Schweitzer-Mauduit (SWM) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Schweitzer-Mauduit (United States)
Based on various researches at Oak Spring University , Schweitzer-Mauduit is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, geopolitical disruptions, increasing transportation and logistics costs, increasing energy prices, there is backlash against globalization, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Schweitzer-Mauduit
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Schweitzer-Mauduit can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Schweitzer-Mauduit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Schweitzer-Mauduit 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 Schweitzer-Mauduit can be done for the following purposes –
1. Strategic planning of Schweitzer-Mauduit
2. Improving business portfolio management of Schweitzer-Mauduit
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 Schweitzer-Mauduit
Strengths of Schweitzer-Mauduit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Schweitzer-Mauduit are -
Low bargaining power of suppliers
– Suppliers of Schweitzer-Mauduit in the Basic Materials sector have low bargaining power. Schweitzer-Mauduit has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Schweitzer-Mauduit to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Schweitzer-Mauduit is one of the leading players in the Paper & Paper Products 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.
High brand equity
– Schweitzer-Mauduit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Schweitzer-Mauduit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Schweitzer-Mauduit 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 Schweitzer-Mauduit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Schweitzer-Mauduit emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Schweitzer-Mauduit is present in almost all the verticals within the Paper & Paper Products industry. This has provided Schweitzer-Mauduit 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.
High switching costs
– The high switching costs that Schweitzer-Mauduit 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.
Organizational Resilience of Schweitzer-Mauduit
– The covid-19 pandemic has put organizational resilience at the centre of everthing Schweitzer-Mauduit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Paper & Paper Products industry
– Schweitzer-Mauduit has clearly differentiated products in the market place. This has enabled Schweitzer-Mauduit to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Schweitzer-Mauduit to invest into research and development (R&D) and innovation.
Innovation driven organization
– Schweitzer-Mauduit is one of the most innovative firm in Paper & Paper Products sector.
Cross disciplinary teams
– Horizontal connected teams at the Schweitzer-Mauduit 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.
Strong track record of project management in the Paper & Paper Products industry
– Schweitzer-Mauduit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Schweitzer-Mauduit 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.
Weaknesses of Schweitzer-Mauduit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Schweitzer-Mauduit are -
Ability to respond to the competition
– As the decision making is very deliberative at Schweitzer-Mauduit, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Schweitzer-Mauduit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Schweitzer-Mauduit supply chain. Even after few cautionary changes, Schweitzer-Mauduit is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Schweitzer-Mauduit vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Schweitzer-Mauduit is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Schweitzer-Mauduit needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Schweitzer-Mauduit to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
Lack of clear differentiation of Schweitzer-Mauduit products
– To increase the profitability and margins on the products, Schweitzer-Mauduit needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Schweitzer-Mauduit 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.
High bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in United States, Schweitzer-Mauduit is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Paper & Paper Products industry.
Interest costs
– Compare to the competition, Schweitzer-Mauduit 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.
Skills based hiring in Paper & Paper Products industry
– The stress on hiring functional specialists at Schweitzer-Mauduit 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.
Slow to strategic competitive environment developments
– As Schweitzer-Mauduit is one of the leading players in the Paper & Paper Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Paper & Paper Products industry in last five years.
High operating costs
– Compare to the competitors, Schweitzer-Mauduit 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 Schweitzer-Mauduit lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Schweitzer-Mauduit, 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.
Schweitzer-Mauduit Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Schweitzer-Mauduit are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Schweitzer-Mauduit 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Schweitzer-Mauduit 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 Schweitzer-Mauduit to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Schweitzer-Mauduit 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.
Creating value in data economy
– The success of analytics program of Schweitzer-Mauduit has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Schweitzer-Mauduit to build a more holistic ecosystem for Schweitzer-Mauduit products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Schweitzer-Mauduit is facing challenges because of the dominance of functional experts in the organization. Schweitzer-Mauduit 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Schweitzer-Mauduit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Schweitzer-Mauduit to increase its market reach. Schweitzer-Mauduit 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.
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 Schweitzer-Mauduit 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.
Building a culture of innovation
– managers at Schweitzer-Mauduit 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.
Leveraging digital technologies
– Schweitzer-Mauduit can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Schweitzer-Mauduit 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.
Manufacturing automation
– Schweitzer-Mauduit 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.
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. Schweitzer-Mauduit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Schweitzer-Mauduit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Schweitzer-Mauduit 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. Schweitzer-Mauduit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Schweitzer-Mauduit
– 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 Schweitzer-Mauduit.
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.
Environmental challenges
– Schweitzer-Mauduit 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. Schweitzer-Mauduit 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, Schweitzer-Mauduit 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 Schweitzer-Mauduit prominent markets.
High dependence on third party suppliers
– Schweitzer-Mauduit 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.
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. Schweitzer-Mauduit 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Schweitzer-Mauduit 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Schweitzer-Mauduit in Paper & Paper Products industry. The Paper & Paper Products industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Schweitzer-Mauduit 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 Schweitzer-Mauduit.
Shortening product life cycle
– it is one of the major threat that Schweitzer-Mauduit is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Schweitzer-Mauduit Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Schweitzer-Mauduit 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 Schweitzer-Mauduit 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 Schweitzer-Mauduit 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 Schweitzer-Mauduit 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 Schweitzer-Mauduit needs to make to build a sustainable competitive advantage.