Paperboard Container Industry and Orr Limited SWOT Analysis - Case Study Example

Name Course Tutor Date Individual саsе study of paperboard container industry and Orоrа limited SWOT analysis Content 1.0 Industry service………………………………………………………………… 1.2 Industry description……………………………………………………………. 2.0 Strategic analysis………………………………………………………………. 2.1 Market analysis………………………………………………………………… 2.2.0 Market share…………………………………………………………………… 2.2.1 Orora ltd……………………………………………………………………….. 2.2.2 Pratt ltd…………………………………………………………………………. 2.2.3 Shute ltd………………………………………………………………………… 2.2.4 Color Park ltd…………………………………………………………………… 2.3 Market segmentation…………………………………………………………… 2.4 Market Economics…………………………………………………………….. 3.0. .Product segmentation………………………………………………………… 4.0. Competitive analysis ………………………………………………………….. 5.0 Cost structure…………………………………………………………………… 6.0 Barriers to entry………………………………………………………………… 7.0 International trade………………………………………………………………. 9.0 Orora Company SWOT Analysis……………………………………….......... 9.2 Weaknesses …………………………………………………………………… 9.3 Opportunities……………………………………………………………… 9.4 Threats…………………………………………………………………… 10.0 Works Cited………………………………………………………………….. Industry Service Paperboard container manufacturing industry is one of the oldest industries. The firms that operate in this industry convert the purchased paper and paperboard into solid packaging containers. These containers are sold to the various distributors and firms that manufacture consumer goods around the world (Hagenbarth 1). Some of the packaging containers include cartons, cardboard boxes, tobacco packs, food and beverage cartons, aluminum paper bags and many more packages. The actors in this industry mainly recycle wastes materials and convert them to useful materials that can be used for packaging other products (Chen, Wenting, et al 1) One main characteristic of this industry is that it manufactures sustainable and alternative products to plastic packages. Paperboard container manufacturing is one of the industries that have famed because of manufacturing biodegradable and compostable products that are friendly to the environment (Hubbe 1). In other words, most products that are sold by firms in this industry have less harm to the environment; this implies that the industry has gone green. Industry description Paperboard container manufacturing industry primary activities include solid paper sheeting manufacturing, shoe box carton packaging manufacturing, tobacco and food container manufacturing, multipurpose cardboard box manufacturing and milk and beverage carton manufacturing (Hubbe 1). This implies that the industry manufacture a range of packaging materials to suit the various products manufactured by demand industries. The life cycle of paperboard container industry is in the mature stage (Chen, Wenting, et al 1). The maturity of any industry is determined by industry value added (IVA) compared to GDP, the rate of growth of a number of establishment; the rate of technological change; the degree of customer acceptance of the products and the level of change the products in that particular industry undergoing (Hagenbarth 1). Looking from the statistics of this industry, we can say that the industry is mature. Firms There are various firms operating in paperboard industry; these firms tend to manufacture similar products and even offer similar services. This means that this industry has a perfect competition structure where many firms compete in offering similar products and services to the customers. Major players in this industry include; Orora limited, Color-park limited, Pratt Holdings proprietary limited and Shute Bay investment Pty limited (Chen, Wenting, et al 1) the industry’s growth is attributed to the high demand of the manufactured products by the demand firms. Moreover, demand firms prefer the products from paperboard container industry because they can be disposed safely without polluting the environment. This is one way of conserving the environment for the future generation. Source of raw materials Paperboard container industry obtains its raw materials from different industry suppliers. These supply industries include, adhesive manufacturing, printing, pulp, paper and paperboard manufacturing. We also have related industries that manufacture related products that come from paperboard industry (Chen, Wenting, et al 1). These related industries are corrugated paperboard container manufacturing, plastic blow molded product manufacturing and paper bag and other paper product manufacturing (Smolin, Kuleshov, Vanchakov 4). In other terms, these related industries tend to manufacture alternative or substitute products to those manufactured by the paperboard container industry. The industry has many barriers to entry; it means it is not easy for a new firm to enter in this competitive industry unless it is merged with the existing or has good financial muscles to counter the competition. Moreover, the technology in this paperboard container industry is more advanced like other modern industries (Hagenbarth 1). Firms that operate their business in this industry employ modern scientific technology in manufacturing their products in order to produce quality and large volumes