KLABIN S/A ON N2 (KLBN3) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for KLABIN S/A ON N2 (Brazil)
Based on various researches at Oak Spring University , KLABIN S/A ON N2 is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KLABIN S/A ON N2 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KLABIN S/A ON 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 ON 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 ON N2 can be done for the following purposes –
1. Strategic planning of KLABIN S/A ON N2
2. Improving business portfolio management of KLABIN S/A ON 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 ON N2
Strengths of KLABIN S/A ON N2 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of KLABIN S/A ON N2 are -
Superior customer experience
– The customer experience strategy of KLABIN S/A ON N2 in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– KLABIN S/A ON N2 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 switching costs
– The high switching costs that KLABIN S/A ON N2 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.
Analytics focus
– KLABIN S/A ON N2 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 Brazil 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.
Operational resilience
– The operational resilience strategy of KLABIN S/A ON 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.
Strong track record of project management in the Paper & Paper Products industry
– KLABIN S/A ON N2 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of KLABIN S/A ON N2
– The covid-19 pandemic has put organizational resilience at the centre of everthing KLABIN S/A ON N2 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– KLABIN S/A ON N2 is one of the leading players in the Paper & Paper Products industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– KLABIN S/A ON N2 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. KLABIN S/A ON 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.
Innovation driven organization
– KLABIN S/A ON N2 is one of the most innovative firm in Paper & Paper Products sector.
Sustainable margins compare to other players in Paper & Paper Products industry
– KLABIN S/A ON N2 has clearly differentiated products in the market place. This has enabled KLABIN S/A ON 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 ON N2 to invest into research and development (R&D) and innovation.
Ability to lead change in Paper & Paper Products
– KLABIN S/A ON 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 ON N2 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of KLABIN S/A ON N2 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KLABIN S/A ON N2 are -
Compensation and incentives
– The revenue per employee of KLABIN S/A ON 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.
No frontier risks strategy
– From the 10K / annual statement of KLABIN S/A ON 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.
Products dominated business model
– Even though KLABIN S/A ON N2 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. KLABIN S/A ON N2 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 Brazil, KLABIN S/A ON 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.
Aligning sales with marketing
– From the outside it seems that KLABIN S/A ON 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 ON N2 can leverage the sales team experience to cultivate customer relationships as KLABIN S/A ON N2 is planning to shift buying processes online.
High cash cycle compare to competitors
KLABIN S/A ON N2 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.
Interest costs
– Compare to the competition, KLABIN S/A ON 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.
Workers concerns about automation
– As automation is fast increasing in the Paper & Paper Products industry, KLABIN S/A ON N2 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, KLABIN S/A ON N2 is slow explore the new channels of communication. These new channels of communication can help KLABIN S/A ON N2 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.
High dependence on KLABIN S/A ON N2 ‘s star products
– The top 2 products and services of KLABIN S/A ON 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 ON N2 has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at KLABIN S/A ON N2, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. KLABIN S/A ON N2 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
KLABIN S/A ON N2 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of KLABIN S/A ON N2 are -
Low interest rates
– Even though inflation is raising its head in most developed economies, KLABIN S/A ON N2 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for KLABIN S/A ON N2 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 KLABIN S/A ON N2 to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for KLABIN S/A ON 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.
Better consumer reach
– The expansion of the 5G network will help KLABIN S/A ON N2 to increase its market reach. KLABIN S/A ON 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.
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 ON N2 can use these opportunities to build new business models that can help the communities that KLABIN S/A ON N2 operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects KLABIN S/A ON N2 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. KLABIN S/A ON N2 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. KLABIN S/A ON N2 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.
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 KLABIN S/A ON N2 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. KLABIN S/A ON N2 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, KLABIN S/A ON N2 is facing challenges because of the dominance of functional experts in the organization. KLABIN S/A ON 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.
Loyalty marketing
– KLABIN S/A ON N2 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.
Learning at scale
– Online learning technologies has now opened space for KLABIN S/A ON 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.
Creating value in data economy
– The success of analytics program of KLABIN S/A ON N2 has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help KLABIN S/A ON N2 to build a more holistic ecosystem for KLABIN S/A ON N2 products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats KLABIN S/A ON N2 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of KLABIN S/A ON N2 are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents KLABIN S/A ON N2 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.
Technology acceleration in Forth Industrial Revolution
– KLABIN S/A ON N2 has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, KLABIN S/A ON N2 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.
Regulatory challenges
– KLABIN S/A ON N2 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.
Consumer confidence and its impact on KLABIN S/A ON 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.
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 ON 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.
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 ON 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.
Stagnating economy with rate increase
– KLABIN S/A ON N2 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.
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 ON N2 in the Paper & Paper Products sector and impact the bottomline of the organization.
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 ON N2 needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, KLABIN S/A ON 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.
High dependence on third party suppliers
– KLABIN S/A ON 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 ON N2 business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of KLABIN S/A ON 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 ON 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 ON 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 ON 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 ON 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 ON N2 needs to make to build a sustainable competitive advantage.