SWOT Analysis / TOWS Matrix for AngloGold Ashanti (South Africa)
Based on various researches at Oak Spring University , AngloGold Ashanti is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of AngloGold Ashanti
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AngloGold Ashanti can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AngloGold Ashanti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AngloGold Ashanti 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 AngloGold Ashanti can be done for the following purposes –
1. Strategic planning of AngloGold Ashanti
2. Improving business portfolio management of AngloGold Ashanti
3. Assessing feasibility of the new initiative in South Africa
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of AngloGold Ashanti
Strengths of AngloGold Ashanti | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of AngloGold Ashanti are -
Highly skilled collaborators
– AngloGold Ashanti 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 AngloGold Ashanti have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– AngloGold Ashanti is one of the leading players in the Gold & Silver industry in South Africa. It is in a position to attract the best talent available in South Africa. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– AngloGold Ashanti is present in almost all the verticals within the Gold & Silver industry. This has provided AngloGold Ashanti 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.
Low bargaining power of suppliers
– Suppliers of AngloGold Ashanti in the Basic Materials sector have low bargaining power. AngloGold Ashanti has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AngloGold Ashanti to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of AngloGold Ashanti in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Gold & Silver industry
– AngloGold Ashanti has clearly differentiated products in the market place. This has enabled AngloGold Ashanti to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped AngloGold Ashanti to invest into research and development (R&D) and innovation.
Analytics focus
– AngloGold Ashanti 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 Gold & Silver industry. The technology infrastructure of South Africa 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.
Cross disciplinary teams
– Horizontal connected teams at the AngloGold Ashanti 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.
Innovation driven organization
– AngloGold Ashanti is one of the most innovative firm in Gold & Silver sector.
Organizational Resilience of AngloGold Ashanti
– The covid-19 pandemic has put organizational resilience at the centre of everthing AngloGold Ashanti does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– AngloGold Ashanti has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. AngloGold Ashanti 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.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For AngloGold Ashanti digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. AngloGold Ashanti 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.
Weaknesses of AngloGold Ashanti | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AngloGold Ashanti are -
Ability to respond to the competition
– As the decision making is very deliberative at AngloGold Ashanti, in the dynamic environment of Gold & Silver industry it has struggled to respond to the nimble upstart competition. AngloGold Ashanti has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, AngloGold Ashanti has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Gold & Silver industry over the last five years. AngloGold Ashanti 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 cash cycle compare to competitors
AngloGold Ashanti has a high cash cycle compare to other players in the Gold & Silver industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– AngloGold Ashanti 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.
Employees’ less understanding of AngloGold Ashanti strategy
– From the outside it seems that the employees of AngloGold Ashanti 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.
Increasing silos among functional specialists
– The organizational structure of AngloGold Ashanti is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but AngloGold Ashanti needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help AngloGold Ashanti to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of AngloGold Ashanti is just above the Gold & Silver 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.
Slow to strategic competitive environment developments
– As AngloGold Ashanti 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.
High dependence on AngloGold Ashanti ‘s star products
– The top 2 products and services of AngloGold Ashanti 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 AngloGold Ashanti has relatively successful track record of launching new products.
Lack of clear differentiation of AngloGold Ashanti products
– To increase the profitability and margins on the products, AngloGold Ashanti needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, AngloGold Ashanti 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.
AngloGold Ashanti Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AngloGold Ashanti are -
Better consumer reach
– The expansion of the 5G network will help AngloGold Ashanti to increase its market reach. AngloGold Ashanti 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for AngloGold Ashanti 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 AngloGold Ashanti to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for AngloGold Ashanti in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Gold & Silver industry, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, AngloGold Ashanti 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 AngloGold Ashanti to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, AngloGold Ashanti can use these opportunities to build new business models that can help the communities that AngloGold Ashanti operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Using analytics as competitive advantage
– AngloGold Ashanti has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Gold & Silver sector. This continuous investment in analytics has enabled AngloGold Ashanti to build a competitive advantage using analytics. The analytics driven competitive advantage can help AngloGold Ashanti to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for AngloGold Ashanti 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.
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 AngloGold Ashanti in the Gold & Silver industry. Now AngloGold Ashanti can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– AngloGold Ashanti 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.
Building a culture of innovation
– managers at AngloGold Ashanti 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 Gold & Silver industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects AngloGold Ashanti can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, AngloGold Ashanti 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Gold & Silver industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. AngloGold Ashanti 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. AngloGold Ashanti 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.
Threats AngloGold Ashanti External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AngloGold Ashanti are -
Stagnating economy with rate increase
– AngloGold Ashanti 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.
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. AngloGold Ashanti needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
Regulatory challenges
– AngloGold Ashanti 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 Gold & Silver industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, AngloGold Ashanti 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 AngloGold Ashanti prominent markets.
High dependence on third party suppliers
– AngloGold Ashanti 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Gold & Silver industry are lowering. It can presents AngloGold Ashanti with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Gold & Silver sector.
Environmental challenges
– AngloGold Ashanti 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. AngloGold Ashanti can take advantage of this fund but it will also bring new competitors in the Gold & Silver 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 AngloGold Ashanti in the Gold & Silver sector and impact the bottomline of the organization.
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.
Shortening product life cycle
– it is one of the major threat that AngloGold Ashanti is facing in Gold & Silver sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 AngloGold Ashanti business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, AngloGold Ashanti 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.
Technology acceleration in Forth Industrial Revolution
– AngloGold Ashanti has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, AngloGold Ashanti needs to keep up with the evolution of technology in the Gold & Silver 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 AngloGold Ashanti Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AngloGold Ashanti 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 AngloGold Ashanti 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 AngloGold Ashanti 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 AngloGold Ashanti 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 AngloGold Ashanti needs to make to build a sustainable competitive advantage.