Stora Enso Oyj PK (SEOAY) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Stora Enso Oyj PK (United States)
Based on various researches at Oak Spring University , Stora Enso Oyj PK is operating in a macro-environment that has been destablized by – increasing energy prices, increasing household debt because of falling income levels, increasing commodity prices, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Stora Enso Oyj PK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Stora Enso Oyj PK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stora Enso Oyj PK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stora Enso Oyj PK operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Stora Enso Oyj PK can be done for the following purposes –
1. Strategic planning of Stora Enso Oyj PK
2. Improving business portfolio management of Stora Enso Oyj PK
3. Assessing feasibility of the new initiative in United States
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stora Enso Oyj PK
Strengths of Stora Enso Oyj PK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stora Enso Oyj PK are -
Sustainable margins compare to other players in Paper & Paper Products industry
– Stora Enso Oyj PK has clearly differentiated products in the market place. This has enabled Stora Enso Oyj PK to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Stora Enso Oyj PK to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Stora Enso Oyj PK in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Stora Enso Oyj PK is one of the most innovative firm in Paper & Paper Products sector.
Ability to lead change in Paper & Paper Products
– Stora Enso Oyj PK is one of the leading players in the Paper & Paper Products industry in United States. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in United States but also across the existing markets. The ability to lead change has enabled Stora Enso Oyj PK in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Stora Enso Oyj PK has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stora Enso Oyj PK 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.
High brand equity
– Stora Enso Oyj PK has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stora Enso Oyj PK to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Stora Enso Oyj PK 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.
Operational resilience
– The operational resilience strategy of Stora Enso Oyj PK 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.
Effective Research and Development (R&D)
– Stora Enso Oyj PK has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Stora Enso Oyj PK 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.
Diverse revenue streams
– Stora Enso Oyj PK is present in almost all the verticals within the Paper & Paper Products industry. This has provided Stora Enso Oyj PK 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.
Analytics focus
– Stora Enso Oyj PK is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Paper & Paper Products industry. The technology infrastructure of United 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.
Learning organization
- Stora Enso Oyj PK is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Stora Enso Oyj PK is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Stora Enso Oyj PK emphasize – knowledge, initiative, and innovation.
Weaknesses of Stora Enso Oyj PK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stora Enso Oyj PK are -
Interest costs
– Compare to the competition, Stora Enso Oyj PK 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, Stora Enso Oyj PK 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.
Products dominated business model
– Even though Stora Enso Oyj PK has some of the most successful models in the Paper & Paper Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Stora Enso Oyj PK should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Stora Enso Oyj PK is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Stora Enso Oyj PK needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stora Enso Oyj PK to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
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 Stora Enso Oyj PK supply chain. Even after few cautionary changes, Stora Enso Oyj PK is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stora Enso Oyj PK vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Stora Enso Oyj PK, 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.
Compensation and incentives
– The revenue per employee of Stora Enso Oyj PK 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.
Ability to respond to the competition
– As the decision making is very deliberative at Stora Enso Oyj PK, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Stora Enso Oyj PK has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Stora Enso Oyj PK 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 Stora Enso Oyj PK can leverage the sales team experience to cultivate customer relationships as Stora Enso Oyj PK is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Stora Enso Oyj PK 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. Stora Enso Oyj PK 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.
Employees’ less understanding of Stora Enso Oyj PK strategy
– From the outside it seems that the employees of Stora Enso Oyj PK 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.
Stora Enso Oyj PK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Stora Enso Oyj PK are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Stora Enso Oyj PK can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Stora Enso Oyj PK 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stora Enso Oyj PK can use these opportunities to build new business models that can help the communities that Stora Enso Oyj PK operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Loyalty marketing
– Stora Enso Oyj PK 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.
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. Stora Enso Oyj PK 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 Paper & Paper Products industry, but it has also influenced the consumer preferences. Stora Enso Oyj PK can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Stora Enso Oyj PK 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.
Using analytics as competitive advantage
– Stora Enso Oyj PK has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Paper & Paper Products sector. This continuous investment in analytics has enabled Stora Enso Oyj PK to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stora Enso Oyj PK to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stora Enso Oyj PK 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 Stora Enso Oyj PK to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stora Enso Oyj PK 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 Stora Enso Oyj PK to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stora Enso Oyj PK is facing challenges because of the dominance of functional experts in the organization. Stora Enso Oyj PK 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.
Buying journey improvements
– Stora Enso Oyj PK can improve the customer journey of consumers in the Paper & Paper Products industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Stora Enso Oyj PK 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.
Developing new processes and practices
– Stora Enso Oyj PK 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 Stora Enso Oyj PK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Stora Enso Oyj PK 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.
Consumer confidence and its impact on Stora Enso Oyj PK 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Stora Enso Oyj PK 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Stora Enso Oyj PK 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 Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Stora Enso Oyj PK 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
– Stora Enso Oyj PK needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Stora Enso Oyj PK can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Stora Enso Oyj PK can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Stora Enso Oyj PK 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. Stora Enso Oyj PK needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Stora Enso Oyj PK 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 Stora Enso Oyj PK is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Stora Enso Oyj PK business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Stora Enso Oyj PK.
Technology acceleration in Forth Industrial Revolution
– Stora Enso Oyj PK has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Stora Enso Oyj PK 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.
Weighted SWOT Analysis of Stora Enso Oyj PK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Stora Enso Oyj PK needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Stora Enso Oyj PK is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Stora Enso Oyj PK is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Stora Enso Oyj PK to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Stora Enso Oyj PK needs to make to build a sustainable competitive advantage.
