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 – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, 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 -
High switching costs
– The high switching costs that Stora Enso Oyj PK 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.
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.
Organizational Resilience of Stora Enso Oyj PK
– The covid-19 pandemic has put organizational resilience at the centre of everthing Stora Enso Oyj PK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Low bargaining power of suppliers
– Suppliers of Stora Enso Oyj PK in the Basic Materials sector have low bargaining power. Stora Enso Oyj PK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stora Enso Oyj PK to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Stora Enso Oyj PK 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 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.
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.
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.
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 -
High dependence on Stora Enso Oyj PK ‘s star products
– The top 2 products and services of Stora Enso Oyj PK 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 Stora Enso Oyj PK has relatively successful track record of launching new products.
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.
Lack of clear differentiation of Stora Enso Oyj PK products
– To increase the profitability and margins on the products, Stora Enso Oyj PK needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of United States, Stora Enso Oyj PK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Stora Enso Oyj PK 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Stora Enso Oyj PK has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Paper & Paper Products industry using digital technology.
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.
High operating costs
– Compare to the competitors, Stora Enso Oyj PK has high operating costs in the Paper & Paper Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Stora Enso Oyj PK lucrative customers.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stora Enso Oyj PK is slow explore the new channels of communication. These new channels of communication can help Stora Enso Oyj PK 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.
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 -
Creating value in data economy
– The success of analytics program of Stora Enso Oyj PK has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Stora Enso Oyj PK to build a more holistic ecosystem for Stora Enso Oyj PK products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Stora Enso Oyj PK 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. Stora Enso Oyj PK can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Stora Enso Oyj PK to increase its market reach. Stora Enso Oyj PK 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.
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.
Learning at scale
– Online learning technologies has now opened space for Stora Enso Oyj PK 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.
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 Stora Enso Oyj PK in the Paper & Paper Products industry. Now Stora Enso Oyj PK can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Stora Enso Oyj PK 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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stora Enso Oyj PK can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
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 Stora Enso Oyj PK in the Paper & Paper Products sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Stora Enso Oyj PK 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.
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.
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.
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 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.
Regulatory challenges
– Stora Enso Oyj PK 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.
High dependence on third party suppliers
– Stora Enso Oyj PK 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.
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.
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.
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.