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 – there is backlash against globalization, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, 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.
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.
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.
Organizational Resilience of Stora Enso Oyj R
– The covid-19 pandemic has put organizational resilience at the centre of everthing Stora Enso Oyj R does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Analytics focus
– Stora Enso Oyj R 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 United Kingdom 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.
Training and development
– Stora Enso Oyj R has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
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.
Digital Transformation in Paper & Paper Products industry
- digital transformation varies from industry to industry. For Stora Enso Oyj R digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stora Enso Oyj R 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.
Highly skilled collaborators
– Stora Enso Oyj R 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 Stora Enso Oyj R have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
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.
High operating costs
– Compare to the competitors, Stora Enso Oyj R 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 Stora Enso Oyj R lucrative customers.
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.
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.
Employees’ less understanding of Stora Enso Oyj R strategy
– From the outside it seems that the employees of Stora Enso Oyj R 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Stora Enso Oyj R, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Stora Enso Oyj R has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Stora Enso Oyj R 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.
Increasing silos among functional specialists
– The organizational structure of Stora Enso Oyj R is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Stora Enso Oyj R needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stora Enso Oyj R to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
Lack of clear differentiation of Stora Enso Oyj R products
– To increase the profitability and margins on the products, Stora Enso Oyj R needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Stora Enso Oyj R 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. Stora Enso Oyj R 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.
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.
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.
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.
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.
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.
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. Stora Enso Oyj R can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Stora Enso Oyj R 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.
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.
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.
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.
Manufacturing automation
– Stora Enso Oyj R 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.
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 Stora Enso Oyj R in the Paper & Paper Products industry. Now Stora Enso Oyj R can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Stora Enso Oyj R 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 Stora Enso Oyj R prominent markets.
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.
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.
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.
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.
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. Stora Enso Oyj R 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.
High dependence on third party suppliers
– Stora Enso Oyj R 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.
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.
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 Stora Enso Oyj R in the Paper & Paper Products sector and impact the bottomline of the organization.
Regulatory challenges
– Stora Enso Oyj R 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.
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.
