Case Study Description of Zeta Mining: Walking the Dragline
Zeta Mining, one of the world's largest producers of metallurgical coal, operates a number of mines in the Bowen Basin, Central Queensland, Australia. The company has invested about AU$8 billion in the region. Before extracting the coal, the overburden of dirt, rock and other geological waste has to be removed, and this is usually done by draglines, which are imported from the United States and constructed on site, requiring a significant investment in time and money. In 2012, Zeta's chief financial officer tasked the Bowen Basin project evaluation director to decide whether to "walk" one of the 3,400-tonne draglines six kilometres to another mine or to employ external contractors to remove that mine's overburden. To do so, the director was required to perform an incremental comparison analysis using net present value methodology. The CFO will then use the analysis and any other relevant factors in making a final decision. Author Scott McCarthy is affiliated with University of Queensland.
Swot Analysis of "Zeta Mining: Walking the Dragline" written by Scott McCarthy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Draglines Overburden facing as an external strategic factors. Some of the topics covered in Zeta Mining: Walking the Dragline case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Zeta Mining: Walking the Dragline casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, technology disruption, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Zeta Mining: Walking the Dragline
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zeta Mining: Walking the Dragline case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Draglines Overburden, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Draglines Overburden 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 Zeta Mining: Walking the Dragline can be done for the following purposes –
1. Strategic planning using facts provided in Zeta Mining: Walking the Dragline case study
2. Improving business portfolio management of Draglines Overburden
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Draglines Overburden
Strengths Zeta Mining: Walking the Dragline | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Draglines Overburden in Zeta Mining: Walking the Dragline Harvard Business Review case study are -
Ability to recruit top talent
– Draglines Overburden is one of the leading recruiters in the industry. Managers in the Zeta Mining: Walking the Dragline are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Draglines Overburden
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Draglines Overburden does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Draglines Overburden is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Draglines Overburden has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Draglines Overburden 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.
Operational resilience
– The operational resilience strategy in the Zeta Mining: Walking the Dragline 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.
Cross disciplinary teams
– Horizontal connected teams at the Draglines Overburden 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.
Ability to lead change in Finance & Accounting field
– Draglines Overburden 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 Draglines Overburden in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Draglines Overburden digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Draglines Overburden 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.
Low bargaining power of suppliers
– Suppliers of Draglines Overburden in the sector have low bargaining power. Zeta Mining: Walking the Dragline has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Draglines Overburden to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Draglines Overburden 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 Scott McCarthy 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.
Learning organization
- Draglines Overburden 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 Draglines Overburden is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Zeta Mining: Walking the Dragline Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Draglines Overburden 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 Zeta Mining: Walking the Dragline HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Zeta Mining: Walking the Dragline | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zeta Mining: Walking the Dragline are -
Workers concerns about automation
– As automation is fast increasing in the segment, Draglines Overburden 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.
Interest costs
– Compare to the competition, Draglines Overburden 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.
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 Draglines Overburden supply chain. Even after few cautionary changes mentioned in the HBR case study - Zeta Mining: Walking the Dragline, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Draglines Overburden vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Draglines Overburden has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Zeta Mining: Walking the Dragline, in the dynamic environment Draglines Overburden has struggled to respond to the nimble upstart competition. Draglines Overburden has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Zeta Mining: Walking the Dragline 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 Draglines Overburden has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Draglines Overburden is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Zeta Mining: Walking the Dragline can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Draglines Overburden products
– To increase the profitability and margins on the products, Draglines Overburden needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Zeta Mining: Walking the Dragline 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 Zeta Mining: Walking the Dragline can leverage the sales team experience to cultivate customer relationships as Draglines Overburden is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Zeta Mining: Walking the Dragline, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Zeta Mining: Walking the Dragline 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 Draglines Overburden 's lucrative customers.
Opportunities Zeta Mining: Walking the Dragline | 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 Zeta Mining: Walking the Dragline are -
Learning at scale
– Online learning technologies has now opened space for Draglines Overburden 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.
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 Draglines Overburden 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.
Loyalty marketing
– Draglines Overburden 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.
Developing new processes and practices
– Draglines Overburden can develop new processes and procedures in Finance & Accounting 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.
Building a culture of innovation
– managers at Draglines Overburden 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 Finance & Accounting segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Draglines Overburden 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Draglines Overburden can use these opportunities to build new business models that can help the communities that Draglines Overburden operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Draglines Overburden in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Draglines Overburden to increase its market reach. Draglines Overburden 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.
Buying journey improvements
– Draglines Overburden can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Zeta Mining: Walking the Dragline 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.
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 Draglines Overburden in the consumer business. Now Draglines Overburden can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Draglines Overburden 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 Draglines Overburden to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Draglines Overburden has opened avenues for new revenue streams for the organization in the industry. This can help Draglines Overburden to build a more holistic ecosystem as suggested in the Zeta Mining: Walking the Dragline case study. Draglines Overburden can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Zeta Mining: Walking the Dragline External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zeta Mining: Walking the Dragline are -
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 Draglines Overburden in the Finance & Accounting 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 Draglines Overburden with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Draglines Overburden needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Draglines Overburden has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Draglines Overburden needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Draglines Overburden.
Increasing wage structure of Draglines Overburden
– 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 Draglines Overburden.
High dependence on third party suppliers
– Draglines Overburden 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 Draglines Overburden in the Finance & Accounting industry. The Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that Draglines Overburden is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Draglines Overburden can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Draglines Overburden 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.
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. Draglines Overburden 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.
Weighted SWOT Analysis of Zeta Mining: Walking the Dragline 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 Zeta Mining: Walking the Dragline 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 Zeta Mining: Walking the Dragline 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 Zeta Mining: Walking the Dragline 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 Zeta Mining: Walking the Dragline 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 Draglines Overburden needs to make to build a sustainable competitive advantage.