SWOT Analysis / TOWS Matrix for Aruma Resources Ltd (Australia)
Based on various researches at Oak Spring University , Aruma Resources Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing household debt because of falling income levels,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Aruma Resources Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Aruma Resources Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aruma Resources Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aruma Resources 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 Aruma Resources Ltd can be done for the following purposes –
1. Strategic planning of Aruma Resources Ltd
2. Improving business portfolio management of Aruma Resources Ltd
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 Aruma Resources Ltd
Strengths of Aruma Resources Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aruma Resources Ltd are -
Ability to lead change in Gold & Silver
– Aruma Resources Ltd is one of the leading players in the Gold & Silver industry in Australia. Over the years it has not only transformed the business landscape in the Gold & Silver industry in Australia but also across the existing markets. The ability to lead change has enabled Aruma Resources Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For Aruma Resources Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aruma Resources Ltd 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.
Low bargaining power of suppliers
– Suppliers of Aruma Resources Ltd in the Basic Materials sector have low bargaining power. Aruma Resources Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aruma Resources Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Aruma Resources Ltd 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.
Sustainable margins compare to other players in Gold & Silver industry
– Aruma Resources Ltd has clearly differentiated products in the market place. This has enabled Aruma Resources Ltd to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Aruma Resources Ltd to invest into research and development (R&D) and innovation.
Learning organization
- Aruma Resources Ltd 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 Aruma Resources Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Aruma Resources Ltd emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Aruma Resources 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.
Training and development
– Aruma Resources 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.
Diverse revenue streams
– Aruma Resources Ltd is present in almost all the verticals within the Gold & Silver industry. This has provided Aruma Resources 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.
High brand equity
– Aruma Resources Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aruma Resources Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Aruma Resources Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Aruma Resources Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Gold & Silver industry
– Aruma Resources Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Aruma Resources Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aruma Resources Ltd are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aruma Resources Ltd is slow explore the new channels of communication. These new channels of communication can help Aruma Resources Ltd to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Australia, Aruma Resources Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Aruma Resources Ltd, 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.
Employees’ less understanding of Aruma Resources Ltd strategy
– From the outside it seems that the employees of Aruma Resources Ltd 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.
Capital Spending Reduction
– Even during the low interest decade, Aruma Resources 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 Gold & Silver industry using digital technology.
Need for greater diversity
– Aruma Resources Ltd 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.
High bargaining power of channel partners in Gold & Silver industry
– because of the regulatory requirements in Australia, Aruma Resources Ltd 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.
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 Aruma Resources Ltd supply chain. Even after few cautionary changes, Aruma Resources Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aruma Resources Ltd vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Aruma Resources Ltd products
– To increase the profitability and margins on the products, Aruma Resources Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Aruma Resources Ltd is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but Aruma Resources Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aruma Resources Ltd to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Aruma Resources Ltd is just above the Gold & Silver 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.
Aruma Resources Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Aruma Resources Ltd are -
Using analytics as competitive advantage
– Aruma Resources Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Gold & Silver sector. This continuous investment in analytics has enabled Aruma Resources Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aruma Resources Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Aruma Resources Ltd 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.
Creating value in data economy
– The success of analytics program of Aruma Resources Ltd has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Aruma Resources Ltd to build a more holistic ecosystem for Aruma Resources Ltd products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aruma Resources 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 Aruma Resources 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aruma Resources Ltd can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Aruma Resources Ltd 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.
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. Aruma Resources Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Aruma Resources 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aruma Resources 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 Aruma Resources Ltd to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aruma Resources Ltd can use these opportunities to build new business models that can help the communities that Aruma Resources Ltd operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Buying journey improvements
– Aruma Resources Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Aruma Resources Ltd to increase its market reach. Aruma Resources Ltd 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
– Aruma Resources Ltd 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.
Threats Aruma Resources Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Aruma Resources Ltd are -
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 Aruma Resources Ltd.
Environmental challenges
– Aruma Resources 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. Aruma Resources Ltd can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
Stagnating economy with rate increase
– Aruma Resources 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 Gold & Silver industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Aruma Resources 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 Gold & Silver sector.
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. Aruma Resources Ltd 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.
Technology acceleration in Forth Industrial Revolution
– Aruma Resources Ltd has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, Aruma Resources Ltd 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.
Shortening product life cycle
– it is one of the major threat that Aruma Resources Ltd is facing in Gold & Silver sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Aruma Resources Ltd
– 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 Aruma Resources Ltd.
Regulatory challenges
– Aruma Resources Ltd 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.
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 Aruma Resources Ltd in the Gold & Silver sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aruma Resources Ltd in Gold & Silver industry. The Gold & Silver 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.
High dependence on third party suppliers
– Aruma Resources 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.
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.
Weighted SWOT Analysis of Aruma Resources Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Aruma Resources 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 Aruma Resources 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 Aruma Resources 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 Aruma Resources 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 Aruma Resources Ltd needs to make to build a sustainable competitive advantage.
