Where Do We Want to Be and How Do We Get There - Case Study Example

Strategic Marketing Plan of Stora Enso Ojy Introduction Crafting and implementing strategies for a business entity is imperative to its success and even mere survival (Thomson 2002). A firm should be able to design and put in place a set of well crafted strategies in every functional area and activity in order to attain its goals. In fact, a company should back its objectives with the appropriate strategies. Marketing strategies are essential in maximizing the performance and profitability of a company. Philip Kotler (2001), regarded as one of the world’s marketing guru defined marketing strategy as “the marketing logic by which the business unit hopes to achieve its marketing objectives.” A marketing strategy significantly involves “specific strategies for target markets, positioning, the marketing mix and the marketing expenditure levels (Kotler 2001).” Each of the areas of the marketing strategy should be crafted so as to complement each other. This paper will craft a marketing strategy for Stora Enso by understanding the company’s objectives. The first part will introduce Stora Enso by a brief corporate profile. In order to asses the efficient marketing strategies to be utilized, the next section will identify strategic marketing objectives using management tools after which specific strategies will be developed. The paper will then discuss the implementation plan of the strategy. This report will conclude with its specific findings and further recommendations. An appendix showing the company’s thrusts in sustainable operation and marketing is presented. Company Profile Stora Enso is an international wood products company which is engaged in the provision of customer-focused solutions to industry and trade internationally. Stora Enso is basically a Finnish-Swedish pulp and paper manufacturer which was the product of the merger between Swedish mining and forestry products company Stora and Finish forestry products company Stora. The company’s broad product line ranges from sawn softwood to top-class multicolor printing paper. Stora Enso’s comprehensive selection includes publication papers, graphic products, office papers, packaging boards, specialty papers, pulp, timber, forest and other specialty products. The company currently employs 45, 000 employees and is recognized as the fifth largest pulp and paper manufacturer in terms of revenue (Wikipedia 2006). Strategic Marketing Objectives The starting point of crafting an efficient and appropriate strategy for Stora Enso is the formulation of the marketing strategic objectives that the company wants to achieve. It is after defining the concrete and specific objectives that the company can begin crafting a strategy. An important thing to note when setting objectives is that goals should be specific, measurable, achievable, relevant, and time-bounded (SMART). Strategic marketing objectives are often generated by running an assessment through the utilization of different marketing tools. One of these important tools is the Ansoff Matrix which is usually employed by marketers who have objectives for growth. The Ansoff Matrix offers four strategic choices to achieve objectives: 1. Market penetration which occurs when a company enters or penetrates a market with its current products; 2. Market development which occurs when the company’s current products are marketed to a new segment; 3. Product development which occurs when a firm with a market for its current products embarks on a strategy of developing other products catering to the existing market; and 4. Diversification which occurs when a company develops new products for a new target market. The main strategic marketing objective of Stora Enso is to increase the size of the company’s operation in the growing markets in China, South America, and Russia during 2006. This main objective can be subdivided according to the markets targeted. Objective 1: Increase Stora Enso’s revenue in China by 4.8% annually. China is fastest growing market segment in the Asian and global market. The country’s demand for paper and paperboard is growing at a rapid annual rate of 4.8% (Korhonen 2005). Stora Enso wants to take advantage of this rapid growth by employing a product development strategy which will allow the company by offering more innovative products to the existing customers. Another key strategy which can be employed by Stora Enso is cost leadership strategy as the Chinese market is basically price sensitive. Objective 2: Increase Stora Enso’s revenue in Russia by 3.2% annually It is estimated that demand for paper and paperboard in Russia is expanding at 3.2% annual rate (Korhonen 2005). Stora Enso wants to take advantage of this growth by employing a market penetration strategy. Objective 3: Increase Stora Enso’c revenue in South America by 3.0% annually. The market for paper and paperboard in South America grows at an annual rate of 3.8% (Korhonen 2005). Stora Enso will take advantage of this marketing opportunity by utilizing a market penetration strategy. Implementation Stora Enso has an organizational structure which is decentralized to allow each regional unit to become independent in its operation. This also allows each business unit to make decisions based on the market it is catering to. Therefore, the implementation of the marketing strategies in the each geographical region is unique and should be taken individually. China: The implementation of the product development and low cost strategy in China will be led by Kenneth Nysten, the country’s head. Market research by China’s marketing department in order to ascertain the products which would be marketed in the current market is imperative. South America: Like China, operations in South America will be independent from the headquarters. Financing of the new marketing strategy will be provided by the regional unit for control purposes. As opposed to the market strategy to be implemented in China, the South American region should focus on aggressive promotion of its products and cannibalizing market shares from its competitors to deeply penetrate its existing market. Russia: The implementation strategies to be supported by Russia is the same with South America. However, as Stora Enso is relatively a new player in the Russian market, it should focus more on aggressive marketing and promotion. Control Checks and balances are important in knowing whether the company’s desired outcomes are being met in within the specific time frame set for their accomplishments. The following tools which will act as control variable to be monitored: Sales. As the company’s objective in three geographical regions is focused in increasing sales, the revenue of the company will be closely monitored. Stora Enso should set its quarterly sales target and closely monitor if the company is able to generate the intended level. In doing this, the company should take into account the seasonality of paper and paperboard sales which usually peaked during the fourth quarter. Benchmarking. The company should also closely look at the pulp and paper industry and the major industry players. Stora Enso’s performance is