Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version
With prices at all-time lows at the beginning of 1994, South Africa's sole primary aluminum producer--Alusaf--is considering building the world's largest greenfield smelter. Using cost estimates in this case, students can evaluate the relative cost position of this plant in the context of the cost data on other smelters provided in the spreadsheet accompanying "The Aluminum Industry in 1994." By building on the supply and demand analysis supported by that case, students can evaluate the profitability of this massive capital investment.
Swot Analysis of "Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version" written by Kenneth Corts includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aluminum Alusaf's facing as an external strategic factors. Some of the topics covered in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version case study are - Strategic Management Strategies, Financial management, Manufacturing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version casestudy better are - – increasing household debt because of falling income levels, increasing transportation and logistics costs, geopolitical disruptions, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aluminum Alusaf's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aluminum Alusaf's 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version can be done for the following purposes –
1. Strategic planning using facts provided in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version case study
2. Improving business portfolio management of Aluminum Alusaf's
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 Aluminum Alusaf's
Strengths Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aluminum Alusaf's in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version Harvard Business Review case study are -
Effective Research and Development (R&D)
– Aluminum Alusaf's 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Aluminum Alusaf's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Aluminum Alusaf's 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 Aluminum Alusaf's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Aluminum Alusaf's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Aluminum Alusaf's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aluminum Alusaf's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Aluminum Alusaf's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Aluminum Alusaf's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Aluminum Alusaf's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version firm has clearly differentiated products in the market place. This has enabled Aluminum Alusaf's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Aluminum Alusaf's to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Aluminum Alusaf's 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Aluminum Alusaf's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aluminum Alusaf's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Aluminum Alusaf's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kenneth Corts can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Aluminum Alusaf's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version are -
Workers concerns about automation
– As automation is fast increasing in the segment, Aluminum Alusaf's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aluminum Alusaf's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 cash cycle compare to competitors
Aluminum Alusaf's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Aluminum Alusaf's 's lucrative customers.
Need for greater diversity
– Aluminum Alusaf's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version, is just above the industry average. Aluminum Alusaf's 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.
Slow to strategic competitive environment developments
– As Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version HBR case study mentions - Aluminum Alusaf's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version can leverage the sales team experience to cultivate customer relationships as Aluminum Alusaf's is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version, it seems that the employees of Aluminum Alusaf's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Aluminum Alusaf's 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. Aluminum Alusaf's 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.
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 Aluminum Alusaf's supply chain. Even after few cautionary changes mentioned in the HBR case study - Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aluminum Alusaf's vulnerable to further global disruptions in South East Asia.
Opportunities Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version | 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version are -
Creating value in data economy
– The success of analytics program of Aluminum Alusaf's has opened avenues for new revenue streams for the organization in the industry. This can help Aluminum Alusaf's to build a more holistic ecosystem as suggested in the Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version case study. Aluminum Alusaf's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Aluminum Alusaf's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aluminum Alusaf's is facing challenges because of the dominance of functional experts in the organization. Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aluminum Alusaf's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Aluminum Alusaf's to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Aluminum Alusaf's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aluminum Alusaf's 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, Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Aluminum Alusaf's 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. Aluminum Alusaf's 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.
Loyalty marketing
– Aluminum Alusaf's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aluminum Alusaf's 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Aluminum Alusaf's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Aluminum Alusaf's 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aluminum Alusaf's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aluminum Alusaf's can use these opportunities to build new business models that can help the communities that Aluminum Alusaf's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Aluminum Alusaf's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version are -
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. Aluminum Alusaf's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Aluminum Alusaf's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Aluminum Alusaf's in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Aluminum Alusaf's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Aluminum Alusaf's needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aluminum Alusaf's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Aluminum Alusaf's 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.
High dependence on third party suppliers
– Aluminum Alusaf's 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.
Environmental challenges
– Aluminum Alusaf's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Aluminum Alusaf's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Aluminum Alusaf's
– 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 Aluminum Alusaf's.
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. Aluminum Alusaf's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Aluminum Alusaf's.
Weighted SWOT Analysis of Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Smelting in South Africa: Alusaf's Hillside Project, Portuguese Version 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 Aluminum Alusaf's needs to make to build a sustainable competitive advantage.