to lure and serve many demanding firms (Chen, Wenting, et al 1). Firms have competed on low profit margins; large firms have opted in investing in new equipments and technology as a strategy to remain at the top in this industry (Smolin, Kuleshov, Vanchakov 4). Paperboard container industry’s revenue has relatively risen steadily in the last few years. This is mainly attributed to a ready and steady demand from industries such as food and beverages manufacturers (Hagenbarth 1). This industry is has a low-level international trade because of low value of the products and many alternative industries around the world manufacturing similar products. Strategic analysis Market analysis As mentioned earlier, the market size of paperboard container industry is wide. The two biggest markets, which buy products from this industry, are food products manufacturers and beverage manufacturers. Food industry is the biggest one in the entire world because every population consumes food (Hagenbarth 1). Most of the food consumed are bought from the importers or are exported. For food and beverages to be exported or imported, it needs to be packaged in good packages that would make them stain for longer period before it reaches to the consumers (Smolin, Kuleshov, Vanchakov 7). There, there is high demand for the packaging materials and containers. The two markets in fact, are expected to grow even bigger in future because of high global population growth (Hubbe 1) .Container-manufacturing firms; however, they must adopt new technologies to manufacture good packaging materials that are less harmful to both human and the environment. Firms operating in this industry that manufacture footwear and electronics have started shifting their operations through diversification to overseas nations to search for low wage costs nations. They are opening branches in densely populated countries such as China, India and African countries so that they can enjoy low labor costs (Chen, Wenting, et al 1). The future of the demand of the tobacco packages materials is expected to go down because of the drop in the smoking rate. This is because in recent years, there has been an increased creation of awareness about the dangers associated with smoking by the health stakeholders and the governments’ regulations (Hagenbarth 1). Some nations in fact, have gone to an extent of banning cigarettes smoking and manufacturing while others restrict the smokers not to do it publicly. This has led to the decrease of smoking habits consequently low demand for the cigarettes packaging materials. The imports of this industry are expected to grow at a rate of 3.5% yearly in the next decade. Those imports from low production cost countries such as China and Africa are going to remain price competitive in Australian and United States markets (Clients1.ibisworld.com.au 1). This is because they are manufactured at lower costs and when imported they are sold at a slightly lower prices to those of local firms. One of the profit increasing strategies that firms in this industry are adopting is improving efficiency and becoming more innovative (Hagenbarth 1). Innovative products are earning high profits margins; thus managements of these firms are working hard to ensure that they have innovative teams in their management so that they can come up with unique products that appeal and convenient to the users (Clients1.ibisworld, 2014). United States and Australia’s firms have access to the latest technologies; therefore, these local firms have taken the advantage of using these technologies to manufacture high quality products that beats similar products from overseas nations on the markets (Hubbe 1). This is helping to limit the import growth since the imported commodities are of low quality hence unattractive to the demanding firms (Hagenbarth 1). The use of the modern technologies have enabled firms in this industry to manufacture environment friendly products; these are products that can decompose easily and can be recycled Summary of Imports and exports Imports Source: Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Imports from % China 47.5 Indonesia 3.5 Vietnam 5.7 Taiwan 15.3 Other 28 Exports Source: Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Exports % Sinagapore 52.1 New Guinea 5.5 Malasya 11.9 New Zealand 18.3 Other 12.2 MARKET SHARE Similarly, this paperboard container industry has demand industries that buy its products. Examples of the demands industries are; Milk cream processing industry, footwear manufacturing, snack food manufacturing, computer and electronic equipment manufacturing food and beverage manufacturing and tobacco product manufacturing (Chen, Wenting, et al 1). Thus, the paperboard container manufacturing industry has a wide market that highly depends on its products. This industry has high level of market share concentration. The major four firms operating in this industry have about 73% of the total market share (Clients1.ibisworld.com.au 1). Orora Company leads by 24.8%, Pratt holdings 18.7%, Shute Bay ltd 15.3%, Color-park ltd 14.65 and other small firm share 26.6%. Therefore, these big four have the command and control of the market (Hagenbarth 1). Generally, this