Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining
In January 2017, Banro Corporation, a Canadian gold mining company in the Democratic Republic of Congo, underwent recapitalization to cope with financial distress, and to optimize its operations of mining assets. Since the commencement of commercial mining in 2009, unexpected social conflicts and operational challenges had led to significantly lower production than expected, with a large cost overrun, while the price of gold declined sharply from 2012. Would the recapitalization enable Banro Corporation to carry out its medium-term strategic plan of incremental growth by operational improvements, through cost reduction and throughput expansion over a five-year horizon? How could the company achieve its long-term goal of being a model of excellence in sustainability? Wiboon Kittilaksanawong is affiliated with Saitama University. Kabi Olivier Katabaruka is affiliated with Nagoya University of Commerce & Business.
Authors :: Wiboon Kittilaksanawong, Kabi Olivier Katabaruka
Swot Analysis of "Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining" written by Wiboon Kittilaksanawong, Kabi Olivier Katabaruka includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banro Recapitalization facing as an external strategic factors. Some of the topics covered in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study are - Strategic Management Strategies, Financial management, Government and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing energy prices,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banro Recapitalization, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banro Recapitalization 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining can be done for the following purposes –
1. Strategic planning using facts provided in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study
2. Improving business portfolio management of Banro Recapitalization
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Banro Recapitalization
Strengths Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banro Recapitalization in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Banro Recapitalization in the sector have low bargaining power. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Banro Recapitalization to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Banro Recapitalization 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 Banro Recapitalization is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Banro Recapitalization has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Banro Recapitalization 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.
High brand equity
– Banro Recapitalization has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Banro Recapitalization to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Banro Recapitalization in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining firm has clearly differentiated products in the market place. This has enabled Banro Recapitalization to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Banro Recapitalization to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Banro Recapitalization 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Banro Recapitalization digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Banro Recapitalization 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.
Cross disciplinary teams
– Horizontal connected teams at the Banro Recapitalization 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.
Operational resilience
– The operational resilience strategy in the Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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.
Analytics focus
– Banro Recapitalization 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 Wiboon Kittilaksanawong, Kabi Olivier Katabaruka 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
– Banro Recapitalization 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining are -
Increasing silos among functional specialists
– The organizational structure of Banro Recapitalization is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Banro Recapitalization needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Banro Recapitalization to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Banro Recapitalization has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Banro Recapitalization 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, Banro Recapitalization is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 star products
– The top 2 products and services of the firm as mentioned in the Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Recapitalization has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Banro Recapitalization 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, in the dynamic environment Banro Recapitalization has struggled to respond to the nimble upstart competition. Banro Recapitalization has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Banro Recapitalization supply chain. Even after few cautionary changes mentioned in the HBR case study - Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Banro Recapitalization vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Banro Recapitalization 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. Banro Recapitalization 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.
Aligning sales with marketing
– It come across in the case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining can leverage the sales team experience to cultivate customer relationships as Banro Recapitalization is planning to shift buying processes online.
Opportunities Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining | 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining are -
Better consumer reach
– The expansion of the 5G network will help Banro Recapitalization to increase its market reach. Banro Recapitalization 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.
Learning at scale
– Online learning technologies has now opened space for Banro Recapitalization 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, Banro Recapitalization 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, Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Banro Recapitalization can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Banro Recapitalization can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Banro Recapitalization 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banro Recapitalization is facing challenges because of the dominance of functional experts in the organization. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Banro Recapitalization in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship 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 Banro Recapitalization 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.
Creating value in data economy
– The success of analytics program of Banro Recapitalization has opened avenues for new revenue streams for the organization in the industry. This can help Banro Recapitalization to build a more holistic ecosystem as suggested in the Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study. Banro Recapitalization can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Banro Recapitalization can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Banro Recapitalization can develop new processes and procedures in Innovation & Entrepreneurship 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banro Recapitalization 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 Banro Recapitalization to hire the very best people irrespective of their geographical location.
Threats Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining are -
Increasing wage structure of Banro Recapitalization
– 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 Banro Recapitalization.
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 Banro Recapitalization business can come under increasing regulations regarding data privacy, data security, etc.
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. Banro Recapitalization needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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. Banro Recapitalization 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.
Stagnating economy with rate increase
– Banro Recapitalization 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Banro Recapitalization 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining .
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.
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 Banro Recapitalization.
High dependence on third party suppliers
– Banro Recapitalization 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, Banro Recapitalization may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Consumer confidence and its impact on Banro Recapitalization 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.
Technology acceleration in Forth Industrial Revolution
– Banro Recapitalization has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Banro Recapitalization needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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.
Weighted SWOT Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining 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 Banro Recapitalization needs to make to build a sustainable competitive advantage.
