Based on various researches at Oak Spring University , Rayonier Advanced Materials is operating in a macro-environment that has been destablized by – increasing energy prices, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Rayonier Advanced Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Rayonier Advanced Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rayonier Advanced Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rayonier Advanced Materials 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 Rayonier Advanced Materials can be done for the following purposes –
1. Strategic planning of Rayonier Advanced Materials
2. Improving business portfolio management of Rayonier Advanced Materials
3. Assessing feasibility of the new initiative in United States
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rayonier Advanced Materials
Strengths of Rayonier Advanced Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rayonier Advanced Materials are -
Successful track record of launching new products
– Rayonier Advanced Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rayonier Advanced Materials 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.
Training and development
– Rayonier Advanced Materials 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.
Highly skilled collaborators
– Rayonier Advanced Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemical Manufacturing industry. Secondly the value chain collaborators of Rayonier Advanced Materials have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Rayonier Advanced Materials is one of the leading players in the Chemical Manufacturing industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Rayonier Advanced Materials 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 Rayonier Advanced Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Rayonier Advanced Materials emphasize – knowledge, initiative, and innovation.
Analytics focus
– Rayonier Advanced Materials 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 Chemical Manufacturing industry. The technology infrastructure of United States 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.
Innovation driven organization
– Rayonier Advanced Materials is one of the most innovative firm in Chemical Manufacturing sector.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Rayonier Advanced Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rayonier Advanced Materials 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.
Superior customer experience
– The customer experience strategy of Rayonier Advanced Materials in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Rayonier Advanced Materials
– The covid-19 pandemic has put organizational resilience at the centre of everthing Rayonier Advanced Materials does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Rayonier Advanced Materials 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.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Rayonier Advanced Materials has clearly differentiated products in the market place. This has enabled Rayonier Advanced Materials to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Rayonier Advanced Materials to invest into research and development (R&D) and innovation.
Weaknesses of Rayonier Advanced Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rayonier Advanced Materials are -
Low market penetration in new markets
– Outside its home market of United States, Rayonier Advanced Materials needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Rayonier Advanced Materials 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.
No frontier risks strategy
– From the 10K / annual statement of Rayonier Advanced Materials, it seems that company is thinking out the frontier risks that can impact Chemical Manufacturing 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 Rayonier Advanced Materials strategy
– From the outside it seems that the employees of Rayonier Advanced Materials 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 Chemical Manufacturing industry, Rayonier Advanced Materials 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.
Lack of clear differentiation of Rayonier Advanced Materials products
– To increase the profitability and margins on the products, Rayonier Advanced Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Rayonier Advanced Materials 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.
High dependence on Rayonier Advanced Materials ‘s star products
– The top 2 products and services of Rayonier Advanced Materials still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Rayonier Advanced Materials has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Rayonier Advanced Materials is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Rayonier Advanced Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rayonier Advanced Materials to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Rayonier Advanced Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemical Manufacturing industry have deep experience in developing customer relationships. Marketing department at Rayonier Advanced Materials can leverage the sales team experience to cultivate customer relationships as Rayonier Advanced Materials is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rayonier Advanced Materials is slow explore the new channels of communication. These new channels of communication can help Rayonier Advanced Materials to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Rayonier Advanced Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Rayonier Advanced Materials are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rayonier Advanced Materials is facing challenges because of the dominance of functional experts in the organization. Rayonier Advanced Materials can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Rayonier Advanced Materials to increase its market reach. Rayonier Advanced Materials 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.
Creating value in data economy
– The success of analytics program of Rayonier Advanced Materials has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Rayonier Advanced Materials to build a more holistic ecosystem for Rayonier Advanced Materials products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Rayonier Advanced Materials can develop new processes and procedures in Chemical Manufacturing 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, Rayonier Advanced Materials can use these opportunities to build new business models that can help the communities that Rayonier Advanced Materials operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Using analytics as competitive advantage
– Rayonier Advanced Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Rayonier Advanced Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rayonier Advanced Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rayonier Advanced Materials 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rayonier Advanced Materials 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. Rayonier Advanced Materials 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rayonier Advanced Materials 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 Rayonier Advanced Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Rayonier Advanced Materials can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.
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. Rayonier Advanced Materials can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Rayonier Advanced Materials can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rayonier Advanced Materials 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 Rayonier Advanced Materials to hire the very best people irrespective of their geographical location.
Threats Rayonier Advanced Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Rayonier Advanced Materials are -
Technology acceleration in Forth Industrial Revolution
– Rayonier Advanced Materials has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Rayonier Advanced Materials needs to keep up with the evolution of technology in the Chemical Manufacturing 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
– Rayonier Advanced Materials 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 Chemical Manufacturing industry regulations.
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.
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 Rayonier Advanced Materials.
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. Rayonier Advanced Materials 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.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rayonier Advanced Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Rayonier Advanced Materials 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. Rayonier Advanced Materials can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Shortening product life cycle
– it is one of the major threat that Rayonier Advanced Materials is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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, Rayonier Advanced Materials 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 Rayonier Advanced Materials prominent markets.
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. Rayonier Advanced Materials needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rayonier Advanced Materials in Chemical Manufacturing industry. The Chemical Manufacturing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Rayonier Advanced Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
Weighted SWOT Analysis of Rayonier Advanced Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Rayonier Advanced Materials 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 Rayonier Advanced Materials 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 Rayonier Advanced Materials 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 Rayonier Advanced Materials 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 Rayonier Advanced Materials needs to make to build a sustainable competitive advantage.