Domtar Corporation Limited - Term Paper Example

Domtar Corporation Limited Company Overview Domtar Corporation (Domtar) is a company that is located in North America and deals with production and marketing of uncoated freesheet paper, papergrade, specialty pulp, as well as fluff. It is the second largest dealer of uncoated freesheet in the world. Initially it was referred to as Dominion Tar and Chemical Company Limited before buying Howard Smith Paper Mills in 1919. It was after this that Dominion Tar and Chemical limited changed its name to Domtar. Domtar manufactures quite a wide range of paper product, which it trades to different consumers inclusive but not, limited to retailers, printers, publishers, merchants, and stationers. Additionally the company owns and is responsible of overseeing the distribution of its products by Domtar Distribution Group. Domtar is also responsible of designing, manufacturing, and marketing of different brands of paper inclusive of sandpiper, Opaque Ultra and Husky Opaque. Currently, Domtar offers employment to over 10,000 people. Its headquarters is located in Montreal and has over 80 paper storage and distribution facilities that are located within North America. However, the center for its operations is located in South Carolina. The company is worth over 700 billion dollars. This paper focuses on the management of Domtar by making use of the SWOT analysis. Additionally, the internal and external stakeholders of Domtar will be identified, their needs and wants, and how the company is fulfilling the needs of the stakeholders. SWOT Analysis of Domtar The Domtar SWOT analysis will provide an insight on the management and other business operation carried out by Domtar. SWOT stands for the strengths or aspects in which Domtar has been faring well. W stands for weaknesses or areas that Domtar require to improve to enable it become more successful. O is for the opportunities that Domtar can exploit to increase its productivity. T is for the threats that Domtar is facing. Analyzing the weaknesses, strengths, opportunities and threats of Domtar will help establish the parts that are most relevant to consider when deciding whether or not to invest in the company. Strengths One of the major strengths that has seen Domtar flourish is the effective communication between the management and the other stakeholders. Another advantage is its popularity, which has made it gain numerous customers globally. Additionally, Domtar has successfully managed to manage its costs effectively such that they are able to spend less but earn much. Domtar has up to date technology. It has some of the latest machineries, which makes its operations easy but successful. A good example is the power generating machineries such as steam turbines, which greatly helps in reducing the production costs (Pump Industry Analyst, 2009). An additional Domtar’s strength is the great capability to recycle it byproducts. Domtar recycles almost all the byproducts such as paper and gypsum. This has enable Domtar maximize on it resources. Additionally, it has enabled Domtar to be recognized as a sustainable dealer with forest products. An additional strength is the strong existing relationship between Domtar and its stakeholders. A good example is with the environmentalists, who are often opposed to operation of paper dealers. However, the strong relationship between Domtar and environmental groups has made it manage to operate without much criticism (Pump Industry Analyst, 2009). Weaknesses One of the challenge hence weakness facing Domtar is the low number of shares in the market. Additionally, Domtar lacks a strong reputation considering that it is the second largest dealer of paper and paper products Opportunities Domtar has an opportunity to expand its market globally due to the emerging markets. An additional opportunity that Domtar can take advantage of is the chance to diversify its products. From its initial stages, Domtar focuses on pulp and paper products. It thus has the opportunity to expand its operations and start dealing with other wood products. Due to the declining wood availability, the price of wood products, one of the being paper are likely to get higher. This will help boost the Domtar’s income. Threats One of the major threats facing Domtar is competition. Though it has been in existence for quite a long period, Domtar is currently facing competition due to the increasing number of paper dealers. Additionally, Domtar is frequently faced by price wars. This occurs when rival companies alter their prices to be too low such that Domtar is forced to sell its products and a considerably low price. This is dangerous since it makes it hard for Domtar to cater for the production costs and still make profits from its operations. Domtar’s Internal and External Stakeholders Stakeholders are the people affected by the operations of a firm. These may include persons who are in no contact with the company but benefit from the products or services of the firm. Paper is one