Minera Las Piedras of Chile: The Fruits of Copper SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Minera Las Piedras of Chile: The Fruits of Copper
The leadership of Minera Las Piedras (MLP) of Chile, a privately held Chilean copper mining company, had an unusual problem in January 2005: the company had too much money. The company had earned $500 million more than expected in 2004, and as a result was now exploring its alternative uses for the funds. Although all agreed it was a nice problem, it still presented leadership with a rather complex set of choices of how and where to invest or distribute these new-found riches
Swot Analysis of "Minera Las Piedras of Chile: The Fruits of Copper" written by Michael Moffett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Piedras Minera facing as an external strategic factors. Some of the topics covered in Minera Las Piedras of Chile: The Fruits of Copper case study are - Strategic Management Strategies, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Minera Las Piedras of Chile: The Fruits of Copper casestudy better are - – central banks are concerned over increasing inflation, increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Minera Las Piedras of Chile: The Fruits of Copper
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Minera Las Piedras of Chile: The Fruits of Copper case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Piedras Minera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Piedras Minera 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 Minera Las Piedras of Chile: The Fruits of Copper can be done for the following purposes –
1. Strategic planning using facts provided in Minera Las Piedras of Chile: The Fruits of Copper case study
2. Improving business portfolio management of Piedras Minera
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 Piedras Minera
Strengths Minera Las Piedras of Chile: The Fruits of Copper | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Piedras Minera in Minera Las Piedras of Chile: The Fruits of Copper Harvard Business Review case study are -
Training and development
– Piedras Minera has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Minera Las Piedras of Chile: The Fruits of Copper 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.
Superior customer experience
– The customer experience strategy of Piedras Minera in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Minera Las Piedras of Chile: The Fruits of Copper 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.
Strong track record of project management
– Piedras Minera is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Piedras Minera 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 Minera Las Piedras of Chile: The Fruits of Copper - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Piedras Minera in the sector have low bargaining power. Minera Las Piedras of Chile: The Fruits of Copper has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Piedras Minera to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Piedras Minera has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Piedras Minera 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.
Analytics focus
– Piedras Minera 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 Michael Moffett 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.
Ability to lead change in Finance & Accounting field
– Piedras Minera 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 Piedras Minera in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Minera Las Piedras of Chile: The Fruits of Copper firm has clearly differentiated products in the market place. This has enabled Piedras Minera to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Piedras Minera to invest into research and development (R&D) and innovation.
Innovation driven organization
– Piedras Minera is one of the most innovative firm in sector. Manager in Minera Las Piedras of Chile: The Fruits of Copper Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Piedras Minera 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 Minera Las Piedras of Chile: The Fruits of Copper HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Minera Las Piedras of Chile: The Fruits of Copper | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Minera Las Piedras of Chile: The Fruits of Copper are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Minera Las Piedras of Chile: The Fruits of Copper, is just above the industry average. Piedras Minera 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.
Products dominated business model
– Even though Piedras Minera 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 - Minera Las Piedras of Chile: The Fruits of Copper should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Piedras Minera 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.
Slow to strategic competitive environment developments
– As Minera Las Piedras of Chile: The Fruits of Copper HBR case study mentions - Piedras Minera 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 Minera Las Piedras of Chile: The Fruits of Copper 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 Minera Las Piedras of Chile: The Fruits of Copper can leverage the sales team experience to cultivate customer relationships as Piedras Minera is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Piedras Minera, firm in the HBR case study Minera Las Piedras of Chile: The Fruits of Copper needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Minera Las Piedras of Chile: The Fruits of Copper, it seems that the employees of Piedras Minera 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.
High cash cycle compare to competitors
Piedras Minera 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.
No frontier risks strategy
– After analyzing the HBR case study Minera Las Piedras of Chile: The Fruits of Copper, 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.
Capital Spending Reduction
– Even during the low interest decade, Piedras Minera 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.
Lack of clear differentiation of Piedras Minera products
– To increase the profitability and margins on the products, Piedras Minera needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Minera Las Piedras of Chile: The Fruits of Copper | 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 Minera Las Piedras of Chile: The Fruits of Copper are -
Leveraging digital technologies
– Piedras Minera 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.
Better consumer reach
– The expansion of the 5G network will help Piedras Minera to increase its market reach. Piedras Minera 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 Piedras Minera 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Piedras Minera 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 Piedras Minera to hire the very best people irrespective of their geographical location.
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 Piedras Minera in the consumer business. Now Piedras Minera can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Piedras Minera 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Piedras Minera 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, Minera Las Piedras of Chile: The Fruits of Copper, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Piedras Minera 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Piedras Minera can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Piedras Minera can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Minera Las Piedras of Chile: The Fruits of Copper 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Piedras Minera 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. Piedras Minera 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
– Piedras Minera 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.
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 Piedras Minera 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.
Threats Minera Las Piedras of Chile: The Fruits of Copper External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Minera Las Piedras of Chile: The Fruits of Copper are -
Regulatory challenges
– Piedras Minera 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 Finance & Accounting industry regulations.
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 Piedras Minera business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Piedras Minera is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Piedras Minera 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.
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.
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. Piedras Minera needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Piedras Minera in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Piedras Minera 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.
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 Piedras Minera.
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. Piedras Minera can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Piedras Minera 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.
Increasing wage structure of Piedras Minera
– 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 Piedras Minera.
Weighted SWOT Analysis of Minera Las Piedras of Chile: The Fruits of Copper 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 Minera Las Piedras of Chile: The Fruits of Copper 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 Minera Las Piedras of Chile: The Fruits of Copper 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 Minera Las Piedras of Chile: The Fruits of Copper 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 Minera Las Piedras of Chile: The Fruits of Copper 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 Piedras Minera needs to make to build a sustainable competitive advantage.