Case Study Description of Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis
Chronicles the development of Freeport's nearly 30 years of mining operations in Indonesia. Building on a mining concession awarded by the country's government, headed by General Suharto, in 1973, Freeport steadily built its mining output to nearly 200,000 cubic feet/day of ore, rich in copper. In spite of the company's attempts to address environmental issues and the stakes of indigenous people, critics were unimpressed by the company's efforts to improve. With the toppling of the Suharto regime in 1998, the company has to survive under a new government.
Swot Analysis of "Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis" written by V. Kasturi Rangan, Arthur McCaffrey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suharto Freeport facing as an external strategic factors. Some of the topics covered in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing energy prices, technology disruption, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suharto Freeport, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suharto Freeport 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis can be done for the following purposes –
1. Strategic planning using facts provided in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis case study
2. Improving business portfolio management of Suharto Freeport
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 Suharto Freeport
Strengths Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suharto Freeport in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis firm has clearly differentiated products in the market place. This has enabled Suharto Freeport to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Suharto Freeport to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Suharto Freeport in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Suharto Freeport 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.
Analytics focus
– Suharto Freeport 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 V. Kasturi Rangan, Arthur McCaffrey 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.
Operational resilience
– The operational resilience strategy in the Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Suharto Freeport 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.
Strong track record of project management
– Suharto Freeport is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Suharto Freeport is one of the leading recruiters in the industry. Managers in the Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Suharto Freeport in the sector have low bargaining power. Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suharto Freeport to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Suharto Freeport 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Suharto Freeport 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 Suharto Freeport is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Suharto Freeport has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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.
Weaknesses Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis are -
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 Suharto Freeport supply chain. Even after few cautionary changes mentioned in the HBR case study - Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suharto Freeport vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Suharto Freeport has relatively successful track record of launching new products.
High cash cycle compare to competitors
Suharto Freeport 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.
Products dominated business model
– Even though Suharto Freeport 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 - Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, it seems that the employees of Suharto Freeport 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, in the dynamic environment Suharto Freeport has struggled to respond to the nimble upstart competition. Suharto Freeport has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Suharto Freeport, firm in the HBR case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Suharto Freeport products
– To increase the profitability and margins on the products, Suharto Freeport needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Suharto Freeport 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. Suharto Freeport 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Suharto Freeport 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, V. Kasturi Rangan, Arthur McCaffrey suggests that, Suharto Freeport 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.
Opportunities Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis | 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Suharto Freeport can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Suharto Freeport 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.
Leveraging digital technologies
– Suharto Freeport 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Suharto Freeport 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, Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, 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 Suharto Freeport in the consumer business. Now Suharto Freeport 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 Suharto Freeport 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 Suharto Freeport to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Suharto Freeport can use the latest technology developments to improve its manufacturing and designing process in Global Business 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 Suharto Freeport has opened avenues for new revenue streams for the organization in the industry. This can help Suharto Freeport to build a more holistic ecosystem as suggested in the Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis case study. Suharto Freeport can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Suharto Freeport 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suharto Freeport 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. Suharto Freeport 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suharto Freeport can use these opportunities to build new business models that can help the communities that Suharto Freeport operates in. Secondly it can use opportunities from government spending in Global Business sector.
Learning at scale
– Online learning technologies has now opened space for Suharto Freeport 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.
Buying journey improvements
– Suharto Freeport can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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.
Threats Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis are -
High dependence on third party suppliers
– Suharto Freeport 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.
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. Suharto Freeport needs to understand the core reasons impacting the Global Business 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 Suharto Freeport in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Suharto Freeport 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. Suharto Freeport can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Suharto Freeport business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, Suharto Freeport may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Suharto Freeport 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.
Stagnating economy with rate increase
– Suharto Freeport 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suharto Freeport can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Suharto Freeport has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Suharto Freeport 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Suharto Freeport in the Global Business industry. The Global Business 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.
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 Suharto Freeport.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suharto Freeport 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis .
Weighted SWOT Analysis of Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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 Suharto Freeport needs to make to build a sustainable competitive advantage.