SWOT Analysis / TOWS Matrix for Sandfire Resources (Australia)
Based on various researches at Oak Spring University , Sandfire Resources is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is backlash against globalization, increasing commodity prices, etc
Introduction to SWOT Analysis of Sandfire Resources
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sandfire Resources can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sandfire Resources, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sandfire Resources 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 Sandfire Resources can be done for the following purposes –
1. Strategic planning of Sandfire Resources
2. Improving business portfolio management of Sandfire Resources
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 Sandfire Resources
Strengths of Sandfire Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sandfire Resources are -
High switching costs
– The high switching costs that Sandfire Resources 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.
Innovation driven organization
– Sandfire Resources is one of the most innovative firm in Gold & Silver sector.
Successful track record of launching new products
– Sandfire Resources has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sandfire Resources 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.
Superior customer experience
– The customer experience strategy of Sandfire Resources in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Sandfire Resources in the Basic Materials sector have low bargaining power. Sandfire Resources has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sandfire Resources to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Sandfire Resources is present in almost all the verticals within the Gold & Silver industry. This has provided Sandfire Resources 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.
Cross disciplinary teams
– Horizontal connected teams at the Sandfire Resources 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.
Strong track record of project management in the Gold & Silver industry
– Sandfire Resources is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Gold & Silver industry
– Sandfire Resources has clearly differentiated products in the market place. This has enabled Sandfire Resources to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Sandfire Resources to invest into research and development (R&D) and innovation.
Organizational Resilience of Sandfire Resources
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sandfire Resources does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Sandfire Resources has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sandfire Resources staying ahead in the Gold & Silver industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Sandfire Resources has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Gold & Silver industry. Secondly the value chain collaborators of Sandfire Resources have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Sandfire Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sandfire Resources are -
Low market penetration in new markets
– Outside its home market of Australia, Sandfire Resources needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Sandfire Resources is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but Sandfire Resources needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sandfire Resources to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sandfire Resources is slow explore the new channels of communication. These new channels of communication can help Sandfire Resources to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Sandfire Resources has high operating costs in the Gold & Silver industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sandfire Resources lucrative customers.
High dependence on Sandfire Resources ‘s star products
– The top 2 products and services of Sandfire Resources still accounts for major business revenue. This dependence on star products in Gold & Silver industry has resulted into insufficient focus on developing new products, even though Sandfire Resources has relatively successful track record of launching new products.
Lack of clear differentiation of Sandfire Resources products
– To increase the profitability and margins on the products, Sandfire Resources needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Sandfire Resources strategy
– From the outside it seems that the employees of Sandfire Resources 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.
Skills based hiring in Gold & Silver industry
– The stress on hiring functional specialists at Sandfire Resources has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Sandfire Resources, 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.
Slow to strategic competitive environment developments
– As Sandfire Resources is one of the leading players in the Gold & Silver industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Gold & Silver industry in last five years.
Interest costs
– Compare to the competition, Sandfire Resources 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.
Sandfire Resources Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sandfire Resources are -
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 Sandfire Resources 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.
Loyalty marketing
– Sandfire Resources 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.
Developing new processes and practices
– Sandfire Resources 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.
Creating value in data economy
– The success of analytics program of Sandfire Resources has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Sandfire Resources to build a more holistic ecosystem for Sandfire Resources products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Sandfire Resources 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sandfire Resources 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 Sandfire Resources to hire the very best people irrespective of their geographical location.
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. Sandfire Resources can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Sandfire Resources 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.
Use of Bitcoin and other crypto currencies for transactions in Gold & Silver industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sandfire Resources in the Gold & Silver industry. Now Sandfire Resources can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sandfire Resources can use these opportunities to build new business models that can help the communities that Sandfire Resources operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sandfire Resources can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Sandfire Resources 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.
Better consumer reach
– The expansion of the 5G network will help Sandfire Resources to increase its market reach. Sandfire Resources 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.
Threats Sandfire Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sandfire Resources 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. Sandfire Resources needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
Consumer confidence and its impact on Sandfire Resources 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 Gold & Silver industry and other sectors.
Stagnating economy with rate increase
– Sandfire Resources 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.
Easy access to finance
– Easy access to finance in Gold & Silver industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sandfire Resources can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Sandfire Resources 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. Sandfire Resources can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sandfire Resources 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 Sandfire Resources prominent markets.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sandfire Resources 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Gold & Silver industry are lowering. It can presents Sandfire Resources with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Gold & Silver sector.
Increasing wage structure of Sandfire Resources
– 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 Sandfire Resources.
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 Sandfire Resources business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sandfire Resources 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.
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. Sandfire Resources 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.
Weighted SWOT Analysis of Sandfire Resources Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources needs to make to build a sustainable competitive advantage.