Metso Paper: Globalization of Finnish Metal Workshops SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Metso Paper: Globalization of Finnish Metal Workshops
Metso Paper, the world's largest producer of paper machines, aims to transform itself into a knowledge- and information-based service and solution provider for the paper industry by aggressively exploiting information technologies. In the fall of 2002, Jorma Hujala, a vice-president of the Development, References, and Projects Department of Metso Paper's largest business unit, Rautpohja, attended a corporate-wide brainstorming meeting to decide how to improve the paper machine production and delivery process. Due to low growth in its traditional markets, the company needs to consider extending its strategy and business model to become not just a machine producer but also a supplier of services related to the value chain of paper production. In executing the new strategy, the company considers its world-class knowledge and capabilities to be its key competitive asset. Over the past decade, the department had improved project delivery performance through aggressive use of IT. Hujala and his team had to think carefully about how to enable and support the new corporate strategy and how to continue to develop their IT services and competencies accordingly.
Authors :: Lynda M. Applegate, Marikka Heikkila, Kalle Lyytinen
Swot Analysis of "Metso Paper: Globalization of Finnish Metal Workshops" written by Lynda M. Applegate, Marikka Heikkila, Kalle Lyytinen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Metso Paper facing as an external strategic factors. Some of the topics covered in Metso Paper: Globalization of Finnish Metal Workshops case study are - Strategic Management Strategies, Design, Globalization, Internet, IT, Operations management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Metso Paper: Globalization of Finnish Metal Workshops casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, geopolitical disruptions, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Metso Paper: Globalization of Finnish Metal Workshops
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Metso Paper: Globalization of Finnish Metal Workshops case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Metso Paper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Metso Paper 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 Metso Paper: Globalization of Finnish Metal Workshops can be done for the following purposes –
1. Strategic planning using facts provided in Metso Paper: Globalization of Finnish Metal Workshops case study
2. Improving business portfolio management of Metso Paper
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Metso Paper
Strengths Metso Paper: Globalization of Finnish Metal Workshops | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Metso Paper in Metso Paper: Globalization of Finnish Metal Workshops Harvard Business Review case study are -
Strong track record of project management
– Metso Paper is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Metso Paper digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Metso Paper 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.
Analytics focus
– Metso Paper is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lynda M. Applegate, Marikka Heikkila, Kalle Lyytinen can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Metso Paper: Globalization of Finnish Metal Workshops 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.
Organizational Resilience of Metso Paper
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Metso Paper does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Metso Paper has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Metso Paper: Globalization of Finnish Metal Workshops Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Metso Paper has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Metso Paper 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.
Learning organization
- Metso Paper is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Metso Paper is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Metso Paper: Globalization of Finnish Metal Workshops Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Metso Paper in the sector have low bargaining power. Metso Paper: Globalization of Finnish Metal Workshops has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Metso Paper to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Metso Paper has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Metso Paper: Globalization of Finnish Metal Workshops HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Metso Paper is one of the most innovative firm in sector. Manager in Metso Paper: Globalization of Finnish Metal Workshops Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Metso Paper are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Metso Paper: Globalization of Finnish Metal Workshops | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Metso Paper: Globalization of Finnish Metal Workshops are -
Lack of clear differentiation of Metso Paper products
– To increase the profitability and margins on the products, Metso Paper needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Metso Paper: Globalization of Finnish Metal Workshops, in the dynamic environment Metso Paper has struggled to respond to the nimble upstart competition. Metso Paper has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Metso Paper is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Metso Paper: Globalization of Finnish Metal Workshops can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Metso Paper has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Metso Paper has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Metso Paper even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Metso Paper 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.
Aligning sales with marketing
– It come across in the case study Metso Paper: Globalization of Finnish Metal Workshops that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Metso Paper: Globalization of Finnish Metal Workshops can leverage the sales team experience to cultivate customer relationships as Metso Paper is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Metso Paper: Globalization of Finnish Metal Workshops, is just above the industry average. Metso Paper 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.
Interest costs
– Compare to the competition, Metso Paper 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.
High cash cycle compare to competitors
Metso Paper 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.
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 Metso Paper supply chain. Even after few cautionary changes mentioned in the HBR case study - Metso Paper: Globalization of Finnish Metal Workshops, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Metso Paper vulnerable to further global disruptions in South East Asia.
Opportunities Metso Paper: Globalization of Finnish Metal Workshops | 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 Metso Paper: Globalization of Finnish Metal Workshops are -
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. Metso Paper can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Metso Paper 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.
Learning at scale
– Online learning technologies has now opened space for Metso Paper to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Metso Paper can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Manufacturing automation
– Metso Paper can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Metso Paper to increase its market reach. Metso Paper will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Metso Paper in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Metso Paper can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Metso Paper has opened avenues for new revenue streams for the organization in the industry. This can help Metso Paper to build a more holistic ecosystem as suggested in the Metso Paper: Globalization of Finnish Metal Workshops case study. Metso Paper can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Metso Paper has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Metso Paper: Globalization of Finnish Metal Workshops - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Metso Paper to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Metso Paper 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. Metso Paper 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.
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 Metso Paper 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.
Buying journey improvements
– Metso Paper can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Metso Paper: Globalization of Finnish Metal Workshops suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Metso Paper: Globalization of Finnish Metal Workshops External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper business can come under increasing regulations regarding data privacy, data security, etc.
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. Metso Paper needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Metso Paper: Globalization of Finnish Metal Workshops, Metso Paper may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Metso Paper with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Metso Paper can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Metso Paper has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Metso Paper needs to keep up with the evolution of technology in the Strategy & Execution 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.
High dependence on third party suppliers
– Metso Paper high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Metso Paper can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Metso Paper 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. Metso Paper can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Metso Paper
– 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 Metso Paper.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Metso Paper will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Metso Paper can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Metso Paper: Globalization of Finnish Metal Workshops .
Weighted SWOT Analysis of Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper: Globalization of Finnish Metal Workshops 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 Metso Paper needs to make to build a sustainable competitive advantage.