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GERDAU MET ON (GOAU3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for GERDAU MET ON (Brazil)


Based on various researches at Oak Spring University , GERDAU MET ON is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing transportation and logistics costs, cloud computing is disrupting traditional business models, wage bills are increasing, there is increasing trade war between United States & China, etc



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Introduction to SWOT Analysis of GERDAU MET ON


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that GERDAU MET ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the GERDAU MET ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which GERDAU MET ON 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 GERDAU MET ON can be done for the following purposes –
1. Strategic planning of GERDAU MET ON
2. Improving business portfolio management of GERDAU MET ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of GERDAU MET ON




Strengths of GERDAU MET ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of GERDAU MET ON are -

Innovation driven organization

– GERDAU MET ON is one of the most innovative firm in Iron & Steel sector.

Cross disciplinary teams

– Horizontal connected teams at the GERDAU MET ON 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.

Digital Transformation in Iron & Steel industry

- digital transformation varies from industry to industry. For GERDAU MET ON digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. GERDAU MET ON 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.

Successful track record of launching new products

– GERDAU MET ON has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. GERDAU MET ON 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.

Diverse revenue streams

– GERDAU MET ON is present in almost all the verticals within the Iron & Steel industry. This has provided GERDAU MET ON 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.

Superior customer experience

– The customer experience strategy of GERDAU MET ON in Iron & Steel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Iron & Steel

– GERDAU MET ON is one of the leading players in the Iron & Steel industry in Brazil. Over the years it has not only transformed the business landscape in the Iron & Steel industry in Brazil but also across the existing markets. The ability to lead change has enabled GERDAU MET ON in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– GERDAU MET ON is one of the leading players in the Iron & Steel industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.

Highly skilled collaborators

– GERDAU MET ON has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of GERDAU MET ON have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of GERDAU MET ON

– The covid-19 pandemic has put organizational resilience at the centre of everthing GERDAU MET ON does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High brand equity

– GERDAU MET ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled GERDAU MET ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Effective Research and Development (R&D)

– GERDAU MET ON has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – GERDAU MET ON staying ahead in the Iron & Steel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.






Weaknesses of GERDAU MET ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of GERDAU MET ON are -

Low market penetration in new markets

– Outside its home market of Brazil, GERDAU MET ON needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– GERDAU MET ON 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.

Increasing silos among functional specialists

– The organizational structure of GERDAU MET ON is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but GERDAU MET ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help GERDAU MET ON to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.

Products dominated business model

– Even though GERDAU MET ON has some of the most successful models in the Iron & Steel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. GERDAU MET ON should strive to include more intangible value offerings along with its core products and services.

Slow to strategic competitive environment developments

– As GERDAU MET ON is one of the leading players in the Iron & Steel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Iron & Steel industry in last five years.

Employees’ less understanding of GERDAU MET ON strategy

– From the outside it seems that the employees of GERDAU MET ON 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, GERDAU MET ON 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 Iron & Steel industry using digital technology.

Compensation and incentives

– The revenue per employee of GERDAU MET ON is just above the Iron & Steel 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.

High bargaining power of channel partners in Iron & Steel industry

– because of the regulatory requirements in Brazil, GERDAU MET ON 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 Iron & Steel industry.

Slow decision making process

– As mentioned earlier in the report, GERDAU MET ON has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. GERDAU MET ON 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.

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 GERDAU MET ON supply chain. Even after few cautionary changes, GERDAU MET ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left GERDAU MET ON vulnerable to further global disruptions in South East Asia.




GERDAU MET ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of GERDAU MET ON are -

Using analytics as competitive advantage

– GERDAU MET ON has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled GERDAU MET ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help GERDAU MET ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– GERDAU MET ON can use the latest technology developments to improve its manufacturing and designing process in Iron & Steel 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. GERDAU MET ON can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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. GERDAU MET ON can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– GERDAU MET ON can develop new processes and procedures in Iron & Steel 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 GERDAU MET ON 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 GERDAU MET ON 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, GERDAU MET ON can use these opportunities to build new business models that can help the communities that GERDAU MET ON operates in. Secondly it can use opportunities from government spending in Iron & Steel sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for GERDAU MET ON in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of GERDAU MET ON has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help GERDAU MET ON to build a more holistic ecosystem for GERDAU MET ON products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– GERDAU MET ON 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.

Loyalty marketing

– GERDAU MET ON 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects GERDAU MET ON can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Better consumer reach

– The expansion of the 5G network will help GERDAU MET ON to increase its market reach. GERDAU MET ON 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 GERDAU MET ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of GERDAU MET ON are -

Shortening product life cycle

– it is one of the major threat that GERDAU MET ON is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– GERDAU MET ON 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. GERDAU MET ON can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for GERDAU MET ON in Iron & Steel industry. The Iron & Steel 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.

Increasing wage structure of GERDAU MET ON

– 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 GERDAU MET ON.

High dependence on third party suppliers

– GERDAU MET ON 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.

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 GERDAU MET ON business can come under increasing regulations regarding data privacy, data security, etc.

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 GERDAU MET ON.

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. GERDAU MET ON needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, GERDAU MET ON 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 GERDAU MET ON prominent markets.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, GERDAU MET ON may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Iron & Steel sector.

Consumer confidence and its impact on GERDAU MET ON 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 Iron & Steel industry and other sectors.

Stagnating economy with rate increase

– GERDAU MET ON 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 Iron & Steel industry.

Technology acceleration in Forth Industrial Revolution

– GERDAU MET ON has witnessed rapid integration of technology during Covid-19 in the Iron & Steel industry. As one of the leading players in the industry, GERDAU MET ON needs to keep up with the evolution of technology in the Iron & Steel 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 GERDAU MET ON Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at GERDAU MET ON 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 GERDAU MET ON 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 GERDAU MET ON 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 GERDAU MET ON 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 GERDAU MET ON needs to make to build a sustainable competitive advantage.



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