Balkrishna Paper Mills (BALK) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Balkrishna Paper Mills (India)
Based on various researches at Oak Spring University , Balkrishna Paper Mills is operating in a macro-environment that has been destablized by – wage bills are increasing, 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, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Balkrishna Paper Mills
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Balkrishna Paper Mills can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Balkrishna Paper Mills, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Balkrishna Paper Mills 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 Balkrishna Paper Mills can be done for the following purposes –
1. Strategic planning of Balkrishna Paper Mills
2. Improving business portfolio management of Balkrishna Paper Mills
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 Balkrishna Paper Mills
Strengths of Balkrishna Paper Mills | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Balkrishna Paper Mills are -
Sustainable margins compare to other players in Paper & Paper Products industry
– Balkrishna Paper Mills has clearly differentiated products in the market place. This has enabled Balkrishna Paper Mills to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Balkrishna Paper Mills to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Balkrishna Paper Mills in the Basic Materials sector have low bargaining power. Balkrishna Paper Mills has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Balkrishna Paper Mills to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Balkrishna Paper Mills 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.
High switching costs
– The high switching costs that Balkrishna Paper Mills 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.
Cross disciplinary teams
– Horizontal connected teams at the Balkrishna Paper Mills 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.
Digital Transformation in Paper & Paper Products industry
- digital transformation varies from industry to industry. For Balkrishna Paper Mills digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Balkrishna Paper Mills 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.
Ability to lead change in Paper & Paper Products
– Balkrishna Paper Mills 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 Balkrishna Paper Mills in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Balkrishna Paper Mills 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 Paper & Paper Products industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Balkrishna Paper Mills is present in almost all the verticals within the Paper & Paper Products industry. This has provided Balkrishna Paper Mills 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.
Effective Research and Development (R&D)
– Balkrishna Paper Mills has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Balkrishna Paper Mills 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.
Innovation driven organization
– Balkrishna Paper Mills is one of the most innovative firm in Paper & Paper Products sector.
Successful track record of launching new products
– Balkrishna Paper Mills has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Balkrishna Paper Mills 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.
Weaknesses of Balkrishna Paper Mills | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Balkrishna Paper Mills are -
Need for greater diversity
– Balkrishna Paper Mills 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.
High cash cycle compare to competitors
Balkrishna Paper Mills has a high cash cycle compare to other players in the Paper & Paper Products 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 bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in India, Balkrishna Paper Mills is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Paper & Paper Products industry.
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 Balkrishna Paper Mills supply chain. Even after few cautionary changes, Balkrishna Paper Mills is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Balkrishna Paper Mills vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Balkrishna Paper Mills strategy
– From the outside it seems that the employees of Balkrishna Paper Mills 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.
Lack of clear differentiation of Balkrishna Paper Mills products
– To increase the profitability and margins on the products, Balkrishna Paper Mills needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Balkrishna Paper Mills has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Balkrishna Paper Mills is one of the leading players in the Paper & Paper Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Paper & Paper Products industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Paper & Paper Products industry, Balkrishna Paper Mills 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.
Increasing silos among functional specialists
– The organizational structure of Balkrishna Paper Mills is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Balkrishna Paper Mills needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Balkrishna Paper Mills to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Balkrishna Paper Mills 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.
Balkrishna Paper Mills Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Balkrishna Paper Mills are -
Building a culture of innovation
– managers at Balkrishna Paper Mills 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.
Loyalty marketing
– Balkrishna Paper Mills 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.
Better consumer reach
– The expansion of the 5G network will help Balkrishna Paper Mills to increase its market reach. Balkrishna Paper Mills 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.
Developing new processes and practices
– Balkrishna Paper Mills 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Balkrishna Paper Mills can use these opportunities to build new business models that can help the communities that Balkrishna Paper Mills operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Leveraging digital technologies
– Balkrishna Paper Mills 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Balkrishna Paper Mills 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 Balkrishna Paper Mills 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 Paper & Paper Products industry, but it has also influenced the consumer preferences. Balkrishna Paper Mills can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Paper & Paper Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Balkrishna Paper Mills in the Paper & Paper Products industry. Now Balkrishna Paper Mills can target international markets with far fewer capital restrictions requirements than the existing system.
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 Balkrishna Paper Mills 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Balkrishna Paper Mills in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Paper & Paper Products industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Balkrishna Paper Mills can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Balkrishna Paper Mills has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Balkrishna Paper Mills to build a more holistic ecosystem for Balkrishna Paper Mills products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Balkrishna Paper Mills External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Balkrishna Paper Mills are -
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. Balkrishna Paper Mills 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.
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.
Easy access to finance
– Easy access to finance in Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Balkrishna Paper Mills can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Balkrishna Paper Mills 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.
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 Balkrishna Paper Mills.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Balkrishna Paper Mills 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.
Regulatory challenges
– Balkrishna Paper Mills 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.
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 Balkrishna Paper Mills in the Paper & Paper Products sector and impact the bottomline of the organization.
Consumer confidence and its impact on Balkrishna Paper Mills 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 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. Balkrishna Paper Mills needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Balkrishna Paper Mills 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 Balkrishna Paper Mills prominent markets.
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.
Shortening product life cycle
– it is one of the major threat that Balkrishna Paper Mills is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Balkrishna Paper Mills Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Balkrishna Paper Mills 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 Balkrishna Paper Mills 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 Balkrishna Paper Mills 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 Balkrishna Paper Mills 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 Balkrishna Paper Mills needs to make to build a sustainable competitive advantage.
