Minera Las Piedras of Chile: The Fruits of Copper SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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 - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
technology disruption, supply chains are disrupted by pandemic , 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 -
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.
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.
Learning organization
- Piedras Minera 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 Piedras Minera is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Minera Las Piedras of Chile: The Fruits of Copper Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Diverse revenue streams
– Piedras Minera is present in almost all the verticals within the industry. This has provided firm in Minera Las Piedras of Chile: The Fruits of Copper 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.
Cross disciplinary teams
– Horizontal connected teams at the Piedras Minera 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 recruit top talent
– Piedras Minera is one of the leading recruiters in the industry. Managers in the Minera Las Piedras of Chile: The Fruits of Copper are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Piedras Minera 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.
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.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Piedras Minera digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Piedras Minera 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 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.
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 -
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Piedras Minera is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Piedras Minera needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Piedras Minera to focus more on services rather than just following the product oriented approach.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Piedras Minera is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Minera Las Piedras of Chile: The Fruits of Copper can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Piedras Minera 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. Piedras Minera 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Minera Las Piedras of Chile: The Fruits of Copper 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 Piedras Minera has relatively successful track record of launching new products.
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 -
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Piedras Minera 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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Piedras Minera 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.
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.
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.
Manufacturing automation
– Piedras Minera can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Piedras Minera has opened avenues for new revenue streams for the organization in the industry. This can help Piedras Minera to build a more holistic ecosystem as suggested in the Minera Las Piedras of Chile: The Fruits of Copper case study. Piedras Minera 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. Piedras Minera can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Stagnating economy with rate increase
– Piedras Minera 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.
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.
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.
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.
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.
Environmental challenges
– Piedras Minera 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. Piedras Minera can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Piedras Minera has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Piedras Minera 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Minera Las Piedras of Chile: The Fruits of Copper, Piedras Minera may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Piedras Minera 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 Minera Las Piedras of Chile: The Fruits of Copper .
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.
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.
