SWOT Analysis / TOWS Matrix for BMG Resources Ltd (Australia)
Based on various researches at Oak Spring University , BMG Resources Ltd is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic ,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of BMG Resources Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BMG Resources Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BMG Resources Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BMG 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 BMG Resources Ltd can be done for the following purposes –
1. Strategic planning of BMG Resources Ltd
2. Improving business portfolio management of BMG Resources Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BMG Resources Ltd
Strengths of BMG Resources Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BMG Resources Ltd are -
Innovation driven organization
– BMG Resources Ltd is one of the most innovative firm in Metal Mining sector.
Strong track record of project management in the Metal Mining industry
– BMG 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.
Training and development
– BMG 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.
Effective Research and Development (R&D)
– BMG Resources Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BMG Resources Ltd 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.
Digital Transformation in Metal Mining industry
- digital transformation varies from industry to industry. For BMG Resources Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BMG 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 BMG Resources Ltd in the Basic Materials sector have low bargaining power. BMG Resources Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps BMG Resources Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– BMG Resources Ltd is present in almost all the verticals within the Metal Mining industry. This has provided BMG 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.
Operational resilience
– The operational resilience strategy of BMG Resources Ltd comprises – understanding the underlying the factors in the Metal 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 switching costs
– The high switching costs that BMG 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.
Learning organization
- BMG 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 BMG Resources Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at BMG Resources Ltd emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– BMG Resources Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Metal Mining industry. Secondly the value chain collaborators of BMG Resources Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Metal Mining
– BMG Resources Ltd is one of the leading players in the Metal Mining industry in Australia. Over the years it has not only transformed the business landscape in the Metal Mining industry in Australia but also across the existing markets. The ability to lead change has enabled BMG Resources Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of BMG Resources Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BMG Resources Ltd are -
Increasing silos among functional specialists
– The organizational structure of BMG Resources Ltd is dominated by functional specialists. It is not different from other players in the Metal Mining industry, but BMG Resources Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help BMG Resources Ltd to focus more on services in the Metal Mining industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, BMG 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 Metal Mining industry using digital technology.
High bargaining power of channel partners in Metal Mining industry
– because of the regulatory requirements in Australia, BMG 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 Metal Mining industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, BMG Resources Ltd is slow explore the new channels of communication. These new channels of communication can help BMG Resources Ltd to provide better information regarding Metal Mining products and services. It can also build an online community to further reach out to potential 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 BMG Resources Ltd supply chain. Even after few cautionary changes, BMG Resources Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left BMG Resources Ltd vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
BMG Resources Ltd 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.
Slow decision making process
– As mentioned earlier in the report, BMG Resources 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 Metal Mining industry over the last five years. BMG Resources 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.
Need for greater diversity
– BMG 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 dependence on BMG Resources Ltd ‘s star products
– The top 2 products and services of BMG Resources Ltd still accounts for major business revenue. This dependence on star products in Metal Mining industry has resulted into insufficient focus on developing new products, even though BMG Resources Ltd has relatively successful track record of launching new products.
Products dominated business model
– Even though BMG Resources Ltd 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. BMG Resources Ltd should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, BMG Resources Ltd 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.
BMG Resources Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BMG Resources Ltd are -
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. BMG Resources Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Metal Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. BMG Resources Ltd 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. BMG Resources Ltd 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.
Loyalty marketing
– BMG Resources 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.
Building a culture of innovation
– managers at BMG Resources 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 Metal Mining industry.
Leveraging digital technologies
– BMG 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.
Creating value in data economy
– The success of analytics program of BMG Resources Ltd has opened avenues for new revenue streams for the organization in Metal Mining industry. This can help BMG Resources Ltd to build a more holistic ecosystem for BMG Resources Ltd products in the Metal Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– BMG Resources Ltd 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for BMG 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 BMG Resources Ltd to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help BMG Resources Ltd to increase its market reach. BMG 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Metal Mining industry, but it has also influenced the consumer preferences. BMG Resources Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 BMG 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.
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 BMG Resources Ltd in the Metal Mining industry. Now BMG Resources Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, BMG Resources Ltd is facing challenges because of the dominance of functional experts in the organization. BMG Resources Ltd 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.
Threats BMG Resources Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BMG Resources Ltd are -
High dependence on third party suppliers
– BMG 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.
Environmental challenges
– BMG 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. BMG Resources Ltd can take advantage of this fund but it will also bring new competitors in the Metal Mining industry.
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 BMG Resources Ltd in the Metal Mining sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that BMG Resources Ltd is facing in Metal Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. BMG 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.
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.
Stagnating economy with rate increase
– BMG 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 Metal Mining industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, BMG Resources 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 BMG Resources Ltd prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Metal Mining industry are lowering. It can presents BMG Resources Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.
Technology acceleration in Forth Industrial Revolution
– BMG Resources Ltd has witnessed rapid integration of technology during Covid-19 in the Metal Mining industry. As one of the leading players in the industry, BMG Resources Ltd needs to keep up with the evolution of technology in the Metal 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for BMG Resources Ltd in Metal Mining industry. The Metal 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.
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 BMG Resources Ltd.
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 BMG Resources Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of BMG Resources Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BMG 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 BMG 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 BMG 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 BMG 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 BMG Resources Ltd needs to make to build a sustainable competitive advantage.
