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 – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, geopolitical disruptions, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, wage bills are increasing, 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 -
Innovation driven organization
– AngloGold Ashanti is one of the most innovative firm in Gold & Silver sector.
High switching costs
– The high switching costs that AngloGold Ashanti 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.
Ability to lead change in Gold & Silver
– AngloGold Ashanti is one of the leading players in the Gold & Silver industry in South Africa. Over the years it has not only transformed the business landscape in the Gold & Silver industry in South Africa but also across the existing markets. The ability to lead change has enabled AngloGold Ashanti in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Training and development
– AngloGold Ashanti 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.
Learning organization
- AngloGold Ashanti 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 AngloGold Ashanti is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at AngloGold Ashanti emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of AngloGold Ashanti comprises – understanding the underlying the factors in the Gold & Silver industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Effective Research and Development (R&D)
– AngloGold Ashanti has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – AngloGold Ashanti 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.
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.
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.
Weaknesses of AngloGold Ashanti | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AngloGold Ashanti are -
Capital Spending Reduction
– Even during the low interest decade, AngloGold Ashanti 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 Gold & Silver industry using digital technology.
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.
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.
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.
High bargaining power of channel partners in Gold & Silver industry
– because of the regulatory requirements in South Africa, AngloGold Ashanti 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 Gold & Silver industry.
No frontier risks strategy
– From the 10K / annual statement of AngloGold Ashanti, 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.
Skills based hiring in Gold & Silver industry
– The stress on hiring functional specialists at AngloGold Ashanti 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.
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 operating costs
– Compare to the competitors, AngloGold Ashanti 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 AngloGold Ashanti lucrative customers.
Aligning sales with marketing
– From the outside it seems that AngloGold Ashanti needs to have more collaboration between its sales team and marketing team. Sales professionals in the Gold & Silver industry have deep experience in developing customer relationships. Marketing department at AngloGold Ashanti can leverage the sales team experience to cultivate customer relationships as AngloGold Ashanti is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Gold & Silver industry, AngloGold Ashanti needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
AngloGold Ashanti Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AngloGold Ashanti are -
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.
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.
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.
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. AngloGold Ashanti can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
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.
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.
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.
Leveraging digital technologies
– AngloGold Ashanti 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.
Manufacturing automation
– AngloGold Ashanti 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.
Threats AngloGold Ashanti External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AngloGold Ashanti are -
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.
Increasing wage structure of AngloGold Ashanti
– 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 AngloGold Ashanti.
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.
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.
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.
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.
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.
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.
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.
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.
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. AngloGold Ashanti 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.
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. AngloGold Ashanti 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
– 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.
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.