UPM's Competitive Strategy Research

Paper industry has great link to the economic development and social development of a country.In the past 15 years,china paper industry has been grew very rapidly.Technology and machinery has been upgraded,production capacity and company scales have been expanding dramaticly.China has become the biggest paper producer all over the world.Yet,the electric media grows,paper industry has been suffered,especially in fine paper session.At the mean time,the heavy investment took place after 2008 economic crisis which lead to over capacity.As a result,the paper business has become a very tough business.The margin has declined and many small company closed down.Under such a background,this thesis would like to have a deeper study of the situation and especially put focus on fine paper industry.I have been working in UPM for over 12 years,and be able to hand in the key business area such production,product development,supply chain and technical sales.In such a very severe situation,UPM's profit has been affected meanwhile market grow has been very difficult.I hope to use the knowledge that I learned during my MBA,to get deeper study of the key factors of competition and get better understand of company's key competence,define the strategy direction and figure out the tactics for reference.In the thesis,PESTEL model was used to identified the external environment,especially focus on the environment protection issues and new media impact.As the same time Michael Porter's Five Forces Model was used to define the key forces inside the paper industry.As a finding,the lacking of raw material and over capacity have been the biggest challenge in Chinese paper industry.So the top paper producers have put big efforts in all the key factors and try to win the game.After that,the value chain of UPM has been studied and base on the study I defined frou key competence which covers 12 criteria.With the comparison to the other four key competitors,UPM's strength and weakness was found.Later on SWOT model was used to figure out the strategy of the company.I recognize that the office paper and graphic paper are not under the same conditions.Growth strategy is suitable for office paper while defense strategy is suitable for graphic paper.After the strategy direction was defined,differentiation is use as a guideline to figure out the strategy actions.Concrete strategy actions is defined as:extending the office paper offering to meeting the growth,building up business alignment with big and key customers,establishing CSR system and implementing cost down actions.In last chapter,those strategy was studied and specific actions been found.I believe that with those strategy actions UPM would to be able to keep the leading position in the coming years.