Sovereign Metals (SVM) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sovereign Metals (Australia)

Based on various researches at Oak Spring University , Sovereign Metals is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, wage bills are increasing, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing commodity prices, etc

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Introduction to SWOT Analysis of Sovereign Metals

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sovereign Metals can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sovereign Metals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sovereign Metals 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Sovereign Metals can be done for the following purposes –
1. Strategic planning of Sovereign Metals
2. Improving business portfolio management of Sovereign Metals
3. Assessing feasibility of the new initiative in Australia
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sovereign Metals

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Strengths of Sovereign Metals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sovereign Metals are -

Analytics focus

– Sovereign Metals 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 Gold & Silver industry. The technology infrastructure of Australia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Strong track record of project management in the Gold & Silver industry

– Sovereign Metals is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Diverse revenue streams

– Sovereign Metals is present in almost all the verticals within the Gold & Silver industry. This has provided Sovereign Metals 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.

Learning organization

- Sovereign Metals 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 Sovereign Metals is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sovereign Metals emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Gold & Silver industry

– Sovereign Metals has clearly differentiated products in the market place. This has enabled Sovereign Metals to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Sovereign Metals to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of Sovereign Metals in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– Sovereign Metals has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sovereign Metals staying ahead in the Gold & Silver industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Innovation driven organization

– Sovereign Metals is one of the most innovative firm in Gold & Silver sector.

Digital Transformation in Gold & Silver industry

- digital transformation varies from industry to industry. For Sovereign Metals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sovereign Metals 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.

Organizational Resilience of Sovereign Metals

– The covid-19 pandemic has put organizational resilience at the centre of everthing Sovereign Metals does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy of Sovereign Metals comprises – understanding the underlying the factors in the Gold & Silver 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.

Low bargaining power of suppliers

– Suppliers of Sovereign Metals in the Basic Materials sector have low bargaining power. Sovereign Metals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sovereign Metals to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses of Sovereign Metals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sovereign Metals are -

No frontier risks strategy

– From the 10K / annual statement of Sovereign Metals, it seems that company is thinking out the frontier risks that can impact Gold & Silver industry. 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.

High dependence on Sovereign Metals ‘s star products

– The top 2 products and services of Sovereign Metals still accounts for major business revenue. This dependence on star products in Gold & Silver industry has resulted into insufficient focus on developing new products, even though Sovereign Metals has relatively successful track record of launching new products.

Skills based hiring in Gold & Silver industry

– The stress on hiring functional specialists at Sovereign Metals 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.

Low market penetration in new markets

– Outside its home market of Australia, Sovereign Metals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– Sovereign Metals 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.

Slow decision making process

– As mentioned earlier in the report, Sovereign Metals has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Gold & Silver industry over the last five years. Sovereign Metals 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 bargaining power of channel partners in Gold & Silver industry

– because of the regulatory requirements in Australia, Sovereign Metals 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 Gold & Silver industry.

Products dominated business model

– Even though Sovereign Metals has some of the most successful models in the Gold & Silver industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sovereign Metals should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Sovereign Metals products

– To increase the profitability and margins on the products, Sovereign Metals needs to provide more differentiated products than what it is currently offering in the marketplace.

Employees’ less understanding of Sovereign Metals strategy

– From the outside it seems that the employees of Sovereign Metals 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.

Increasing silos among functional specialists

– The organizational structure of Sovereign Metals is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but Sovereign Metals needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sovereign Metals to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.

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Sovereign Metals Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sovereign Metals are -

Loyalty marketing

– Sovereign Metals 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Sovereign Metals can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Sovereign Metals can develop new processes and procedures in Gold & Silver 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.

Buying journey improvements

– Sovereign Metals can improve the customer journey of consumers in the Gold & Silver 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Gold & Silver industry, but it has also influenced the consumer preferences. Sovereign Metals can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of Sovereign Metals has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Sovereign Metals to build a more holistic ecosystem for Sovereign Metals products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Sovereign Metals 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 Gold & Silver industry.

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. Sovereign Metals can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sovereign Metals 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 Sovereign Metals to hire the very best people irrespective of their geographical location.

Better consumer reach

– The expansion of the 5G network will help Sovereign Metals to increase its market reach. Sovereign Metals will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Manufacturing automation

– Sovereign Metals can use the latest technology developments to improve its manufacturing and designing process in Gold & Silver sector. 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Gold & Silver industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sovereign Metals 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. Sovereign Metals 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.

Learning at scale

– Online learning technologies has now opened space for Sovereign Metals 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.

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Threats Sovereign Metals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sovereign Metals are -

Environmental challenges

– Sovereign Metals 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. Sovereign Metals can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.

Easy access to finance

– Easy access to finance in Gold & Silver industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sovereign Metals can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Sovereign Metals.

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 Sovereign Metals business can come under increasing regulations regarding data privacy, data security, etc.

Technology acceleration in Forth Industrial Revolution

– Sovereign Metals has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, Sovereign Metals needs to keep up with the evolution of technology in the Gold & Silver sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Sovereign Metals may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Gold & Silver sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sovereign Metals 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 Sovereign Metals prominent markets.

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. Sovereign Metals needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Sovereign Metals is facing in Gold & Silver 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 Sovereign Metals in the Gold & Silver sector and impact the bottomline of the organization.

Increasing wage structure of Sovereign Metals

– 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 Sovereign Metals.

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.

Regulatory challenges

– Sovereign Metals 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 Gold & Silver industry regulations.

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Weighted SWOT Analysis of Sovereign Metals Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sovereign Metals 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 Sovereign Metals 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 Sovereign Metals 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 Sovereign Metals 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 Sovereign Metals needs to make to build a sustainable competitive advantage.

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