Rayonier Advanced Materials Inc. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Rayonier Advanced Materials Inc. managers to do a situational analysis of the organization . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Rayonier Advanced Materials Inc. is facing in its current business environment.

The Rayonier Advanced Materials Inc. is one of the leading firms in its industry. Rayonier Advanced Materials Inc. maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Rayonier Advanced Materials Inc. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Rayonier Advanced Materials Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Rayonier Advanced Materials Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Rayonier Advanced Materials Inc. SWOT Analysis

Strengths of Rayonier Advanced Materials Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Rayonier Advanced Materials Inc. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Rayonier Advanced Materials Inc. are –

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  • Highly successful at Go To Market strategies for its products.
  • Automation of activities brought consistency of quality to Rayonier Advanced Materials Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Free Cash Flow – Rayonier Advanced Materials Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Good Returns on Capital Expenditure – Rayonier Advanced Materials Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • Strong distribution network – Over the years Rayonier Advanced Materials Inc. has built a reliable distribution network that can reach majority of its potential market.
  • Strong Brand Portfolio – Over the years Rayonier Advanced Materials Inc. has invested in building a strong brand portfolio. The SWOT analysis of Rayonier Advanced Materials Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Rayonier Advanced Materials Inc. – Internal Strategic Factors

Weakness are the areas where Rayonier Advanced Materials Inc. can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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  • High attrition rate in work force – compare to other organizations in the industry Rayonier Advanced Materials Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Rayonier Advanced Materials Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Limited success outside core business – Even though Rayonier Advanced Materials Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Rayonier Advanced Materials Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Rayonier Advanced Materials Inc.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

Opportunities for Rayonier Advanced Materials Inc. – External Strategic Factors

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  • Government green drive also opens an opportunity for procurement of Rayonier Advanced Materials Inc. products by the state as well as federal government contractors.
  • The new technology provides an opportunity to Rayonier Advanced Materials Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Rayonier Advanced Materials Inc. an opportunity to enter a new emerging market.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Rayonier Advanced Materials Inc. to increase its profitability.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Rayonier Advanced Materials Inc. in other product categories.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Rayonier Advanced Materials Inc..
  • The market development will lead to dilution of competitor’s advantage and enable Rayonier Advanced Materials Inc. to increase its competitiveness compare to the other competitors.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Rayonier Advanced Materials Inc.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

Threats Rayonier Advanced Materials Inc. Facing - External Strategic Factors

  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Rayonier Advanced Materials Inc.   in those markets.
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Imitation of the counterfeit and low quality product is also a threat to Rayonier Advanced Materials Inc.’s product especially in the emerging markets and low income markets.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Rayonier Advanced Materials Inc.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Rayonier Advanced Materials Inc.
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Rayonier Advanced Materials Inc.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Rayonier Advanced Materials Inc. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Rayonier Advanced Materials Inc.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)