Australian Miners and the Resource Super Profit Tax SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Australian Miners and the Resource Super Profit Tax
This case presents a means by which students can explore how government policy is influenced by the actions of stakeholders in an economy: firms, taxpayers, voters, unions, and other organizations. It highlights how policy-making can be a process endogenous to the interests and influence of the private sector, and not an exogenous one, even in domains that are the power reserve of public policy makers. In 2010, the ruling party in Australia has devised a new tax, the Resource Super Profit Tax (RSPT). This tax has been devised to enable national and state governments to benefit from the boom in the mining industry by expropriating a greater portion of the industry's earnings. The RSPT has been prepared without any input from major mining companies in Australia, and if implemented would represent a substantial increase in their tax payable. The case is presented from the perspective of the CEO of BHP Billiton, one of the largest mining companies in Australia. The situation considers what, if any, action can be taken to combat a tax that has already been devised by the government and is about to be implemented. Successful analysis of the case involves an evaluation of all stakeholders in the Australian economy that will be influenced by the imposition of the RSPT. After this is done, a strategy needs to be devised that will influence the government to withdraw a tax to which it has already demonstrated a firm commitment.
Authors :: Andrew Delios, Donna Jimenez, Clarissa Turner
Swot Analysis of "Australian Miners and the Resource Super Profit Tax" written by Andrew Delios, Donna Jimenez, Clarissa Turner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax Rspt facing as an external strategic factors. Some of the topics covered in Australian Miners and the Resource Super Profit Tax case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Australian Miners and the Resource Super Profit Tax casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing commodity prices, increasing energy prices, cloud computing is disrupting traditional business models, technology disruption, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of Australian Miners and the Resource Super Profit Tax
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Australian Miners and the Resource Super Profit Tax case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax Rspt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax Rspt 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 Australian Miners and the Resource Super Profit Tax can be done for the following purposes –
1. Strategic planning using facts provided in Australian Miners and the Resource Super Profit Tax case study
2. Improving business portfolio management of Tax Rspt
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 Tax Rspt
Strengths Australian Miners and the Resource Super Profit Tax | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax Rspt in Australian Miners and the Resource Super Profit Tax Harvard Business Review case study are -
Innovation driven organization
– Tax Rspt is one of the most innovative firm in sector. Manager in Australian Miners and the Resource Super Profit Tax Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Australian Miners and the Resource Super Profit Tax 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.
Low bargaining power of suppliers
– Suppliers of Tax Rspt in the sector have low bargaining power. Australian Miners and the Resource Super Profit Tax has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tax Rspt to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tax Rspt is present in almost all the verticals within the industry. This has provided firm in Australian Miners and the Resource Super Profit Tax 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.
Learning organization
- Tax Rspt 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 Tax Rspt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Australian Miners and the Resource Super Profit Tax Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Tax Rspt 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 Andrew Delios, Donna Jimenez, Clarissa Turner 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.
High switching costs
– The high switching costs that Tax Rspt 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.
High brand equity
– Tax Rspt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tax Rspt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Tax Rspt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Tax Rspt is one of the leading recruiters in the industry. Managers in the Australian Miners and the Resource Super Profit Tax are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Tax Rspt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tax Rspt 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.
Ability to lead change in Strategy & Execution field
– Tax Rspt 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 Tax Rspt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Australian Miners and the Resource Super Profit Tax | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Australian Miners and the Resource Super Profit Tax are -
Interest costs
– Compare to the competition, Tax Rspt 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Australian Miners and the Resource Super Profit Tax, in the dynamic environment Tax Rspt has struggled to respond to the nimble upstart competition. Tax Rspt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Tax Rspt 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 - Australian Miners and the Resource Super Profit Tax should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Australian Miners and the Resource Super Profit Tax, it seems that the employees of Tax Rspt 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.
Need for greater diversity
– Tax Rspt 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 Australian Miners and the Resource Super Profit Tax, is just above the industry average. Tax Rspt 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.
Increasing silos among functional specialists
– The organizational structure of Tax Rspt is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tax Rspt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tax Rspt to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Australian Miners and the Resource Super Profit Tax HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tax Rspt has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Tax Rspt 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 strategic competitive environment developments
– As Australian Miners and the Resource Super Profit Tax HBR case study mentions - Tax Rspt 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 Australian Miners and the Resource Super Profit Tax 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 Australian Miners and the Resource Super Profit Tax can leverage the sales team experience to cultivate customer relationships as Tax Rspt is planning to shift buying processes online.
Opportunities Australian Miners and the Resource Super Profit Tax | 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 Australian Miners and the Resource Super Profit Tax are -
Buying journey improvements
– Tax Rspt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Australian Miners and the Resource Super Profit Tax 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.
Using analytics as competitive advantage
– Tax Rspt 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 Australian Miners and the Resource Super Profit Tax - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tax Rspt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tax Rspt 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.
Creating value in data economy
– The success of analytics program of Tax Rspt has opened avenues for new revenue streams for the organization in the industry. This can help Tax Rspt to build a more holistic ecosystem as suggested in the Australian Miners and the Resource Super Profit Tax case study. Tax Rspt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Tax Rspt to increase its market reach. Tax Rspt 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.
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 Tax Rspt 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tax Rspt is facing challenges because of the dominance of functional experts in the organization. Australian Miners and the Resource Super Profit Tax 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.
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. Tax Rspt 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. Tax Rspt 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tax Rspt can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Tax Rspt can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Tax Rspt 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.
Building a culture of innovation
– managers at Tax Rspt 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.
Loyalty marketing
– Tax Rspt 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.
Threats Australian Miners and the Resource Super Profit Tax External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Australian Miners and the Resource Super Profit Tax are -
Consumer confidence and its impact on Tax Rspt 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.
High dependence on third party suppliers
– Tax Rspt 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.
Increasing wage structure of Tax Rspt
– 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 Tax Rspt.
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 Tax Rspt in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tax Rspt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Tax Rspt needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tax Rspt can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Australian Miners and the Resource Super Profit Tax .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Australian Miners and the Resource Super Profit Tax, Tax Rspt 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 .
Stagnating economy with rate increase
– Tax Rspt can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Tax Rspt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Tax Rspt 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. Tax Rspt can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Tax Rspt business can come under increasing regulations regarding data privacy, data security, etc.
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 Tax Rspt.
Weighted SWOT Analysis of Australian Miners and the Resource Super Profit Tax 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 Australian Miners and the Resource Super Profit Tax 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 Australian Miners and the Resource Super Profit Tax 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 Australian Miners and the Resource Super Profit Tax 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 Australian Miners and the Resource Super Profit Tax 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 Tax Rspt needs to make to build a sustainable competitive advantage.
