Stora Enso Oyj R (0CXC) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Stora Enso Oyj R (United Kingdom)
Based on various researches at Oak Spring University , Stora Enso Oyj R is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing household debt because of falling income levels, wage bills are increasing, technology disruption, challanges to central banks by blockchain based private currencies, increasing commodity prices,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Stora Enso Oyj R can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stora Enso Oyj R, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stora Enso Oyj R 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 Stora Enso Oyj R can be done for the following purposes –
1. Strategic planning of Stora Enso Oyj R
2. Improving business portfolio management of Stora Enso Oyj R
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stora Enso Oyj R
Strengths of Stora Enso Oyj R | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stora Enso Oyj R are -
Low bargaining power of suppliers
– Suppliers of Stora Enso Oyj R in the Basic Materials sector have low bargaining power. Stora Enso Oyj R has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stora Enso Oyj R to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Paper & Paper Products industry
– Stora Enso Oyj R has clearly differentiated products in the market place. This has enabled Stora Enso Oyj R to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Stora Enso Oyj R to invest into research and development (R&D) and innovation.
Strong track record of project management in the Paper & Paper Products industry
– Stora Enso Oyj R is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Stora Enso Oyj R 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.
Innovation driven organization
– Stora Enso Oyj R is one of the most innovative firm in Paper & Paper Products sector.
Successful track record of launching new products
– Stora Enso Oyj R has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stora Enso Oyj R 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.
Ability to recruit top talent
– Stora Enso Oyj R is one of the leading players in the Paper & Paper Products industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Stora Enso Oyj R 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
– Stora Enso Oyj R has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stora Enso Oyj R to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Stora Enso Oyj R 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.
Learning organization
- Stora Enso Oyj R 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 Stora Enso Oyj R is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Stora Enso Oyj R emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Stora Enso Oyj R has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Stora Enso Oyj R 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.
Weaknesses of Stora Enso Oyj R | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stora Enso Oyj R are -
Slow decision making process
– As mentioned earlier in the report, Stora Enso Oyj R has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Paper & Paper Products industry over the last five years. Stora Enso Oyj R 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.
Compensation and incentives
– The revenue per employee of Stora Enso Oyj R 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, Stora Enso Oyj R needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Paper & Paper Products industry, Stora Enso Oyj R 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.
Capital Spending Reduction
– Even during the low interest decade, Stora Enso Oyj R 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.
Interest costs
– Compare to the competition, Stora Enso Oyj R 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 Stora Enso Oyj R 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.
Products dominated business model
– Even though Stora Enso Oyj R 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. Stora Enso Oyj R should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in United Kingdom, Stora Enso Oyj R 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 Stora Enso Oyj R supply chain. Even after few cautionary changes, Stora Enso Oyj R is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stora Enso Oyj R vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stora Enso Oyj R is slow explore the new channels of communication. These new channels of communication can help Stora Enso Oyj R 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.
Stora Enso Oyj R Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Stora Enso Oyj R are -
Better consumer reach
– The expansion of the 5G network will help Stora Enso Oyj R to increase its market reach. Stora Enso Oyj R 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.
Buying journey improvements
– Stora Enso Oyj R 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.
Creating value in data economy
– The success of analytics program of Stora Enso Oyj R has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Stora Enso Oyj R to build a more holistic ecosystem for Stora Enso Oyj R products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Stora Enso Oyj R can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Stora Enso Oyj R 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stora Enso Oyj R is facing challenges because of the dominance of functional experts in the organization. Stora Enso Oyj R can utilize new technology in the field of Paper & Paper Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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, Stora Enso Oyj R can use these opportunities to build new business models that can help the communities that Stora Enso Oyj R operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
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 Stora Enso Oyj R 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stora Enso Oyj R 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
– Stora Enso Oyj R 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 Stora Enso Oyj R to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stora Enso Oyj R to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Stora Enso Oyj R 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stora Enso Oyj R 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 Stora Enso Oyj R to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Stora Enso Oyj R 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.
Threats Stora Enso Oyj R External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Stora Enso Oyj R are -
Stagnating economy with rate increase
– Stora Enso Oyj R 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.
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 Stora Enso Oyj R business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Stora Enso Oyj R 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. Stora Enso Oyj R can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Stora Enso Oyj R 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.
Shortening product life cycle
– it is one of the major threat that Stora Enso Oyj R is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Stora Enso Oyj R needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Increasing wage structure of Stora Enso Oyj R
– 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 Stora Enso Oyj R.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stora Enso Oyj R 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.
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 Stora Enso Oyj R.
Technology acceleration in Forth Industrial Revolution
– Stora Enso Oyj R has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Stora Enso Oyj R needs to keep up with the evolution of technology in the Paper & Paper Products 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Stora Enso Oyj R may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Paper & Paper Products sector.
Consumer confidence and its impact on Stora Enso Oyj R 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.
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. Stora Enso Oyj R 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 Stora Enso Oyj R Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Stora Enso Oyj R 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 Stora Enso Oyj R 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 Stora Enso Oyj R 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 Stora Enso Oyj R 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 Stora Enso Oyj R needs to make to build a sustainable competitive advantage.