Based on various researches at Oak Spring University , Lucara Diamond Corp is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, there is backlash against globalization,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of Lucara Diamond Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lucara Diamond Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lucara Diamond Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lucara Diamond Corp 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 Lucara Diamond Corp can be done for the following purposes –
1. Strategic planning of Lucara Diamond Corp
2. Improving business portfolio management of Lucara Diamond Corp
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Non-Metallic Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lucara Diamond Corp
Strengths of Lucara Diamond Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lucara Diamond Corp are -
Low bargaining power of suppliers
– Suppliers of Lucara Diamond Corp in the Basic Materials sector have low bargaining power. Lucara Diamond Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lucara Diamond Corp to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Non-Metallic Mining industry
– Lucara Diamond Corp 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 brand equity
– Lucara Diamond Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lucara Diamond Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Non-Metallic Mining
– Lucara Diamond Corp is one of the leading players in the Non-Metallic Mining industry in United Kingdom. Over the years it has not only transformed the business landscape in the Non-Metallic Mining industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Lucara Diamond Corp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Lucara Diamond Corp is one of the most innovative firm in Non-Metallic Mining sector.
Superior customer experience
– The customer experience strategy of Lucara Diamond Corp in Non-Metallic Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Lucara Diamond Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Non-Metallic Mining industry. Secondly the value chain collaborators of Lucara Diamond Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Lucara Diamond Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lucara Diamond Corp staying ahead in the Non-Metallic Mining industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Lucara Diamond Corp 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.
Cross disciplinary teams
– Horizontal connected teams at the Lucara Diamond Corp are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Lucara Diamond Corp 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 Lucara Diamond Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lucara Diamond Corp emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Lucara Diamond Corp 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.
Weaknesses of Lucara Diamond Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lucara Diamond Corp are -
Capital Spending Reduction
– Even during the low interest decade, Lucara Diamond Corp has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Non-Metallic Mining industry using digital technology.
Compensation and incentives
– The revenue per employee of Lucara Diamond Corp is just above the Non-Metallic 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.
Aligning sales with marketing
– From the outside it seems that Lucara Diamond Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Non-Metallic Mining industry have deep experience in developing customer relationships. Marketing department at Lucara Diamond Corp can leverage the sales team experience to cultivate customer relationships as Lucara Diamond Corp is planning to shift buying processes online.
High cash cycle compare to competitors
Lucara Diamond Corp has a high cash cycle compare to other players in the Non-Metallic Mining industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, Lucara Diamond Corp has high operating costs in the Non-Metallic Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lucara Diamond Corp lucrative customers.
Employees’ less understanding of Lucara Diamond Corp strategy
– From the outside it seems that the employees of Lucara Diamond Corp 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.
No frontier risks strategy
– From the 10K / annual statement of Lucara Diamond Corp, it seems that company is thinking out the frontier risks that can impact Non-Metallic 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lucara Diamond Corp is slow explore the new channels of communication. These new channels of communication can help Lucara Diamond Corp to provide better information regarding Non-Metallic Mining products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Lucara Diamond Corp 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 to strategic competitive environment developments
– As Lucara Diamond Corp is one of the leading players in the Non-Metallic Mining industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Non-Metallic Mining industry in last five years.
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 Lucara Diamond Corp supply chain. Even after few cautionary changes, Lucara Diamond Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lucara Diamond Corp vulnerable to further global disruptions in South East Asia.
Lucara Diamond Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lucara Diamond Corp are -
Learning at scale
– Online learning technologies has now opened space for Lucara Diamond Corp 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lucara Diamond Corp 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 Lucara Diamond Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Lucara Diamond Corp 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.
Using analytics as competitive advantage
– Lucara Diamond Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Non-Metallic Mining sector. This continuous investment in analytics has enabled Lucara Diamond Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lucara Diamond Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Lucara Diamond Corp can use the latest technology developments to improve its manufacturing and designing process in Non-Metallic 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lucara Diamond Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Non-Metallic Mining industry, and it will provide faster access to the consumers.
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 Lucara Diamond Corp 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.
Developing new processes and practices
– Lucara Diamond Corp can develop new processes and procedures in Non-Metallic Mining industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lucara Diamond Corp 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 Lucara Diamond Corp to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Lucara Diamond Corp 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.
Buying journey improvements
– Lucara Diamond Corp can improve the customer journey of consumers in the Non-Metallic Mining industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Lucara Diamond Corp can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Non-Metallic Mining industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lucara Diamond Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Lucara Diamond Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lucara Diamond Corp are -
Shortening product life cycle
– it is one of the major threat that Lucara Diamond Corp is facing in Non-Metallic Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Lucara Diamond Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Non-Metallic Mining sector.
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. Lucara Diamond Corp needs to understand the core reasons impacting the Non-Metallic Mining industry. This will help it in building a better workplace.
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 wage structure of Lucara Diamond Corp
– 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 Lucara Diamond Corp.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lucara Diamond Corp in Non-Metallic Mining industry. The Non-Metallic Mining industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Lucara Diamond Corp 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.
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 Lucara Diamond Corp in the Non-Metallic Mining sector and impact the bottomline of the organization.
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 Lucara Diamond Corp business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Lucara Diamond Corp demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Non-Metallic Mining industry and other sectors.
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 Lucara Diamond Corp.
Environmental challenges
– Lucara Diamond Corp 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. Lucara Diamond Corp can take advantage of this fund but it will also bring new competitors in the Non-Metallic Mining industry.
Easy access to finance
– Easy access to finance in Non-Metallic Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lucara Diamond Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Lucara Diamond Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp needs to make to build a sustainable competitive advantage.