industry is competitive in that non-performing firms exit the industry because of competitive prices that well established firms offer on their products due to their large economies of scale. Orora Limited There are four major companies controlling 72% of the paperboard container industry. Other small firms share 27% of the remaining. Orora limited is the leading with 24.8% of the market share (Smolin, Kuleshov, Vanchakov 7). It has operated barely one year since it was established in 2013 when the oldest company in this industry Amcor limited decided to demerge its Australasian and packaging distribution business (Clients1.ibisworld.com.au 1). Orora Company has its headquarters in Melbourne city in Australia and trades on Australian stock exchange market (Ramasubramanian& Muthuraman 3). It This Company is divided into two, we have the Australasia and North America divisions; records reveal that 65% of the revenue is generated by the Australasia division while 35% by the North America division. This firm runs 36 manufacturing plants and has 79 distribution centers in seven countries; the company has over 5,700 employees (Clients1.ibisworld, 2014) Some of the products this company manufacture and distributes are; folding cartons, recycled papers, multiwall paper sacks, glass bottle and jars, aluminum beverage cans, closures and many more. The financial performance of this company over the first five years has been dismal because the initial Amcor Company was hit hard by the global financial crisis in 2008 (Hubbe 1). Just after slight recovery after the world financial crisis, Amcor ltd concentrated on overseas expansion rather than improving the Australasia operations (Chen, Wenting, et al 1). The revenue grew in recent years because of the acquisitions. However, the demand for the paperboard container products has ever remained stable. The table below shows the financial performance of Orora limited industry segment. Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Year Revenue ($millions) %change 2008-09 150 N/C 2009-10 140 -6.7 2010-11 150 7.1 2011-12 155 3.3 2012-13 165 6.5 2013-14 170 3.0 Pratt Holdings proprietary limited Pratt limited is a private company holding 18.7% of the market share of this industry. It was established in 1948 thus, is an old firm that has experience in this industry. It has over 9,000 employees who are majorly Australians, New Zealand and the United States. Like Orora ltd, it has its headquarters in Melbourne in Australia (Chen, Wenting, et al 1) Pratt manufactures a wide range of products including cardboard, plastics, aluminum-packaging papers, wide range of papers and it also recycle wastes materials (Smolin, Kuleshov, Vanchakov 4). Its packaging division manufactures cardboard boxes and folding cartons that are used in packaging, fruits, meat, vegetables, poultry, fish, seafood and many more (Ramasubramanian& Muthuraman 3). All these boxes and packaging containers are manufactured from 100% recycled papers. Recently, the firm has established its Smithfield plant Sidney city mainly for recycling purposes; another new branch is located in Yatala and its main function is to manufacture corrugated containerboard. The firm has also diversified and built a pulp and paper mill worth $1billion in Tumut (Clients1.ibisworld, 2014).It has built a 420 million box- making factory in New Zealand. Thus, the production capacity for this company has greatly improved. Records show that its own recycling branches supply 90% of the raw materials used by this company to manufacture these products (Hagenbarth 1). Thus, the firm’s production capacity is expected to be stable because the raw materials are steadily supplied. The ambitious expansions and product innovation has led to the larger market sharing for this firm and a steady growth of its market penetration. The revenue of Pratt firm is estimated to increase at the rate of about 7.3% annually in the next five years. The products manufactured out of recycled materials have dominated the total volume. This has made this firm to start large scale recycling operations. The financial performance of this firm in the last five years is as shown below. Source: Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Year Revenue ($millions) %change 2008-09 90 5.9 2009-10 100 11.1 2010-11 105 5.0 2011-12 115 9.5 2012-13 122 6.1 2013-14 128 4.9 Shute Bay Investment Pty Limited This is the third biggest company operating in paperboard container industry commanding 15.3% of the market. It manufactures and sale paper and board packaging materials (Clients1.ibisworld.com.au 1). It had recently changed its name from Detmold Holdings Pty; its headquarters is at Adelaide in Australia (Hubbe 1). It was established in 1948 and ever since has diversified its operations having some manufacturing plants in Adelaide, Sidney, Melbourne Singapore, Brisbane, China, Indonesia and South Africa. (Chen, Wenting, et al 1) It has expanded its geographic distribution especially after the start of the 21st century to North America, and Europe. This firm has four subsidiaries and has about 1650 employees. This company also manufactures a range of the disposable packaging products, which includes cartons and cups. In 2013, this company sold some of its subsidiaries to Amcor Company (Smolin, Kuleshov, Vanchakov 4). Its products are of extensive range, we have paperboard products used for takeaway foods for the retail firms in Australia, Asia (Clients1.ibisworld.com.au 1). Some of these demanding firms are the McDonald and Red rooster. The revenue of Shute Pty limited is said to have remain at a flat rate over the past five years. This implies that the company has lost some of its market shares to its competitors (Hubbe 1). However, the demand for the takeaway foods especially among the youth in Australia and the populated China has had positive effects to the revenue of this firm. The financial performance of this firm over the last five years is as follows. Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Year Revenue ($millions) %change 2008-09 105 -4.5 2009-10 100 -4.8 2010-11 105 5.0 2011-12 110 4.8 2012-13 105 -4.5 2013-14 105 0.0 Color Park limited This is the fourth in the major companies controlling the paperboard industry. It commands 14.6% of the of the industry’s market. It is an Australian firm, listed on the Australian Stock exchange market. It design and manufacture folding cartons and other packaging materials. In 2010, this company expanded by acquiring two firms i.e. Carter Holt Harvey that dealt with folding cartons and a New Zealand based firm building supplies group limited (Smolin, Kuleshov, Vanchakov 4). At present, this firm has three production branches and has about 670 employees in Sidney, Melbourne and Auckland (Chen, Wenting, et al 1). Apart from manufacturing paperboard containers and packaging materials, the company also offers printing services. The overall revenue for this firm has increased steadily over the last five years because of the acquisition of firms such as Cater and the additional production upgrades. Thus, the profits have been increasing over the years. The acquisition led to the increase in the market share of this company becoming the fourth. The financial performance in the last five years is as shown in the table below. Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Year Revenue ($millions) %change 2008-09 35 16.7 2009-10 40 14.3 2010-11 65 62.5 2011-12 100 53.8 2012-13 95 -5.0 2013-14 100 5.3 Product segmentation The products that are produce in this paperboard container industry are of various kinds as mentioned earlier. These products are segmented as follows, solid cardboard boxes, food containers, beverage containers, Tobacco packages papers and other packaging materials. The pie chart below show how these products are segmented. Solid cardboards This product holds a higher percentage in product segmentation. Solid cardboards are manufactured nearly by every firm operating in this industry. It holds about 40.1% of all products that manufactured in the industry. The main demand firms that buy this product are footwear, electronic, clothes, books and stationery manufacturers (Hagenbarth 1). The overall demand of this kind of product is seen to have dropped due to competition from the oversea imports that seems to be cheap over the locally manufactured products in Australia. Beverage containers Beverage containers take the second position with about 28.4% of the product segmentation. However, it accounts for the largest industry revenue. Some of the beverage containers manufactured includes, glass bottles, plastic bottles, liquid-packaging papers, Aluminum papers etc. Beverage products have high demand because people tend to consume various beverages and alcoholic drinks that packed in bottles. Moreover, firms that manufacture drugs buy these packaging bottles from this industry. Thus, the demand of the beverage containers is high because there so many firms that manufacture liquid products that needs bottle containers. Food containers Food containers hold 265 of the market for the products of paperboard container industry. In the modern days, significant proportions of foodstuffs are packaged in solid paperboard. Some of these food include; cereal products, frozen food, canned meat and fish, tea, coffee snack food and many more (Ororagroup.com 1). In fact, the young generations prefer takeaway food thus increasing the demand for food containers (Hagenbarth 1). Demand for food containers is also attributed to the change in the lifestyle in the society. For example, college students would prefer to buy packaged meals instead of cooking in the rooms. This has greatly boosted the demand for the food packaging materials. Tobacco packaging The demand for the tobacco packaging materials is the least among the products that are manufactured by the paperboard container industry. There are fewer number of individuals who smoke allover the world. Therefore, the amount of packaging materials needed in small in numbers (Clients1.ibisworld.com.au 1). Moreover, there are campaigns allover against cigarette smoking by health sectors. This has made some smokers to quit smoking hence, the demand for cigarettes going down. Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Solid cardboard 40.1% Beverage Containers 28. 