KGHM Polska Miedz (0O8D) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for KGHM Polska Miedz (United Kingdom)

Based on various researches at Oak Spring University , KGHM Polska Miedz is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of KGHM Polska Miedz

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KGHM Polska Miedz can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KGHM Polska Miedz, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KGHM Polska Miedz 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 KGHM Polska Miedz can be done for the following purposes –
1. Strategic planning of KGHM Polska Miedz
2. Improving business portfolio management of KGHM Polska Miedz
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KGHM Polska Miedz

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Strengths of KGHM Polska Miedz | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of KGHM Polska Miedz are -

Analytics focus

– KGHM Polska Miedz 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 Metal Mining industry. The technology infrastructure of United Kingdom 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.

Training and development

– KGHM Polska Miedz 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.

Innovation driven organization

– KGHM Polska Miedz is one of the most innovative firm in Metal Mining sector.

Strong track record of project management in the Metal Mining industry

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

High switching costs

– The high switching costs that KGHM Polska Miedz 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.

Effective Research and Development (R&D)

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

Ability to recruit top talent

– KGHM Polska Miedz is one of the leading players in the Metal Mining industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.

Ability to lead change in Metal Mining

– KGHM Polska Miedz is one of the leading players in the Metal Mining industry in United Kingdom. Over the years it has not only transformed the business landscape in the Metal Mining industry in United Kingdom but also across the existing markets. The ability to lead change has enabled KGHM Polska Miedz in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

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

Digital Transformation in Metal Mining industry

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

Superior customer experience

– The customer experience strategy of KGHM Polska Miedz in Metal Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

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

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Weaknesses of KGHM Polska Miedz | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of KGHM Polska Miedz are -

High bargaining power of channel partners in Metal Mining industry

– because of the regulatory requirements in United Kingdom, KGHM Polska Miedz 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 Metal Mining industry.

Capital Spending Reduction

– Even during the low interest decade, KGHM Polska Miedz 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 Metal Mining industry using digital technology.

No frontier risks strategy

– From the 10K / annual statement of KGHM Polska Miedz, it seems that company is thinking out the frontier risks that can impact Metal Mining 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.

Workers concerns about automation

– As automation is fast increasing in the Metal Mining industry, KGHM Polska Miedz 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, KGHM Polska Miedz has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Metal Mining industry over the last five years. KGHM Polska Miedz 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.

Compensation and incentives

– The revenue per employee of KGHM Polska Miedz is just above the Metal Mining industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

High cash cycle compare to competitors

KGHM Polska Miedz has a high cash cycle compare to other players in the Metal 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.

Products dominated business model

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

High operating costs

– Compare to the competitors, KGHM Polska Miedz has high operating costs in the Metal Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract KGHM Polska Miedz lucrative customers.

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 KGHM Polska Miedz supply chain. Even after few cautionary changes, KGHM Polska Miedz is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left KGHM Polska Miedz vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, KGHM Polska Miedz 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.

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KGHM Polska Miedz Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of KGHM Polska Miedz are -

Creating value in data economy

– The success of analytics program of KGHM Polska Miedz has opened avenues for new revenue streams for the organization in Metal Mining industry. This can help KGHM Polska Miedz to build a more holistic ecosystem for KGHM Polska Miedz products in the Metal Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

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

Learning at scale

– Online learning technologies has now opened space for KGHM Polska Miedz 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.

Use of Bitcoin and other crypto currencies for transactions in Metal Mining industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for KGHM Polska Miedz in the Metal Mining industry. Now KGHM Polska Miedz can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– KGHM Polska Miedz can improve the customer journey of consumers in the Metal 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.

Leveraging digital technologies

– KGHM Polska Miedz 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.

Manufacturing automation

– KGHM Polska Miedz can use the latest technology developments to improve its manufacturing and designing process in Metal Mining 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, KGHM Polska Miedz is facing challenges because of the dominance of functional experts in the organization. KGHM Polska Miedz can utilize new technology in the field of Metal Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 KGHM Polska Miedz 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.

Reforming the budgeting process

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, KGHM Polska Miedz can use these opportunities to build new business models that can help the communities that KGHM Polska Miedz operates in. Secondly it can use opportunities from government spending in Metal Mining sector.

Developing new processes and practices

– KGHM Polska Miedz can develop new processes and procedures in Metal 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for KGHM Polska Miedz in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Metal Mining industry, and it will provide faster access to the consumers.

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Threats KGHM Polska Miedz External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of KGHM Polska Miedz are -

Shortening product life cycle

– it is one of the major threat that KGHM Polska Miedz is facing in Metal Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 KGHM Polska Miedz business can come under increasing regulations regarding data privacy, data security, etc.

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 KGHM Polska Miedz.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, KGHM Polska Miedz 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 KGHM Polska Miedz prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Metal Mining industry are lowering. It can presents KGHM Polska Miedz with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.

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 KGHM Polska Miedz in the Metal Mining sector and impact the bottomline of the organization.

Consumer confidence and its impact on KGHM Polska Miedz 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 Metal Mining industry and other sectors.

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.

Stagnating economy with rate increase

– KGHM Polska Miedz 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 Metal Mining industry.

Increasing wage structure of KGHM Polska Miedz

– 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 KGHM Polska Miedz.

Environmental challenges

– KGHM Polska Miedz 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. KGHM Polska Miedz can take advantage of this fund but it will also bring new competitors in the Metal Mining industry.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. KGHM Polska Miedz will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

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Weighted SWOT Analysis of KGHM Polska Miedz Template, Example

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

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