orsa Jari has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Orsa Jari to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Orsa Jari is one of the leading recruiters in the industry. Managers in the Orsa Group: the Challenge of Sustainable Development in the Amazon are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Orsa Jari has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Orsa Jari
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Orsa Jari does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Organizational Development field
– Orsa Jari is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Orsa Jari in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Organizational Development industry
– Orsa Group: the Challenge of Sustainable Development in the Amazon firm has clearly differentiated products in the market place. This has enabled Orsa Jari to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Orsa Jari to invest into research and development (R&D) and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Orsa Jari digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Orsa Jari has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Orsa Group: the Challenge of Sustainable Development in the Amazon | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Orsa Group: the Challenge of Sustainable Development in the Amazon are -
Low market penetration in new markets
– Outside its home market of Orsa Jari, firm in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Orsa Jari has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Orsa Jari is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Orsa Group: the Challenge of Sustainable Development in the Amazon can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Orsa Jari supply chain. Even after few cautionary changes mentioned in the HBR case study - Orsa Group: the Challenge of Sustainable Development in the Amazon, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orsa Jari vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Orsa Jari has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon, it seems that the employees of Orsa Jari don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon, is just above the industry average. Orsa Jari needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Orsa Jari 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Orsa Jari is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Orsa Jari needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Orsa Jari to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Orsa Jari has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Orsa Jari needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Orsa Group: the Challenge of Sustainable Development in the Amazon | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Orsa Group: the Challenge of Sustainable Development in the Amazon are -
Leveraging digital technologies
– Orsa Jari can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Orsa Jari can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Orsa Group: the Challenge of Sustainable Development in the Amazon, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Orsa Jari has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Orsa Jari can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Orsa Jari is facing challenges because of the dominance of functional experts in the organization. Orsa Group: the Challenge of Sustainable Development in the Amazon case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Orsa Jari to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Orsa Jari to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Orsa Jari can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Orsa Jari can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Orsa Jari can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Orsa Jari can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Orsa Jari in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Orsa Jari can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Orsa Jari to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Orsa Jari in the consumer business. Now Orsa Jari can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Orsa Group: the Challenge of Sustainable Development in the Amazon External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Orsa Jari business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Orsa Jari with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Orsa Jari has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Orsa Jari needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Orsa Jari needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Orsa Jari can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Shortening product life cycle
– it is one of the major threat that Orsa Jari is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Orsa Jari
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Orsa Jari.
Regulatory challenges
– Orsa Jari needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Orsa Jari in the Organizational Development sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Orsa Jari.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Orsa Group: the Challenge of Sustainable Development in the Amazon, Orsa Jari may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Orsa Jari needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Orsa Jari can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Orsa Group: the Challenge of Sustainable Development in the Amazon Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Orsa Group: the Challenge of Sustainable Development in the Amazon needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Orsa Group: the Challenge of Sustainable Development in the Amazon is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Orsa Group: the Challenge of Sustainable Development in the Amazon is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Orsa Group: the Challenge of Sustainable Development in the Amazon is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Orsa Jari needs to make to build a sustainable competitive advantage.
