Barrick Gold: Peter Munk's Leadership and Legacy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Barrick Gold: Peter Munk's Leadership and Legacy
Under the guidance and vision of founder Peter Munk, Barrick Gold Corporation had risen to become an industry leader and the world's largest gold producer. The company had grown, mostly through mergers and acquisitions, from one single mine in Northern Ontario to 26 operating mines on five continents, with more than 20,000 employees worldwide. By 2013, however, weak gold prices, asset value writedowns and operational cost overruns have negatively affected the company's stock price. Many attribute the company's problems to Munk's personality and his control over the board of directors. Munk has announced that he will retire in 2014 and will be replaced as chairman by his current co-chairman, John L. Thornton. How can Thornton effectively chair Barrick's board in the wake of Munk's legacy? Will his vision for the company conflict with Munk's dream of turning it into an international diversified mining company? How much of a role will Munk play in the future given his level of informal power? Finally, what can Barrick do to lift itself out of an industry mired in volatility and financial uncertainty?
Swot Analysis of "Barrick Gold: Peter Munk's Leadership and Legacy" written by Cara C. Maurer, Graeme Kreindler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Munk's Munk facing as an external strategic factors. Some of the topics covered in Barrick Gold: Peter Munk's Leadership and Legacy case study are - Strategic Management Strategies, Leadership transitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Barrick Gold: Peter Munk's Leadership and Legacy casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Barrick Gold: Peter Munk's Leadership and Legacy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barrick Gold: Peter Munk's Leadership and Legacy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Munk's Munk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Munk's Munk operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Barrick Gold: Peter Munk's Leadership and Legacy can be done for the following purposes –
1. Strategic planning using facts provided in Barrick Gold: Peter Munk's Leadership and Legacy case study
2. Improving business portfolio management of Munk's Munk
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Munk's Munk
Strengths Barrick Gold: Peter Munk's Leadership and Legacy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Munk's Munk in Barrick Gold: Peter Munk's Leadership and Legacy Harvard Business Review case study are -
Learning organization
- Munk's Munk is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Munk's Munk is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barrick Gold: Peter Munk's Leadership and Legacy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Munk's Munk
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Munk's Munk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Munk's Munk is one of the most innovative firm in sector. Manager in Barrick Gold: Peter Munk's Leadership and Legacy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Munk's Munk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Munk's Munk has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Munk's Munk has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Barrick Gold: Peter Munk's Leadership and Legacy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Munk's Munk has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Munk's Munk in the sector have low bargaining power. Barrick Gold: Peter Munk's Leadership and Legacy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Munk's Munk to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Munk's Munk has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Munk's Munk has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Munk's Munk has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Barrick Gold: Peter Munk's Leadership and Legacy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Munk's Munk is present in almost all the verticals within the industry. This has provided firm in Barrick Gold: Peter Munk's Leadership and Legacy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Barrick Gold: Peter Munk's Leadership and Legacy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Munk's Munk in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Barrick Gold: Peter Munk's Leadership and Legacy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barrick Gold: Peter Munk's Leadership and Legacy are -
Increasing silos among functional specialists
– The organizational structure of Munk's Munk is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Munk's Munk needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Munk's Munk to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Munk's Munk has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Barrick Gold: Peter Munk's Leadership and Legacy should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Munk's Munk, firm in the HBR case study Barrick Gold: Peter Munk's Leadership and Legacy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Munk's Munk has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Munk's Munk even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Barrick Gold: Peter Munk's Leadership and Legacy, is just above the industry average. Munk's Munk needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study Barrick Gold: Peter Munk's Leadership and Legacy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Barrick Gold: Peter Munk's Leadership and Legacy can leverage the sales team experience to cultivate customer relationships as Munk's Munk is planning to shift buying processes online.
Interest costs
– Compare to the competition, Munk's Munk has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Munk's Munk has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Munk's Munk has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Munk's Munk is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Barrick Gold: Peter Munk's Leadership and Legacy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Munk's Munk supply chain. Even after few cautionary changes mentioned in the HBR case study - Barrick Gold: Peter Munk's Leadership and Legacy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Munk's Munk vulnerable to further global disruptions in South East Asia.
Opportunities Barrick Gold: Peter Munk's Leadership and Legacy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Barrick Gold: Peter Munk's Leadership and Legacy are -
Creating value in data economy
– The success of analytics program of Munk's Munk has opened avenues for new revenue streams for the organization in the industry. This can help Munk's Munk to build a more holistic ecosystem as suggested in the Barrick Gold: Peter Munk's Leadership and Legacy case study. Munk's Munk can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Munk's Munk can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Munk's Munk can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Munk's Munk in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Munk's Munk to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Munk's Munk can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Barrick Gold: Peter Munk's Leadership and Legacy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Munk's Munk in the consumer business. Now Munk's Munk can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Munk's Munk can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Munk's Munk to increase its market reach. Munk's Munk will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Using analytics as competitive advantage
– Munk's Munk has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Barrick Gold: Peter Munk's Leadership and Legacy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Munk's Munk to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Munk's Munk can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Munk's Munk can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Munk's Munk can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Munk's Munk can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barrick Gold: Peter Munk's Leadership and Legacy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Barrick Gold: Peter Munk's Leadership and Legacy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barrick Gold: Peter Munk's Leadership and Legacy are -
High dependence on third party suppliers
– Munk's Munk high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Munk's Munk in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Munk's Munk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Munk's Munk needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Munk's Munk will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Munk's Munk
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Munk's Munk.
Shortening product life cycle
– it is one of the major threat that Munk's Munk is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Munk's Munk with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Munk's Munk business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Barrick Gold: Peter Munk's Leadership and Legacy, Munk's Munk may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Munk's Munk.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Munk's Munk in the Strategy & Execution sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Munk's Munk needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Barrick Gold: Peter Munk's Leadership and Legacy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Barrick Gold: Peter Munk's Leadership and Legacy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Barrick Gold: Peter Munk's Leadership and Legacy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Barrick Gold: Peter Munk's Leadership and Legacy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Barrick Gold: Peter Munk's Leadership and Legacy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Munk's Munk needs to make to build a sustainable competitive advantage.
