Based on various researches at Oak Spring University , Lucara Diamond Corp is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing commodity prices, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, 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 -
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.
Digital Transformation in Non-Metallic Mining industry
- digital transformation varies from industry to industry. For Lucara Diamond Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lucara Diamond Corp 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.
Diverse revenue streams
– Lucara Diamond Corp is present in almost all the verticals within the Non-Metallic Mining industry. This has provided Lucara Diamond Corp 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.
Innovation driven organization
– Lucara Diamond Corp is one of the most innovative firm in Non-Metallic Mining sector.
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.
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.
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.
Analytics focus
– Lucara Diamond Corp 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 Non-Metallic 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.
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.
Successful track record of launching new products
– Lucara Diamond Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lucara Diamond Corp has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Lucara Diamond Corp is one of the leading players in the Non-Metallic 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.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of Lucara Diamond Corp is dominated by functional specialists. It is not different from other players in the Non-Metallic Mining industry, but Lucara Diamond Corp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lucara Diamond Corp to focus more on services in the Non-Metallic Mining industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Lucara Diamond Corp, in the dynamic environment of Non-Metallic Mining industry it has struggled to respond to the nimble upstart competition. Lucara Diamond Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Lucara Diamond Corp products
– To increase the profitability and margins on the products, Lucara Diamond Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Non-Metallic Mining industry
– because of the regulatory requirements in United Kingdom, Lucara Diamond Corp 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 Non-Metallic Mining industry.
Products dominated business model
– Even though Lucara Diamond Corp has some of the most successful models in the Non-Metallic Mining industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lucara Diamond Corp should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Lucara Diamond Corp has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Non-Metallic Mining industry over the last five years. Lucara Diamond Corp 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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lucara Diamond Corp can use these opportunities to build new business models that can help the communities that Lucara Diamond Corp operates in. Secondly it can use opportunities from government spending in Non-Metallic Mining sector.
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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Non-Metallic Mining industry, but it has also influenced the consumer preferences. Lucara Diamond Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lucara Diamond Corp 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.
Use of Bitcoin and other crypto currencies for transactions in Non-Metallic Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lucara Diamond Corp in the Non-Metallic Mining industry. Now Lucara Diamond Corp can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lucara Diamond Corp 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 Lucara Diamond Corp prominent markets.
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.
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.
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.
Stagnating economy with rate increase
– Lucara Diamond Corp 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 Non-Metallic Mining industry.
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.
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.
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.
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.
Regulatory challenges
– Lucara Diamond Corp 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 Non-Metallic Mining industry regulations.
Technology acceleration in Forth Industrial Revolution
– Lucara Diamond Corp has witnessed rapid integration of technology during Covid-19 in the Non-Metallic Mining industry. As one of the leading players in the industry, Lucara Diamond Corp needs to keep up with the evolution of technology in the Non-Metallic 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.
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.
