KLABIN S/A UNT N2 (KLBN11) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for KLABIN S/A UNT N2 (Brazil)
Based on various researches at Oak Spring University , KLABIN S/A UNT N2 is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing commodity prices, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of KLABIN S/A UNT N2
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KLABIN S/A UNT N2 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KLABIN S/A UNT N2, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 can be done for the following purposes –
1. Strategic planning of KLABIN S/A UNT N2
2. Improving business portfolio management of KLABIN S/A UNT N2
3. Assessing feasibility of the new initiative in Brazil
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KLABIN S/A UNT N2
Strengths of KLABIN S/A UNT N2 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of KLABIN S/A UNT N2 are -
Operational resilience
– The operational resilience strategy of KLABIN S/A UNT N2 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.
Superior customer experience
– The customer experience strategy of KLABIN S/A UNT N2 in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– KLABIN S/A UNT N2 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. KLABIN S/A UNT N2 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.
Effective Research and Development (R&D)
– KLABIN S/A UNT N2 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – KLABIN S/A UNT N2 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.
Ability to lead change in Paper & Paper Products
– KLABIN S/A UNT N2 is one of the leading players in the Paper & Paper Products industry in Brazil. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in Brazil but also across the existing markets. The ability to lead change has enabled KLABIN S/A UNT N2 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– KLABIN S/A UNT N2 is one of the most innovative firm in Paper & Paper Products sector.
Cross disciplinary teams
– Horizontal connected teams at the KLABIN S/A UNT N2 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.
Low bargaining power of suppliers
– Suppliers of KLABIN S/A UNT N2 in the Basic Materials sector have low bargaining power. KLABIN S/A UNT N2 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps KLABIN S/A UNT N2 to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at KLABIN S/A UNT N2 emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Paper & Paper Products industry
– KLABIN S/A UNT N2 has clearly differentiated products in the market place. This has enabled KLABIN S/A UNT N2 to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped KLABIN S/A UNT N2 to invest into research and development (R&D) and innovation.
Organizational Resilience of KLABIN S/A UNT N2
– The covid-19 pandemic has put organizational resilience at the centre of everthing KLABIN S/A UNT N2 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of KLABIN S/A UNT N2 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KLABIN S/A UNT N2 are -
Interest costs
– Compare to the competition, KLABIN S/A UNT N2 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, KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 lucrative customers.
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 KLABIN S/A UNT N2 supply chain. Even after few cautionary changes, KLABIN S/A UNT N2 is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left KLABIN S/A UNT N2 vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– KLABIN S/A UNT N2 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 bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in Brazil, KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 ‘s star products
– The top 2 products and services of KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of KLABIN S/A UNT N2, 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.
Aligning sales with marketing
– From the outside it seems that KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 can leverage the sales team experience to cultivate customer relationships as KLABIN S/A UNT N2 is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, KLABIN S/A UNT N2 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. KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 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.
Lack of clear differentiation of KLABIN S/A UNT N2 products
– To increase the profitability and margins on the products, KLABIN S/A UNT N2 needs to provide more differentiated products than what it is currently offering in the marketplace.
KLABIN S/A UNT N2 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of KLABIN S/A UNT N2 are -
Building a culture of innovation
– managers at KLABIN S/A UNT N2 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.
Learning at scale
– Online learning technologies has now opened space for KLABIN S/A UNT N2 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, KLABIN S/A UNT N2 is facing challenges because of the dominance of functional experts in the organization. KLABIN S/A UNT N2 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.
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 KLABIN S/A UNT N2 in the Paper & Paper Products industry. Now KLABIN S/A UNT N2 can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, KLABIN S/A UNT N2 can use these opportunities to build new business models that can help the communities that KLABIN S/A UNT N2 operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Manufacturing automation
– KLABIN S/A UNT N2 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for KLABIN S/A UNT N2 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.
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. KLABIN S/A UNT N2 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects KLABIN S/A UNT N2 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– KLABIN S/A UNT N2 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
– KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 to build a competitive advantage using analytics. The analytics driven competitive advantage can help KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 to increase its market reach. KLABIN S/A UNT N2 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
– KLABIN S/A UNT N2 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.
Threats KLABIN S/A UNT N2 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of KLABIN S/A UNT N2 are -
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. KLABIN S/A UNT N2 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, KLABIN S/A UNT N2 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.
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 KLABIN S/A UNT N2.
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 KLABIN S/A UNT N2 in the Paper & Paper Products sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. KLABIN S/A UNT N2 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for KLABIN S/A UNT N2 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.
Environmental challenges
– KLABIN S/A UNT N2 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. KLABIN S/A UNT N2 can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
High dependence on third party suppliers
– KLABIN S/A UNT N2 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.
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 KLABIN S/A UNT N2 business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 prominent markets.
Shortening product life cycle
– it is one of the major threat that KLABIN S/A UNT N2 is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on KLABIN S/A UNT N2 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. KLABIN S/A UNT N2 needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Weighted SWOT Analysis of KLABIN S/A UNT N2 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 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 KLABIN S/A UNT N2 needs to make to build a sustainable competitive advantage.