4% Food Containers 26% Tobacco papers 2.2% Other packaging materials 3.3% Market segmentation The paperboard container industry sells its products to include food, beverage and tobacco manufacturing, Footwear manufacturers, Restaurants, cafes and fast food operators, Pharmaceutical product manufacturers, electronic goods manufacturers, export market and others industries (Clients1.ibisworld, 2014) This market has a total capacity of $686million. Food, beverage and tobacco manufacturers lead by share of 56.6% while footwear manufacturers hold at least share of 1.3% of the total industry share. Source: Retrieved from http://clients1.ibisworld.com.au.ezproxy.lib.uts.edu.au/reports Major market segmentations Percentage % share total $686 million food, beverage and tobacco 56.6% Pharmaceutical product manufacturers 12.5% electronic goods 6.4% Restaurants, cafes and fast food 5.5% export market 2.8% Footwear manufacturers 1.3% Others 14.9% Market economics Paperboard container industry produces packaging goods that are mainly bought by the manufacturing industries in Australia. Therefore, the demand for these materials highly depends on the demand of these manufacturing firms where food and beverage manufacturing firms lead in demand (Clients1.ibisworld, 2014).The level of demand of these packaging goods also depend on some economic factors, which include household disposable income, business level, competition from the imports goods, and consumption expenditure (Chen, Wenting, et al 1) Consumer goods such as milk and beverages are expected that their demand would grow continuously because of the growth in the population around the world. The demand of the packaging materials also rely on the kind of the consumer products the consumers are will and able to buy. In addition, the demand of these packaging materials depends on their size and durability (Hubbe 1). The demand for fast- food has grown over the recent years thus, the demand for packaging products for such food have gone up. The paperboard container industry makes packaging products from wood; this has caused an environmental concern since the manufacturing of these products requires energy and water resources (Chen, Wenting, et al 1) The environmental conservation groups are very much concerned on how this industry is affecting the environment. In fact, some of the products from this industry such as plastic and glass bottles are not decomposable. Therefore, they cause environmental threats when it comes the time of disposing them (Hagenbarth 1). This environmental concern is among the marketing determinant of the packaging materials produced by the paperboard container industry. However, a large percentage of the industry’s products are biodegradable and most of them can be recycled. Competitive analysis As discussed earlier, four major firms majorly operate and hold big shares of this industry. Orora limited, Patty Pty ltd, Shute limited and Color Park limited are these companies and they control over 72% of the entire industry (Clients1.ibisworld.com.au 1). Orora limited holds the largest portion of about 24.8% followed by Pratt holdings 18.7%, Shute Bay ltd 15.3%, Color-park ltd 14.65 and other small firms’ share 26.6%. Most these firms expand through acquisition and merging with subsidiaries (Hagenbarth 1). The key success factors of the firms operating this industry include; a)Access to high quality raw material- In Australia, there are several firms that manufacture high quality papers, thus the firms operating in this industry have access to these quality papers. These papers are god in making solid fiberboard containers. b)The goods produced are favored by the market. Many demand firms especially in food and beverage industry have high demand for these packaging products (Hubbe 1). The packaging products from Paperboard container industry are known for their quality for packaging and storage of good for a long time and even greater distances. c) Access to latest technology-Firms in this industry have employed the latest technology for example the recycling plants that produce biodegradable material that are favored by many demand firms. d) Large scales contracts- the close association of the firms of this industry and the demand enable the firms to have long term supply contracts. Therefore, firms manufacturer in large quantities knowing well that that is already a market for their products. e) Market research understanding- Most of the firms operating in this industry have been in business for long period hence, they understand the kind of the market they serve (Hubbe 1). They have spent a lot in doing market research hence, they have analyzed their market structure and they know what kind of products that sale. The degree of competition in this industry tends to vary with segments. High competition is experienced in food and beverage containers segments. Generally, this industry has high competition; any firm willing to operate in it must have good standards to counter the competition of the existing firms (Chen, Wenting, et al 1) There is both internal and external competition. Firms operating in this industry compete basing on the prices of their products, quality of the products, good service to the customers and the capability of manufacturing products that satisfy the