Paper Industry 5 Forces Analysis
Assignment 2 – Five Forces Analysis on Paper Industry
The SIC code I use to discuss in the assignment is 2621 Paper Mill. As we learned in Module 3, there is a five forces analysis. Today, we are going to use five forces to analyze the paper industry.
Current Competitors:
As we can see from the above diagram, we can know that paper industry is averagely in a low growth or even negative growth since 2009. IBISWorld states that the revenue of paper industry dropped dramatically in 2009 due to the global economic recession, which consumers decrease their spending. The other factor might be the increasing of using electronic products. In the report of “Paper Mill” which is from Encyclopedia of Global Industries, US paper company, International Paper Company (IP), expended to a global producer of paper and paper products via many acquisitions worldwide in 1980s and 1990s. Nowadays, International Paper company is the largest paper output company with 12,901 thousand tons in the world. The other companies in top five are Japan-based Oji Paper Co., Ltd with 10,721 thousand tons, Finland based UPM-Kymmene Oyj with 10,700 thousand tons, China-based Nine Dragons Paper Ltd. with 10,450 and Finland-based Stora Enso Oyj with 10,268 thousand tons. The data is ranked by the amount of output and retrieved from Gale Business Insights: Essentials 2015. We can know that the using amount of paper is increasing in Asia-Pacific region. The reason is that their economic scale is growing rapidly these years, so the demand of paper is increasing. As for Finland, the country’s natural resource of forest is their advantageous point. So there are two Finland-based companies in top five. The other paper companies’ output amount is not as much as the above companies, because there is high brand identity in paper industry. So paper consumers, such as printers, publishers and so on usually will rely on certain firms.
Suppliers:
To produce paper needs pulpwood and it is not the only one
The SIC code I use to discuss in the assignment is 2621 Paper Mill. As we learned in Module 3, there is a five forces analysis. Today, we are going to use five forces to analyze the paper industry.
Current Competitors:
As we can see from the above diagram, we can know that paper industry is averagely in a low growth or even negative growth since 2009. IBISWorld states that the revenue of paper industry dropped dramatically in 2009 due to the global economic recession, which consumers decrease their spending. The other factor might be the increasing of using electronic products. In the report of “Paper Mill” which is from Encyclopedia of Global Industries, US paper company, International Paper Company (IP), expended to a global producer of paper and paper products via many acquisitions worldwide in 1980s and 1990s. Nowadays, International Paper company is the largest paper output company with 12,901 thousand tons in the world. The other companies in top five are Japan-based Oji Paper Co., Ltd with 10,721 thousand tons, Finland based UPM-Kymmene Oyj with 10,700 thousand tons, China-based Nine Dragons Paper Ltd. with 10,450 and Finland-based Stora Enso Oyj with 10,268 thousand tons. The data is ranked by the amount of output and retrieved from Gale Business Insights: Essentials 2015. We can know that the using amount of paper is increasing in Asia-Pacific region. The reason is that their economic scale is growing rapidly these years, so the demand of paper is increasing. As for Finland, the country’s natural resource of forest is their advantageous point. So there are two Finland-based companies in top five. The other paper companies’ output amount is not as much as the above companies, because there is high brand identity in paper industry. So paper consumers, such as printers, publishers and so on usually will rely on certain firms.
Suppliers:
To produce paper needs pulpwood and it is not the only one
References: "Paper Mills." Encyclopedia of Global Industries. Farmington Hills, MI: Gale, 2014. Business Insights: Essentials. Web. 21 Mar. 2015.URL http://bi.galegroup.com.libproxy.utdallas.edu/essentials/article/GALE%7CI2501600025/8b2697d2a8f66eb86de936b7a8706c52?u=txshracd2602 “The Impact of Market Dynamics in a Mature Industry New Activities in the Paper Supply Chain”, Bo Rundh, Karlstad University, Karlstad “Competition in the Paper Industry”, Bartusch M., Hallquist D., Dorsey S., Schultz C., retrieved 2015/3 from URL: http://www.csed.umn.edu/web3503/pulppaperFiveForces.pdf Gale Business Insights: Essentials 2015