Case Study Description of Northwest Newsprint, Inc. (B)
Northwest Newsprint, Inc. is a major producer of newsprint and pulpmills in the Pacific Northwest and Canada from which they supplied various North American markets. In Northwest Newsprint, Inc. (A), product #9A98E035, the assistant controller's supply chain optimization approach leads to the conclusion that Northwest Newsprint, Inc. has far too much manufacturing capacity. This supplemental case addresses the ability of price changes to mitigate supply chain issues and improve supply chain profitability.
Swot Analysis of "Northwest Newsprint, Inc. (B)" written by Peter C. Bell, Jing Chen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Newsprint Northwest facing as an external strategic factors. Some of the topics covered in Northwest Newsprint, Inc. (B) case study are - Strategic Management Strategies, Pricing, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Northwest Newsprint, Inc. (B) casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic , geopolitical disruptions, increasing transportation and logistics costs,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Northwest Newsprint, Inc. (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Northwest Newsprint, Inc. (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newsprint Northwest, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newsprint Northwest 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 Northwest Newsprint, Inc. (B) can be done for the following purposes –
1. Strategic planning using facts provided in Northwest Newsprint, Inc. (B) case study
2. Improving business portfolio management of Newsprint Northwest
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Newsprint Northwest
Strengths Northwest Newsprint, Inc. (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newsprint Northwest in Northwest Newsprint, Inc. (B) Harvard Business Review case study are -
Analytics focus
– Newsprint Northwest 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 Peter C. Bell, Jing Chen 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.
Strong track record of project management
– Newsprint Northwest is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Newsprint Northwest is one of the leading recruiters in the industry. Managers in the Northwest Newsprint, Inc. (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Newsprint Northwest 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.
High brand equity
– Newsprint Northwest has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Newsprint Northwest to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Newsprint Northwest 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.
Successful track record of launching new products
– Newsprint Northwest has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Newsprint Northwest 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.
Training and development
– Newsprint Northwest has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Northwest Newsprint, Inc. (B) 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.
Learning organization
- Newsprint Northwest 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 Newsprint Northwest is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Northwest Newsprint, Inc. (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Newsprint Northwest in the sector have low bargaining power. Northwest Newsprint, Inc. (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Newsprint Northwest to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Technology & Operations field
– Newsprint Northwest 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 Newsprint Northwest in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Newsprint Northwest digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Newsprint Northwest 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 Northwest Newsprint, Inc. (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northwest Newsprint, Inc. (B) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Northwest Newsprint, Inc. (B), in the dynamic environment Newsprint Northwest has struggled to respond to the nimble upstart competition. Newsprint Northwest has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Newsprint Northwest 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. Newsprint Northwest 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Northwest Newsprint, Inc. (B) 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 Newsprint Northwest 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Northwest Newsprint, Inc. (B), it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Northwest Newsprint, Inc. (B), it seems that the employees of Newsprint Northwest 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Newsprint Northwest is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Northwest Newsprint, Inc. (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Newsprint Northwest has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Northwest Newsprint, Inc. (B) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Newsprint Northwest 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 star products
– The top 2 products and services of the firm as mentioned in the Northwest Newsprint, Inc. (B) 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 Newsprint Northwest has relatively successful track record of launching new products.
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 Newsprint Northwest supply chain. Even after few cautionary changes mentioned in the HBR case study - Northwest Newsprint, Inc. (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Newsprint Northwest vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Newsprint Northwest 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.
Opportunities Northwest Newsprint, Inc. (B) | 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 Northwest Newsprint, Inc. (B) are -
Developing new processes and practices
– Newsprint Northwest can develop new processes and procedures in Technology & Operations 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Newsprint Northwest 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. Newsprint Northwest 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.
Learning at scale
– Online learning technologies has now opened space for Newsprint Northwest 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 Newsprint Northwest 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 Technology & Operations segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newsprint Northwest is facing challenges because of the dominance of functional experts in the organization. Northwest Newsprint, Inc. (B) 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.
Buying journey improvements
– Newsprint Northwest can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Northwest Newsprint, Inc. (B) 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.
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 Newsprint Northwest 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.
Creating value in data economy
– The success of analytics program of Newsprint Northwest has opened avenues for new revenue streams for the organization in the industry. This can help Newsprint Northwest to build a more holistic ecosystem as suggested in the Northwest Newsprint, Inc. (B) case study. Newsprint Northwest can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Newsprint Northwest can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Newsprint Northwest 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 Northwest Newsprint, Inc. (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newsprint Northwest to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Newsprint Northwest 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 Newsprint Northwest to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Newsprint Northwest can use these opportunities to build new business models that can help the communities that Newsprint Northwest operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Newsprint Northwest can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Northwest Newsprint, Inc. (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Northwest Newsprint, Inc. (B) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Northwest Newsprint, Inc. (B), Newsprint Northwest may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Environmental challenges
– Newsprint Northwest 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. Newsprint Northwest can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Newsprint Northwest is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Newsprint Northwest 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
– Newsprint Northwest has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Newsprint Northwest needs to keep up with the evolution of technology in the Technology & Operations 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.
High dependence on third party suppliers
– Newsprint Northwest 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.
Increasing wage structure of Newsprint Northwest
– 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 Newsprint Northwest.
Regulatory challenges
– Newsprint Northwest 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 Technology & Operations 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 Newsprint Northwest in the Technology & Operations sector and impact the bottomline of the organization.
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. Newsprint Northwest 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.
Consumer confidence and its impact on Newsprint Northwest 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.
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 Newsprint Northwest business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Northwest Newsprint, Inc. (B) 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 Northwest Newsprint, Inc. (B) 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 Northwest Newsprint, Inc. (B) 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 Northwest Newsprint, Inc. (B) 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 Northwest Newsprint, Inc. (B) 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 Newsprint Northwest needs to make to build a sustainable competitive advantage.