better assessed if the company is going to compare its operations to the larger industry players. Stora Enso should constantly look at the financial and efficiency ratios of its top rivals. It is notable that the company is only the fifth largest manufacturer in terms of revenue. Therefore, there is a lot of room for the company to grow and more competitive in the industry. Budget. Budget is one of the most common forms of tool used to asses if the company is meeting its goals. Stora Enso, like any other company aims to be profitable in its operations. Aside from the growth in revenue, the company should try to minimize its cost and boost its efficiency to reap profits. Thus, budget is used to asses the cost management and efficiency of Stora Enso’s operation. This is in line with the threat of lower paper and paper product prices which can adversely affect manufacturers’ operations. Conclusion The importance of crafting a marketing strategy cannot be overstated. In the case of Stora Enso, maintaining its market in rapidly growing markets is important to survive in the pulp and paper industry. Hence, the main marketing objective of the company is expansion at the same rate as the growth in demand in China, South America, and Russia. These three countries will employ different marketing strategies defined by Ansoff’s matrix: China will utilize a product development strategy while South America and Russia will both pursue deeper market penetration. In order to achieve these objectives, controls should be put in place. This paper recommended the constant monitoring of sales, benchmarking, and budget to ensure that the company is performing as planned. Appendix Stora Enso identifies sustainability as one of its key success factors in its business strategy. The company’s goal goes beyond ensuring superior financial performance but in building a good image in the area of sustainability. To realize this objective, Stora Enso fosters accountability in its business operations thus creating long-term value on an economically, socially, and environmentally sustainable basis. The achieve this, Stora Enso maintains its transparency and open communication with its stakeholders. Stora Enso’s efforts in sustainable operation were rewarded as the company is recognized one of the most sustainable companies in the world. This section will review the sustainability efforts implemented by Stora Enso and their significance in the company’s operations, specifically in the field of marketing. Afterwards, this will tackle important issues which will be faced in the implementation of its marketing objectives and strategies. Stora Enso manages the company’s sustainability by various management methods such as established sustainability governance, corporate policies and principles, group-level environmental and social targets, sustainability as part of strategic planning, track record in using environmental and OHS management systems, traceability and forest certification systems, and systematic CSR unit implementation, sustainability integrated into all corporate training programmes, customer support on sustainability, sustainable supply chain management, including sustainability requirements and enforcement systems, accountability through third-party assurance of Group-level reporting and verification of unit-specific EMAS statements of Environmental Management, sustainability integrated into Stora Enso Business Excellence Guidelines (Stora Enso 2005). Raw Materials and Suppliers As a producer of paper and paper board products, Stora Enso strives to use inputs which are not hazardous and reduces pollution in the environment. The company’s fibre acceptability target for 2004-2005 has considerably increased the total percentage of roundwood, chips, sawdust, and pulp covered by traceability systems to 98% in 2005 and a goal of 100% this year. It should also be noted that recovered paper now constitutes 18% of the fibre used by Stora Enso (Stora Enso 2005). Environmental Sustainability The company’s thrusts in promoting environmental sustainability are concentrated in controlling air emissions, water discharges, residuals and resources, and environmental liabilities. Stora Enso has a huge investment in rebuilding a boiler to reduce emission of hazardous gases. The firm also looks into increasing the capacity of its waste water treatment plant as well as utilizing sawdust in sludge dewatering presses to reduce polymer use. The company is also allocating funds in order to accommodate the anticipated corporate environmental liabilities (Stora Enso 2005). Social Responsibility The company’s social responsibility is manifested in its effort to care for its employees by giving them freedom of expression and bargaining power and focusing on employee’s safety. Markets Stora Enso practices sustainability in marketing. The company is involved in the provision of products which have significant features like safety and recyclability. The main material that the company uses for their production is wood, a renewable natural resource. Aside from that, it can be noted that at the end of their life cycle, Stora Enso’s products can be recycled and utilized for other products. Safety is a priority in the producing paper and paperboards (Stora Enso 2005). Customers are treated as the company’s life blood. Stora Enso recognized the need of satisfying customers and providing them with the value they desired. The firm conducts customer satisfaction surveys to ascertain their needs (Stora Enso 2005) . Investors Sustainability also involves maximizing shareholder value. As such, Stora Enso attends regular meetings with the financial community providing them with adequate information to minimize investors’ risk and diminish share’s volatility (Stora Enso 2005). The aforementioned sustainability thrusts of Stora Enso are significant issues which it should continue to consider in attaining its marketing objectives. It should be noted that all the programmes developed and put in place by Stora Enso to ensure sustainability is an essential factor in attaining its strategic marketing objectives. Increases in revenue are often backed by ensuring that all the aspects of the company from production to reporting procedures to stockholders are efficient. As the group puts it “Sustainability supports profitability.” References Achtmeyer, W., 2001, Stora Enso North America, Available at http://mba.tuck.dartmouth.edu/cgl/downloads/20001_StoraEnso.pdf Karmala, J, 2003, Responsibility and Performance, Available at http://www.storaenso.com/CDAvgn/showDocument/694,1,Stora Enso’s Key Strategic Issues Korhonen, K., 2005, Focus on the Future, Available at http://www.storaenso.com/CDAvgn/showDocument/283,1,Slide 1 Kotler, P. & Armstrong, G. 2001, Principles of Marketing, Prentice Hall International, Inc., New Jersey Stora Enso, 2005. Sustainability 2005, Available at http://www.storaenso.com Thomson, R. & Strickland A.J. 2002, Strategic Management, McGraw-Hill, New York Wikipedia, 2006, Product-Market Growth Matrix, Available at http://en.wikipedia.org/wiki/Product-Market_Growth_Matrix Wikipedia, 2006, Stora Enso, Available at http://en.wikipedia.org/wiki/Stora_Enso Read More