Case Study Description of Cascades Tissue Group: Sustainable Growth?
In October 2006, Ms. Suzanne Blanchet, President and Chief Executive Officer of Cascades Tissue Group (CTG), was pondering how much weight should be given to products sold under the CTG brand compared to those sold under distributors' or retailers' private labels. The fourth largest tissue paper producer in North America, CTG was one of the four divisions of Cascades Inc.: a giant in the Canadian pulp and paper industry. The distributor and retailer private label market offered an attractive prospect for growth, but at the expense of CTG's own brands, which were more economically viable. However, developing a brand required sustained resources and investments, especially in marketing, which CTG's plant managers were still reluctant to support. Furthermore, her decision had to take into account the opportunities and threats related to the arrival of producers from emerging countries.
Authors :: Pierre Batellier, Emmanuel ER Raufflet, Louis Hebert
Swot Analysis of "Cascades Tissue Group: Sustainable Growth?" written by Pierre Batellier, Emmanuel ER Raufflet, Louis Hebert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cascades Ctg facing as an external strategic factors. Some of the topics covered in Cascades Tissue Group: Sustainable Growth? case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cascades Tissue Group: Sustainable Growth? casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Cascades Tissue Group: Sustainable Growth?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cascades Tissue Group: Sustainable Growth? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cascades Ctg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? can be done for the following purposes –
1. Strategic planning using facts provided in Cascades Tissue Group: Sustainable Growth? case study
2. Improving business portfolio management of Cascades Ctg
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 Cascades Ctg
Strengths Cascades Tissue Group: Sustainable Growth? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cascades Ctg in Cascades Tissue Group: Sustainable Growth? Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cascades Ctg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cascades Ctg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Cascades Ctg has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cascades Tissue Group: Sustainable Growth? 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Cascades Tissue Group: Sustainable Growth? firm has clearly differentiated products in the market place. This has enabled Cascades Ctg to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cascades Ctg to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Cascades Ctg is present in almost all the verticals within the industry. This has provided firm in Cascades Tissue Group: Sustainable Growth? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Cascades Tissue Group: Sustainable Growth? 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.
Innovation driven organization
– Cascades Ctg is one of the most innovative firm in sector. Manager in Cascades Tissue Group: Sustainable Growth? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Cascades Ctg 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 Pierre Batellier, Emmanuel ER Raufflet, Louis Hebert 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.
High switching costs
– The high switching costs that Cascades Ctg 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.
Learning organization
- Cascades Ctg 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 Cascades Ctg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cascades Tissue Group: Sustainable Growth? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cascades Ctg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cascades Tissue Group: Sustainable Growth? are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cascades Tissue Group: Sustainable Growth? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cascades Ctg has relatively successful track record of launching new products.
High cash cycle compare to competitors
Cascades Ctg 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cascades Ctg 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.
Slow to strategic competitive environment developments
– As Cascades Tissue Group: Sustainable Growth? HBR case study mentions - Cascades Ctg takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Cascades Ctg 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cascades Tissue Group: Sustainable Growth?, is just above the industry average. Cascades Ctg 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.
Aligning sales with marketing
– It come across in the case study Cascades Tissue Group: Sustainable Growth? 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 Cascades Tissue Group: Sustainable Growth? can leverage the sales team experience to cultivate customer relationships as Cascades Ctg is planning to shift buying processes online.
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 Cascades Ctg supply chain. Even after few cautionary changes mentioned in the HBR case study - Cascades Tissue Group: Sustainable Growth?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cascades Ctg vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Cascades Tissue Group: Sustainable Growth? 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 Cascades Ctg 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cascades Tissue Group: Sustainable Growth?, in the dynamic environment Cascades Ctg has struggled to respond to the nimble upstart competition. Cascades Ctg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Cascades Ctg has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Cascades Tissue Group: Sustainable Growth? | 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 Cascades Tissue Group: Sustainable Growth? are -
Better consumer reach
– The expansion of the 5G network will help Cascades Ctg to increase its market reach. Cascades Ctg 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cascades Ctg can use these opportunities to build new business models that can help the communities that Cascades Ctg operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Cascades Ctg 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.
Using analytics as competitive advantage
– Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cascades Ctg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Cascades Ctg 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.
Developing new processes and practices
– Cascades Ctg can develop new processes and procedures in Strategy & Execution 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.
Manufacturing automation
– Cascades Ctg 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.
Buying journey improvements
– Cascades Ctg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cascades Tissue Group: Sustainable Growth? 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.
Building a culture of innovation
– managers at Cascades Ctg 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.
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 Cascades Ctg 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cascades Ctg 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 Cascades Ctg to hire the very best people irrespective of their geographical location.
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. Cascades Ctg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Cascades Ctg 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.
Threats Cascades Tissue Group: Sustainable Growth? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cascades Tissue Group: Sustainable Growth? are -
Environmental challenges
– Cascades Ctg 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. Cascades Ctg can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Cascades Ctg is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Cascades Ctg demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? .
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 Cascades Ctg business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Cascades Ctg 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.
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 Cascades Ctg in the Strategy & Execution 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 Cascades Ctg.
Increasing wage structure of Cascades Ctg
– 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 Cascades Ctg.
High dependence on third party suppliers
– Cascades Ctg 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cascades Ctg in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Cascades Ctg 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 Cascades Tissue Group: Sustainable Growth? 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 Cascades Tissue Group: Sustainable Growth? 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 Cascades Tissue Group: Sustainable Growth? 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 Cascades Tissue Group: Sustainable Growth? 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 Cascades Tissue Group: Sustainable Growth? 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 Cascades Ctg needs to make to build a sustainable competitive advantage.
