Asia Paper (2310) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Asia Paper (South Korea)
Based on various researches at Oak Spring University , Asia Paper is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, 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 Asia Paper can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asia Paper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asia Paper 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 Asia Paper can be done for the following purposes –
1. Strategic planning of Asia Paper
2. Improving business portfolio management of Asia Paper
3. Assessing feasibility of the new initiative in South Korea
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Asia Paper
Strengths of Asia Paper | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asia Paper are -
Superior customer experience
– The customer experience strategy of Asia Paper in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Paper & Paper Products industry
- digital transformation varies from industry to industry. For Asia Paper digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Asia Paper 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.
Sustainable margins compare to other players in Paper & Paper Products industry
– Asia Paper has clearly differentiated products in the market place. This has enabled Asia Paper to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Asia Paper to invest into research and development (R&D) and innovation.
Learning organization
- Asia Paper 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 Asia Paper is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Asia Paper emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Paper & Paper Products industry
– Asia Paper 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 brand equity
– Asia Paper has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Asia Paper to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Asia Paper is one of the most innovative firm in Paper & Paper Products sector.
Low bargaining power of suppliers
– Suppliers of Asia Paper in the Basic Materials sector have low bargaining power. Asia Paper has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Asia Paper to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Asia Paper 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 South Korea 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.
Cross disciplinary teams
– Horizontal connected teams at the Asia Paper 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.
Operational resilience
– The operational resilience strategy of Asia Paper 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.
Diverse revenue streams
– Asia Paper is present in almost all the verticals within the Paper & Paper Products industry. This has provided Asia Paper 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.
Weaknesses of Asia Paper | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Asia Paper are -
Lack of clear differentiation of Asia Paper products
– To increase the profitability and margins on the products, Asia Paper needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Asia Paper, 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.
Employees’ less understanding of Asia Paper strategy
– From the outside it seems that the employees of Asia Paper 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.
Workers concerns about automation
– As automation is fast increasing in the Paper & Paper Products industry, Asia Paper 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 Asia Paper is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Asia Paper needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Asia Paper to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
Skills based hiring in Paper & Paper Products industry
– The stress on hiring functional specialists at Asia Paper has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Asia Paper 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.
Ability to respond to the competition
– As the decision making is very deliberative at Asia Paper, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Asia Paper has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Asia Paper ‘s star products
– The top 2 products and services of Asia Paper 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 Asia Paper has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Asia Paper 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. Asia Paper 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Asia Paper is slow explore the new channels of communication. These new channels of communication can help Asia Paper 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.
Asia Paper Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Asia Paper are -
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. Asia Paper can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asia Paper is facing challenges because of the dominance of functional experts in the organization. Asia Paper 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.
Building a culture of innovation
– managers at Asia Paper 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.
Creating value in data economy
– The success of analytics program of Asia Paper has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Asia Paper to build a more holistic ecosystem for Asia Paper products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Asia Paper 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 Asia Paper to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Asia Paper 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, Asia Paper can use these opportunities to build new business models that can help the communities that Asia Paper operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Manufacturing automation
– Asia Paper 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 Asia Paper 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Asia Paper 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 Asia Paper to hire the very best people irrespective of their geographical location.
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 Asia Paper in the Paper & Paper Products industry. Now Asia Paper can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Asia Paper 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.
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. Asia Paper can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Asia Paper External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Asia Paper are -
High dependence on third party suppliers
– Asia Paper 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.
Stagnating economy with rate increase
– Asia Paper 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.
Shortening product life cycle
– it is one of the major threat that Asia Paper is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Asia Paper 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.
Increasing wage structure of Asia Paper
– 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 Asia Paper.
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 Asia Paper 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. Asia Paper needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Asia Paper has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Asia Paper 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.
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 Asia Paper.
Regulatory challenges
– Asia Paper 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.
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 Asia Paper business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Asia Paper 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. Asia Paper 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 Asia Paper Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Asia Paper 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 Asia Paper 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 Asia Paper 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 Asia Paper 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 Asia Paper needs to make to build a sustainable competitive advantage.