Rio Tinto's Ore Mining: Making Hay from Water SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rio Tinto's Ore Mining: Making Hay from Water
When the Rio Tinto mining company decided to increase its output of iron ore by 25% in its Marandoo location, it had to deal with an unexpected problem: an excess of water in the deep reaches of the mine. Because freshwater is a scarce resource in this region of Australia, Rio Tinto's challenge was to come up with a comprehensive water strategy for the region. This case is used in Darden's "Economics of Water" course elective.
Swot Analysis of "Rio Tinto's Ore Mining: Making Hay from Water" written by Peter Debaere includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rio Water facing as an external strategic factors. Some of the topics covered in Rio Tinto's Ore Mining: Making Hay from Water case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Rio Tinto's Ore Mining: Making Hay from Water casestudy better are - – geopolitical disruptions, wage bills are increasing, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Rio Tinto's Ore Mining: Making Hay from Water
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rio Tinto's Ore Mining: Making Hay from Water case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rio Water, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rio Water 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 Rio Tinto's Ore Mining: Making Hay from Water can be done for the following purposes –
1. Strategic planning using facts provided in Rio Tinto's Ore Mining: Making Hay from Water case study
2. Improving business portfolio management of Rio Water
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rio Water
Strengths Rio Tinto's Ore Mining: Making Hay from Water | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rio Water in Rio Tinto's Ore Mining: Making Hay from Water Harvard Business Review case study are -
Analytics focus
– Rio Water 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 Peter Debaere can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Rio Water has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rio Water to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Rio Water 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Rio Water digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rio Water 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.
Strong track record of project management
– Rio Water is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Rio Water 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.
Superior customer experience
– The customer experience strategy of Rio Water in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Rio Water 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 Rio Water is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rio Tinto's Ore Mining: Making Hay from Water Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Rio Water is one of the most innovative firm in sector. Manager in Rio Tinto's Ore Mining: Making Hay from Water Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Rio Water has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rio Tinto's Ore Mining: Making Hay from Water 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.
Ability to lead change in Global Business field
– Rio Water 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 Rio Water 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 Global Business industry
– Rio Tinto's Ore Mining: Making Hay from Water firm has clearly differentiated products in the market place. This has enabled Rio Water to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Rio Water to invest into research and development (R&D) and innovation.
Weaknesses Rio Tinto's Ore Mining: Making Hay from Water | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rio Tinto's Ore Mining: Making Hay from Water are -
High bargaining power of channel partners
– Because of the regulatory requirements, Peter Debaere suggests that, Rio Water is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Rio Water products
– To increase the profitability and margins on the products, Rio Water needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Rio Tinto's Ore Mining: Making Hay from Water, in the dynamic environment Rio Water has struggled to respond to the nimble upstart competition. Rio Water has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Rio Tinto's Ore Mining: Making Hay from Water HBR case study mentions - Rio Water 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rio Water is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Water has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Water 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Rio Water 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.
Need for greater diversity
– Rio Water has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water can leverage the sales team experience to cultivate customer relationships as Rio Water is planning to shift buying processes online.
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 Rio Water supply chain. Even after few cautionary changes mentioned in the HBR case study - Rio Tinto's Ore Mining: Making Hay from Water, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rio Water vulnerable to further global disruptions in South East Asia.
Opportunities Rio Tinto's Ore Mining: Making Hay from Water | 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 Rio Tinto's Ore Mining: Making Hay from Water are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rio Water is facing challenges because of the dominance of functional experts in the organization. Rio Tinto's Ore Mining: Making Hay from Water 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.
Using analytics as competitive advantage
– Rio Water has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Rio Tinto's Ore Mining: Making Hay from Water - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rio Water to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Rio Water can develop new processes and procedures in Global Business 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.
Creating value in data economy
– The success of analytics program of Rio Water has opened avenues for new revenue streams for the organization in the industry. This can help Rio Water to build a more holistic ecosystem as suggested in the Rio Tinto's Ore Mining: Making Hay from Water case study. Rio Water can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rio Water can use these opportunities to build new business models that can help the communities that Rio Water operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Rio Water can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rio Tinto's Ore Mining: Making Hay from Water 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rio Water in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Rio Water 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 Global Business segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rio Water 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, Rio Tinto's Ore Mining: Making Hay from Water, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Rio Water in the consumer business. Now Rio Water can target international markets with far fewer capital restrictions requirements than the existing system.
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 Rio Water 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.
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. Rio Water can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Rio Water 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.
Threats Rio Tinto's Ore Mining: Making Hay from Water External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rio Tinto's Ore Mining: Making Hay from Water are -
Technology acceleration in Forth Industrial Revolution
– Rio Water has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Rio Water needs to keep up with the evolution of technology in the Global Business 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.
Increasing wage structure of Rio Water
– 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 Rio Water.
Regulatory challenges
– Rio Water 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 Global Business industry regulations.
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 Rio Water.
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. Rio Water needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rio Water 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.
Environmental challenges
– Rio Water 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. Rio Water can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Shortening product life cycle
– it is one of the major threat that Rio Water is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Rio Water in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Rio Water 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.
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. Rio Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Tinto's Ore Mining: Making Hay from Water 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 Rio Water needs to make to build a sustainable competitive advantage.