of the most widely used products in the world. The products of a paper industry are likely to be used by almost anyone. The internal stakeholders are mainly the people or groups that work directly with Domtar. On the other hand, external stakeholders are the people who are affected by the operations of Domtar, either directly or indirectly. The internal stakeholders include the Domtar’s employees. The employees range from those involved in harvesting of the raw materials from the forests to the distributers. Employees are very crucial in operations of any corporation since it is through their efforts that operations are able to run smoothly. The external stakeholders are mainly environmental groups that are opposed to unsustainable use of forest resources. Environmental groups that are concerned with the operations of Domtar include Forest Stewardship Council (FSC), a non-governmental organization concerned with certifying corporations that deal with forest materials for good forest management. Rainforest Alliance is another stakeholder of Domtar. Rainforest Alliance is an organization that enhances sustainable use of forest products. It is Domtar’s stakeholder in that the two have formed a collaboration in which Rainforest Alliance ensures that Domtar abides to its commitment to sustainable use of forest materials (Domtar, Partners and Alliances, 2012; SmartWood Forest Management, 2007). Recyclebank is another collaborator and stakeholder of Domtar. This non-governmental organization concerns itself with ensuring that corporations take the initiative of making the planet a better place. The organization also helps create awareness on the need for paper users or consumers to make appropriate use of paper without wasting. World Wildlife Fund is another non-governmental organization that closely watches the operations of Domtar. The organization dedicates itself to ensuring that Domtar participates in the initiate to preserve the environment by involving Domtar in its conservation activities (Domtar, Partners and Alliances, 2012). Other external stakeholders are the users a of Domtar’s products who include small-scale publishers and printers, stationers just to mentions but a few. The external users are quite several since they include persons within and without North America who make use of the products made from fiber by Domtar. These include anyone who buys books manufactured using paper from Domtar. Another stakeholder is the government. The government is responsible of ensuring that the operations of Domtar follow set regulations. Customers are the next stakeholders. The customers range from the chief distributers to individuals who benefit from the products made by Domtar. These include publishers, printers just to mention but a few. Almost every person can be part of Domtar’s customer since materials such as books make use of products from paper industry (Domtar, 2009). The Wants and Needs of the Stakeholders The needs of the Domtar’s stakeholders vary. The major need of the Domtar’s employees is secure working environment in addition to apposite compensation for their services. Environmentalists who are mainly non-governmental organization are mainly concerned with the proper utilization of forest resource in addition to minimized pollution. Environmentalists require that Domtar engage itself with activities that help rehabilitate the forest as well as the environment to reduce the grave impacts associated with large scale harvesting of trees. Additionally, the paper industries cause a lot of pollution and Domtar is required to dedicate itself to operation that help clean up the environment (Domtar, 2009; Domtar, Partners and Alliances, 2012). The government is another stakeholder that requires Domtar to abide to the laws and regulation that govern operation of companies within Canada. Additionally, the government demands that Domtar keeps appropriate record of its operations and financial transactions to ensure that it pays the accurate taxes. The Canadian government requires that Domtar keep up with the technology to avoid wastage of raw materials by ensuring that some waste materials are recycled (Walker, 2011). Ways in Which Domtar Is Meeting the Needs of Its Stakeholders One of the main objectives of Domtar is to benefit and satisfy its stakeholders. The main stakeholders are its employees, the customers, shareholders as well as any other individual concerned about Domtar operations. They do so through proper management of finances to ensure that the shareholders benefit from the profits made. Additionally, Domtar ensures that it makes use of available resources such as the raw materials appropriately to avoid unnecessary wastes. Domtar operations are sensitive since they entail cutting down of trees, which leads to a lot of scrutiny particularly from environmental activists (Domtar, 2009; SmartWood Forest Management, 2007). However, Domtar has considerably managed to overcome this challenge by ensuring that it addresses the grievances of environmentalists, one