customers (Hagenbarth 1). Durability and attractiveness of the packaging products also act as a competitive strategy which most firms use. The external competition comes from the imports, which have relatively lower prices as compared to locally manufactured goods (Hagenbarth 1). Plastic products also pose a threat to the biodegradable products manufactured by this industry. Cost structure The cost structure of paperboard container industry is composed of the purchases of the raw material, salary and wages of the employees and other utility expenses. The raw material purchased include, wood pulp, adhesives, chemicals and glue. Purchases are estimated to cost the industry about 60% of its revenue (Clients1.ibisworld.com.au 1). Wages and salaries is another expense and account for about 17.2% of the industry revenue. The wages are projected to continue increasing because Australia has low labor base as compared to other populated nations such as China (Hubbe 1). Moreover, the wages are high because the firms employ skilled personnel who have the skills and knowledge to work innovatively (Chen, Wenting, et al 1). Other expenses such as rent and electricity account for about 2.5% of the industry revenue. Barriers to entry The paperboard container industry unlike other industries has high barriers to entry. The reason for high barriers to entry is the volume of capital needed to start a firm that manufactures such products. The industry is said to be capital intensive, only firms that have good financial muscles are the ones that operate in this industry. The barriers to success in this industry is also associated to the finances because high quality personnel such as engineers, chemical workers and entrepreneurship. These people need handsome pay that is an addition cost to the operating firms. International trade Paperboard container industry is mainly concentrated in Australia and the Northern part of America. However, this industry participate less in international trade. This means that the exports of this industry to other foreign nations is quite low and in fact decreasing while the imports is in medium level . The reason behind few exports is that the products from Australia seem to be expensive when exported to other countries. This is because the production costs in Australia are higher hence, pushing up the prices of these goods (Hagenbarth 1). On the other, hand the imports are relatively higher because they are cheap, they are imported from countries that have low production costs. Thus, they seem to be cheaper compared to the local products. This make the demand firms to go for imports other than locally made product. The imports value is projected to rise at a rate of 1.8% annually in the next five years; this would be about 12% of the domestic demand. China accounts for 47.5% of all the imports in this industry in Australia (Clients1.ibisworld.com.au 1). Exports from Australia only accounts for 2.8% of the total industry revenue. Another reason for low exports is that a high Australian dollar within the last few years has influenced the competitive price in the global markets hence constraining the demand for the Australian exports. However, the value of these exports is estimated to be going up by 2.3% annually. This growth is attributed to the products ion of biodegradable products from paperboard containers industry. Locations The paperboard container industry in Australia is highly concentrated in Melbourne and Sidney cities. The two states New South Wales has 29.2% while Victoria has 45.5% of the industry establishments (Clients1.ibisworld, 2014) The firms in this industry are located mainly in cities to serve the large food and beverage industry in these cities. Moreover, the revenue for the industry is also high in these cities (Hagenbarth 1). The two states have the highest population that has provide market for the consumer goods that needs packaging material from the paperboard container industry. Other states include Western Australia, South Australia and Queensland. SWOT Analysis of Orora limited Strengths As discussed earlier Orora limited is the biggest firm operating in the paperboard container industry. For its share of the market is about 24.8% hence, having more advantage to the control of the market. Some of the notable strength of this firm includes, a) Orora limited manufactures variety of packaging products ranging from paperboard, glass bottles, food and beverage packages and many more (Clients1.ibisworld, 2014) The many range of product enable this company to trade with many demand firms thus, high volume of sales. b) Orora limited employ the latest technology to manufacture its products to satisfy its customers. Unlike other firms that manufacturer non-decomposable products that pollute the environment, Orora limited strive o use the technology to produce products that are biodegradable hence reducing environmental pollution. This fact earns it favor of the customers who prefer buying its products. c) Orora has good capital base o operate its business. We have seen from the discussion that for any business firm to operate in this industry, it must have good financial base. When Amcor Company was merged to form