Based on various researches at Oak Spring University , Kazakhstan Potash Corp Ltd is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing energy prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, geopolitical disruptions,
increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Kazakhstan Potash Corp Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kazakhstan Potash Corp Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kazakhstan Potash Corp Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd can be done for the following purposes –
1. Strategic planning of Kazakhstan Potash Corp Ltd
2. Improving business portfolio management of Kazakhstan Potash Corp Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Non-Metallic Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kazakhstan Potash Corp Ltd
Strengths of Kazakhstan Potash Corp Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kazakhstan Potash Corp Ltd are -
Ability to lead change in Non-Metallic Mining
– Kazakhstan Potash Corp Ltd is one of the leading players in the Non-Metallic Mining industry in Australia. Over the years it has not only transformed the business landscape in the Non-Metallic Mining industry in Australia but also across the existing markets. The ability to lead change has enabled Kazakhstan Potash Corp Ltd 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 Non-Metallic Mining industry
– Kazakhstan Potash Corp Ltd has clearly differentiated products in the market place. This has enabled Kazakhstan Potash Corp Ltd to fetch slight price premium compare to the competitors in the Non-Metallic Mining industry. The sustainable margins have also helped Kazakhstan Potash Corp Ltd to invest into research and development (R&D) and innovation.
Organizational Resilience of Kazakhstan Potash Corp Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kazakhstan Potash Corp Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Kazakhstan Potash Corp Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Non-Metallic Mining industry. Secondly the value chain collaborators of Kazakhstan Potash Corp Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Kazakhstan Potash Corp Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kazakhstan Potash Corp Ltd staying ahead in the Non-Metallic Mining industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Kazakhstan Potash Corp Ltd comprises – understanding the underlying the factors in the Non-Metallic Mining 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.
High brand equity
– Kazakhstan Potash Corp Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kazakhstan Potash Corp Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Kazakhstan Potash Corp Ltd 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.
Successful track record of launching new products
– Kazakhstan Potash Corp Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kazakhstan Potash Corp Ltd 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.
Training and development
– Kazakhstan Potash Corp Ltd has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Kazakhstan Potash Corp Ltd in the Basic Materials sector have low bargaining power. Kazakhstan Potash Corp Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kazakhstan Potash Corp Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Kazakhstan Potash Corp Ltd is present in almost all the verticals within the Non-Metallic Mining industry. This has provided Kazakhstan Potash Corp Ltd 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.
Weaknesses of Kazakhstan Potash Corp Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kazakhstan Potash Corp Ltd are -
Aligning sales with marketing
– From the outside it seems that Kazakhstan Potash Corp Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Non-Metallic Mining industry have deep experience in developing customer relationships. Marketing department at Kazakhstan Potash Corp Ltd can leverage the sales team experience to cultivate customer relationships as Kazakhstan Potash Corp Ltd is planning to shift buying processes online.
Products dominated business model
– Even though Kazakhstan Potash Corp Ltd has some of the most successful models in the Non-Metallic Mining industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Kazakhstan Potash Corp Ltd should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Non-Metallic Mining industry
– The stress on hiring functional specialists at Kazakhstan Potash Corp Ltd 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.
Increasing silos among functional specialists
– The organizational structure of Kazakhstan Potash Corp Ltd is dominated by functional specialists. It is not different from other players in the Non-Metallic Mining industry, but Kazakhstan Potash Corp Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kazakhstan Potash Corp Ltd to focus more on services in the Non-Metallic Mining industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Kazakhstan Potash Corp Ltd has a high cash cycle compare to other players in the Non-Metallic Mining industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Kazakhstan Potash Corp Ltd 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 Non-Metallic Mining industry using digital technology.
High operating costs
– Compare to the competitors, Kazakhstan Potash Corp Ltd has high operating costs in the Non-Metallic Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kazakhstan Potash Corp Ltd lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Kazakhstan Potash Corp Ltd, in the dynamic environment of Non-Metallic Mining industry it has struggled to respond to the nimble upstart competition. Kazakhstan Potash Corp Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Non-Metallic Mining industry, Kazakhstan Potash Corp Ltd 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 decision making process
– As mentioned earlier in the report, Kazakhstan Potash Corp Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Non-Metallic Mining industry over the last five years. Kazakhstan Potash Corp Ltd 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.
Low market penetration in new markets
– Outside its home market of Australia, Kazakhstan Potash Corp Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Kazakhstan Potash Corp Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kazakhstan Potash Corp Ltd are -
Using analytics as competitive advantage
– Kazakhstan Potash Corp Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Non-Metallic Mining sector. This continuous investment in analytics has enabled Kazakhstan Potash Corp Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kazakhstan Potash Corp Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Kazakhstan Potash Corp Ltd 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 Non-Metallic Mining industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Non-Metallic Mining industry, but it has also influenced the consumer preferences. Kazakhstan Potash Corp Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Kazakhstan Potash Corp Ltd can develop new processes and procedures in Non-Metallic Mining 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.
Leveraging digital technologies
– Kazakhstan Potash Corp Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kazakhstan Potash Corp Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Non-Metallic Mining industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Non-Metallic Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kazakhstan Potash Corp Ltd in the Non-Metallic Mining industry. Now Kazakhstan Potash Corp Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Kazakhstan Potash Corp Ltd can improve the customer journey of consumers in the Non-Metallic Mining industry by using analytics and artificial intelligence. It 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.
Loyalty marketing
– Kazakhstan Potash Corp Ltd 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.
Learning at scale
– Online learning technologies has now opened space for Kazakhstan Potash Corp Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kazakhstan Potash Corp Ltd is facing challenges because of the dominance of functional experts in the organization. Kazakhstan Potash Corp Ltd can utilize new technology in the field of Non-Metallic Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Kazakhstan Potash Corp Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kazakhstan Potash Corp Ltd are -
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 Kazakhstan Potash Corp Ltd in the Non-Metallic Mining sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Kazakhstan Potash Corp Ltd has witnessed rapid integration of technology during Covid-19 in the Non-Metallic Mining industry. As one of the leading players in the industry, Kazakhstan Potash Corp Ltd needs to keep up with the evolution of technology in the Non-Metallic Mining 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.
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 Kazakhstan Potash Corp Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kazakhstan Potash Corp Ltd in Non-Metallic Mining industry. The Non-Metallic Mining 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kazakhstan Potash Corp Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Non-Metallic Mining sector.
Consumer confidence and its impact on Kazakhstan Potash Corp Ltd 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 Non-Metallic Mining industry and other sectors.
Stagnating economy with rate increase
– Kazakhstan Potash Corp Ltd 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 Non-Metallic Mining industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd prominent markets.
Easy access to finance
– Easy access to finance in Non-Metallic Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kazakhstan Potash Corp Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Kazakhstan Potash Corp Ltd is facing in Non-Metallic Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Kazakhstan Potash Corp Ltd 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. Kazakhstan Potash Corp Ltd can take advantage of this fund but it will also bring new competitors in the Non-Metallic Mining industry.
High dependence on third party suppliers
– Kazakhstan Potash Corp Ltd 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.
Weighted SWOT Analysis of Kazakhstan Potash Corp Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd 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 Kazakhstan Potash Corp Ltd needs to make to build a sustainable competitive advantage.