External Environment, Internal Environment and SWOT Analysis - Essay Example

In order to analyze a company one must utilize the right analytic tools to learn about its internal and external environment. One of the most effective tools a professional can utilize is SWOT analysis. SWOT analysis is an evaluation of the company’s strengths, weakness, and threats. The external environment is covered by the opportunities and threats, while the internal environment can be analyzed through the strengths and weaknesses (Kotler, 2003). This report utilizes SWOT to analyze the public firm Papyrus Australia.

Papyrus Australia was founded in 1996 as a research based company in Australia with the purpose of creating an alternative type of paper. On November 24, 2005 the company was awarded a patent for its ground breaking technology which utilizes banana tree trunks as the raw material to produce paper (Papyrusaustralia, 2009). A SWOT analysis will help us understand the internal and external environment of the company. StrengthsPapyrus Australia is start up company with an innovative product that will revolutionize the paper industry.

The company has a patented technology which gives it a monopoly for at least 17 years. There is surplus of raw in the word due to the fact there are over 25 million banana trees in the world (Prospectus, 2005).The energy utilization for a manufacturing plant is extremely low and a complete manufacturing facility can be set up in farm in a small space of 500 square meters. The water expense of the manufacturing facility is cero. The plantation actually receives the additional benefit of obtaining free water to irrigate the banana trees since the actual tree from which the truck is extracted is made up of 60% water, which can be put to good use since it has to be disposed of anyways during the manufacturing process.

Weaknesses The production of the banana paper is limited to the size of the farm. The business model does not consider the transportation cost of bringing in banana tree trunks as raw material from other farms. There are logistical problems associated with the producing banana trees because has to set up a large network of manufacturing plants across the world. The operation is dependent on penetration the Sub-Saharan African region which is one of the most underdeveloped regions in the world.

The company has not shown yet they can mass produce their product. The company is still in the adolescence stage of its business life cycle.OpportunitiesDue to the fact that the company is starting out from scratch there are plenty of opportunities for business expansion. Africa is focus point for the firm since 53% of the world supply of bananas is located there. The firm can effectively penetrate this market because its operation is self sufficient and the infrastructural problem the continent faces such as lack of infrastructure are not a concern since the operation uses minimal electricity and cero external water.

A second strategic location for expansion is the Caribbean. In this region the plantain trees grows, which is part of the banana family. The plantain tree provides higher yields than normal banana trees, thus plantain cultivation can produce more paper per square meters in comparison with banana cultivation. The small size of the Caribbean islands provides logistical advantages. ThreatsThe company has new product that needs the involvement of a network of business partners across the world. This makes the company susceptible to potential theft of its technology by unscrupulous businesspeople.

Theft could translate in counterfeit banana ply paper in the marketplace. Due to the fact that banana ply paper is a commodity it would be difficult to differentiate the original product from counterfeit copies. The company is competing against a multi-billion dollar industry. Another threat is that since banana ply paper would be marketed as a commodity the firm has be prepared to deal with constant price fluctuations. ReferencesKotler, P. (2003). Marketing Management (11th ed.). New Jersey: Prentice Hall.

Papyrusaustralia.com (2009). Corporate website. [online]. Available from [Accessed 27 July 2009].Prospectus (2005). Papyrus Australia Prospectus. [online]. Available [Accessed 27 July 2009].