of the major external stakeholders. Domtar has done this by ensuring its activities are sustainable and of high quality, reducing the negative impacts its operations has on the environment. Additionally, Domtar has entered into partnership with environmental organizations that provide advice on how Domtar can operate without causing grave impacts on the environment. This has enabled Domtar gain the confidence of its stakeholders (Pump Industry Analyst, 2009; (SmartWood Forest Management, 2007). Domtar has committed itself to work together with forest conservers in ensuring that they embrace sustainable practices. This is mainly by following the international standards regarding forest resources. This ensures that the harvesting of trees is done appropriately. Additionally, the international principle provides guidelines on how Domtar should dispose of the waste products to reduce pollution (Domtar, 2009). To ensure that it customers are satisfied, Domtar focus on producing quality products. They do so by ensuring that they employ qualified employees. Additionally, they make use of quality technology to ensure that they produce the best. Moreover, Domtar carries out frequent assessment of the needs of the customers through its website as well as by asking the customer themselves. This helps them to make changes on their products to match the changing needs of their clients. In addition, Domtar carries out promotions as well as advertisements to create awareness of their products to the customers. Additionally, they have well established chain from production to distribution to ensure that customers can always access their products (Domtar, 2009). In case of the employees, Domtar ensures that they are properly compensated in addition to ensuring that the set ethics are followed. Moreover, Domtar always ensures that the working conditions for the employees are safe and the machineries are in good shape. The company conducts frequent checks to ensure that the working conditions are appropriate and ensure that the health as well as safety management measures are functional. Additionally, the management respects and concerns itself with the views of the employees as well as other organizations or individuals. However, the employees must remain accountable and committed to the company’s mission of sustainable paper production (SmartWood Forest Management, 2007). As much as Domtar strives to meet the needs of its clients, it still receives criticism from entities especially over waste disposal. One such instance happened when waste from Domtar ended up in waterways resulting in death of aquatic organisms such as fish. This resulted in a lot of criticism particularly form the world life conservers (Domtar, 2009; Walker, 2011). Recommendations To ensure that it retains its position as the second largest paper dealer, there is need for Domtar to engage more in community activities. These should include cleanup activities to ensure that they compensate for the great impacts that result from their operations (SmartWood Forest Management, 2007).Additionally, Domtar should expand its operations to other regions of the world since it is currently only in North America irrespective of its great capacity of expanding globally. Advertisement would also help Domtar enlighten people on their products. Conclusion Domtar Corporation is a company that deals with manufacture and marketing of paper and other products processed from trees. It is ranked as the largest paper dealer in North America and the second largest worldwide. Domtar is advantaged in that it has enough finances to fund its operations in addition to the good relationship with its stakeholders. Domtar’s commitment to engage in sustainable harvesting and use of raw material has helped it gain confidence from environmentalists who are often concerned with operations of paper dealers. Irrespective of the excellent performance, Domtar remains quite unpopular and it is thus important for it to advertise its products more. Other Domtar stakeholders include its employees, customers as well as the government. To ensure that the stakeholders benefit from its operations, Domtar has committed itself to ensuring that they conserve the environment in addition to maximizing its utilization on the raw materials. Additionally, Domtar dedicates itself to ensuring that the employees work in healthy and safe environment. References Domtar to reconfigure Plymouth mill to 100% fluff pulp production. (2009). Pump Industry Analyst, 2009(10), 2. Doi: 10.1016/S1359-6128(09)70392-1 Domtar. (2009). Statement on Sustainable Growth. Retrieved Sep 11, 2012, from http://www.domtar.com/en/corporate/ethics/2377.asp Domtar. (2012). Partners and Alliances. Retrieved Sep 11, 2012, from http://www.domtar.com/en/paper-earthchoice/partners-and-alliances.asp Management, S. F. (2007). Forest Management 2007 Annual audit Report For; The Spanish Forest Managed by Domtar. Ontario: SmartWood. Walker, M. (2011). 2011 AnnuAl Report. Arkansas: Domtar. Read More