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 - – there is backlash against globalization, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, increasing commodity prices, 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 -
Successful track record of launching new products
– Suharto Freeport has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suharto Freeport has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the 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.
Diverse revenue streams
– Suharto Freeport is present in almost all the verticals within the industry. This has provided firm in Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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.
Highly skilled collaborators
– Suharto Freeport 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Organizational Resilience of Suharto Freeport
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Suharto Freeport does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Suharto Freeport digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suharto Freeport 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.
Ability to lead change in Global Business field
– Suharto Freeport 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 Suharto Freeport in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
Interest costs
– Compare to the competition, Suharto Freeport has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suharto Freeport is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Suharto Freeport 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Suharto Freeport 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.
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.
Need for greater diversity
– Suharto Freeport 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.
No frontier risks strategy
– After analyzing the HBR case study Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis, it seems that company is thinking about the frontier risks that can impact Global Business 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Suharto Freeport needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis HBR case study mentions - Suharto Freeport 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.
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 -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Suharto Freeport can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Suharto Freeport is facing challenges because of the dominance of functional experts in the organization. Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis 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.
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.
Developing new processes and practices
– Suharto Freeport 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.
Using analytics as competitive advantage
– Suharto Freeport 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 Freeport Mine, Irian Jaya, Indonesia: "Tailings & Failings"--Stakeholder Analysis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Suharto Freeport to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Suharto Freeport 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.
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 -
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High 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.
Regulatory challenges
– Suharto Freeport 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.
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.
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.
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.
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 .
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.
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.
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.
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.
Increasing wage structure of Suharto Freeport
– 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 Suharto Freeport.
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.