Orora, all the capital was inherited. Thus, the company has a good beginning thus, it has good financial base to finance its operations. d) Records reveal that about 90% of the raw materials Orora limited use are sourced from its recycling subsidiaries located in various places in Australia (Clients1.ibisworld, 2014). This is a big strength because the flow of the raw material is steady hence, it produces continuously without delays or shortages of raw materials e) Orora limited has excellent expertise; it mainly employs skilled personnel who contribute a lot in producing innovative products that appeal to the customers. Weaknesses a) Orora limited spends a lot in trying to manufacture high quality products. Many funds are used on buying expensive equipments and hiring of skilled personnel, this leads to low profit margins. b) Orora limited operates in risky business, this because the demand of its products is quite volatile. A small change in demand of products produced by the demanding firms affects a lot the demand of the packaging products. c) The company has not fully adjusted accordingly after the merging of the original company Amcor. This gives competitors an opportunity to beat it. Opportunities a) The market for the paperboard container industry is expanding. As the population rise, more food needs to be produced and sold in shops in packages. Therefore, Orora limited still has hoped to be in business in future because of the market of the consumer goods. b) Orora limited trades on Australian stock exchange market, thus, it has chances of accessing loans facilities from the creditors because of its brilliant performance. c) Orora limited has not yet exhausted all the markets; it only operates in Australia and Northern part of America. Still has the opportunity of reaching to overseas-unexplored markets. d) Basing in its market share, Orora can still merge with other related firms to boost its production capacity. Threats a) One of the biggest threats to Orora firm is stiff competition in the paperboard industry. There are many firms producing similar products as those of Orara limited therefore, the firm has a challenge of maintaining quality standards of its products to counter the competition. b) The expansion and diversification come with management challenges. (Clients1.ibisworld.com.au 1). It is a threat to this company when it expands but without good management structure that would maintain efficiency. c) Cheap imports from low labor operation countries as China is a big threat to the market of the Orora limited products. d) Substitutes products such as plastics and polythene paper bags manufactured by other industries pose a threat to the market of the products of Orora limited. e) Government regulations of specific products that may lead to environmental pollution are also threats to the survival of this company. Works cited Chen, Wenting, et al. "Lotus-Like Paper/Paperboard Packaging Prepared With Nano-Modified Overprint Varnish." Applied Surface Science 266. (2013): 319-325. Academic Search Premier. Web. 4 Sept. 2014 Clients1.ibisworld.com.au. “Australia industry report: Paperboard container industry”. (2014). Accessed on web 4th Aug 2014. Hagenbarth, M. J. "Paper And Paperboard Industry Protocol For Sampling And Analysis Of Recycled Materials Intended For Food Packaging Applications." Food Additives & Contaminants 22.10 (2005): 1042-1052. Academic Search Premier. Web. 4 Sept. 2014. Hubbe, Martin A. "Prospects For Maintaining Strength Of Paper And Paperboard Products While Using Less Forest Resources: A Review." Bioresources 9.1 (2014): 1-130. Academic Search Premier. Web. 4 Sept. 2014. Kulshreshtha, Shweta, Nupur Mathur, and Pradeep Bhatnagar. "Handmade Paper And Cardboard Industries: In Health Perspectives." Toxicology & Industrial Health 27.6 (2011): 515-521. Academic Search Premier. Web. 4 Sept. 2014 Manolis Sherman, Lilli. "Recycling Conferences Focus On Label Removal & Mixed Streams." Plastics Technology 60.6 (2014): 13-53. Academic Search Premier. Web. 4 Sept. 2014. New Global Giant In PET Packaging." Plastics Technology 48.6 (2002): 66. Academic Search Premier. Web. 4 Sept. 2014. Ororagroup.com. About Orora- the facts. (2014) Accessed on web 4th Aug 2014. Pellresearch.com. Market size-Cardboard box& Paperboard Container manufacturing. (2014). Accessed on web 4th Aug 2014. "Packaging." Medical Design Technology 11.6 (2007): 116-123. Academic Search Premier. Web. 4 Sept. 2014. Ramasubramanian, M.K., and K. Muthuraman. "A Computational Mechanics Model For The Brim Forming Process In Paperboard Container Manufacturing." Journal Of Manufacturing Science & Engineering 125.3 (2003): 476-483. Academic Search Premier. Web. 4 Sept. 2014. Smolin, A., A. Kuleshov, and M. Vanchakov. "Secondary Fibrous Materials From Cardboard And Paper Production And Consumption Waste." Russian Journal Of General Chemistry 82.5 (2012): 991-998. Academic Search Premier. Web. 4 Sept. 2014. Package Engineering." Technology & Engineering Teacher 73.6 (2014): 32-39. Academic Search Premier. Web. 4 Sept. 2014. Trifonova, T., and N. Ishun’kina. "Eco-Compatiblity Assessment Of Container Glass Production." Glass & Ceramics 64.5/6 (2007): 214-217 Read More