International Paper APPM (IPAP) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for International Paper APPM (India)
Based on various researches at Oak Spring University , International Paper APPM is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
increasing energy prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of International Paper APPM
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that International Paper APPM can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the International Paper APPM, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which International Paper APPM 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 International Paper APPM can be done for the following purposes –
1. Strategic planning of International Paper APPM
2. Improving business portfolio management of International Paper APPM
3. Assessing feasibility of the new initiative in India
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of International Paper APPM
Strengths of International Paper APPM | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of International Paper APPM are -
Diverse revenue streams
– International Paper APPM is present in almost all the verticals within the Paper & Paper Products industry. This has provided International Paper APPM 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.
Ability to lead change in Paper & Paper Products
– International Paper APPM is one of the leading players in the Paper & Paper Products industry in India. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in India but also across the existing markets. The ability to lead change has enabled International Paper APPM in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– International Paper APPM is one of the most innovative firm in Paper & Paper Products sector.
Cross disciplinary teams
– Horizontal connected teams at the International Paper APPM 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.
Superior customer experience
– The customer experience strategy of International Paper APPM in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– International Paper APPM has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled International Paper APPM to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- International Paper APPM 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 International Paper APPM is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at International Paper APPM emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of International Paper APPM comprises – understanding the underlying the factors in the Paper & Paper Products 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.
Sustainable margins compare to other players in Paper & Paper Products industry
– International Paper APPM has clearly differentiated products in the market place. This has enabled International Paper APPM to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped International Paper APPM to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of International Paper APPM in the Basic Materials sector have low bargaining power. International Paper APPM has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps International Paper APPM to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– International Paper APPM has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – International Paper APPM staying ahead in the Paper & Paper Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– International Paper APPM has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Paper & Paper Products industry. Secondly the value chain collaborators of International Paper APPM have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of International Paper APPM | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of International Paper APPM are -
No frontier risks strategy
– From the 10K / annual statement of International Paper APPM, it seems that company is thinking out the frontier risks that can impact Paper & Paper Products industry. 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.
High dependence on International Paper APPM ‘s star products
– The top 2 products and services of International Paper APPM still accounts for major business revenue. This dependence on star products in Paper & Paper Products industry has resulted into insufficient focus on developing new products, even though International Paper APPM has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at International Paper APPM, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. International Paper APPM has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though International Paper APPM has some of the most successful models in the Paper & Paper Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. International Paper APPM should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, International Paper APPM is slow explore the new channels of communication. These new channels of communication can help International Paper APPM to provide better information regarding Paper & Paper Products products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– International Paper APPM 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.
Capital Spending Reduction
– Even during the low interest decade, International Paper APPM 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 Paper & Paper Products industry using digital technology.
Aligning sales with marketing
– From the outside it seems that International Paper APPM needs to have more collaboration between its sales team and marketing team. Sales professionals in the Paper & Paper Products industry have deep experience in developing customer relationships. Marketing department at International Paper APPM can leverage the sales team experience to cultivate customer relationships as International Paper APPM is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of International Paper APPM is just above the Paper & Paper Products industry average. It 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, International Paper APPM has high operating costs in the Paper & Paper Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract International Paper APPM lucrative customers.
Skills based hiring in Paper & Paper Products industry
– The stress on hiring functional specialists at International Paper APPM 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.
International Paper APPM Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of International Paper APPM are -
Creating value in data economy
– The success of analytics program of International Paper APPM has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help International Paper APPM to build a more holistic ecosystem for International Paper APPM products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– International Paper APPM can improve the customer journey of consumers in the Paper & Paper Products industry by using analytics and artificial intelligence. It 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.
Using analytics as competitive advantage
– International Paper APPM has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Paper & Paper Products sector. This continuous investment in analytics has enabled International Paper APPM to build a competitive advantage using analytics. The analytics driven competitive advantage can help International Paper APPM to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help International Paper APPM to increase its market reach. International Paper APPM 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.
Learning at scale
– Online learning technologies has now opened space for International Paper APPM 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 International Paper APPM 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 Paper & Paper Products industry.
Leveraging digital technologies
– International Paper APPM 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.
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 International Paper APPM 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.
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. International Paper APPM can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– International Paper APPM can develop new processes and procedures in Paper & Paper Products 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
– International Paper APPM can use the latest technology developments to improve its manufacturing and designing process in Paper & Paper Products sector. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, International Paper APPM can use these opportunities to build new business models that can help the communities that International Paper APPM operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, International Paper APPM 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 International Paper APPM to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats International Paper APPM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of International Paper APPM are -
Consumer confidence and its impact on International Paper APPM 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 Paper & Paper Products industry and other sectors.
High dependence on third party suppliers
– International Paper APPM 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.
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 International Paper APPM.
Environmental challenges
– International Paper APPM 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. International Paper APPM can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
Regulatory challenges
– International Paper APPM 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 Paper & Paper Products industry regulations.
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 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. International Paper APPM needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– International Paper APPM 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 Paper & Paper Products industry.
Shortening product life cycle
– it is one of the major threat that International Paper APPM is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for International Paper APPM in Paper & Paper Products industry. The Paper & Paper Products 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.
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. International Paper APPM 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.
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 International Paper APPM in the Paper & Paper Products sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents International Paper APPM with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Paper & Paper Products sector.
Weighted SWOT Analysis of International Paper APPM Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at International Paper APPM 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 International Paper APPM 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 International Paper APPM 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 International Paper APPM 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 International Paper APPM needs to make to build a sustainable competitive advantage.
