SWOT Analysis / TOWS Matrix for Randgold Exploration (South Africa)
Based on various researches at Oak Spring University , Randgold Exploration is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of Randgold Exploration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Randgold Exploration can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Randgold Exploration, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Randgold Exploration 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 Randgold Exploration can be done for the following purposes –
1. Strategic planning of Randgold Exploration
2. Improving business portfolio management of Randgold Exploration
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 Randgold Exploration
Strengths of Randgold Exploration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Randgold Exploration are -
Low bargaining power of suppliers
– Suppliers of Randgold Exploration in the Basic Materials sector have low bargaining power. Randgold Exploration has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Randgold Exploration to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Randgold Exploration is one of the most innovative firm in Gold & Silver sector.
Sustainable margins compare to other players in Gold & Silver industry
– Randgold Exploration has clearly differentiated products in the market place. This has enabled Randgold Exploration to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Randgold Exploration to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Randgold Exploration 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.
Superior customer experience
– The customer experience strategy of Randgold Exploration in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Randgold Exploration 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.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For Randgold Exploration digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Randgold Exploration 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
– Randgold Exploration is present in almost all the verticals within the Gold & Silver industry. This has provided Randgold Exploration 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.
High switching costs
– The high switching costs that Randgold Exploration 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.
Highly skilled collaborators
– Randgold Exploration 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 Randgold Exploration have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Gold & Silver industry
– Randgold Exploration is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Randgold Exploration 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 Randgold Exploration is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Randgold Exploration emphasize – knowledge, initiative, and innovation.
Weaknesses of Randgold Exploration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Randgold Exploration are -
Capital Spending Reduction
– Even during the low interest decade, Randgold Exploration 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 Randgold Exploration ‘s star products
– The top 2 products and services of Randgold Exploration 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 Randgold Exploration has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Randgold Exploration, in the dynamic environment of Gold & Silver industry it has struggled to respond to the nimble upstart competition. Randgold Exploration has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Gold & Silver industry
– The stress on hiring functional specialists at Randgold Exploration 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.
Lack of clear differentiation of Randgold Exploration products
– To increase the profitability and margins on the products, Randgold Exploration needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Randgold Exploration 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.
No frontier risks strategy
– From the 10K / annual statement of Randgold Exploration, 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.
High bargaining power of channel partners in Gold & Silver industry
– because of the regulatory requirements in South Africa, Randgold Exploration 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.
Interest costs
– Compare to the competition, Randgold Exploration 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.
Employees’ less understanding of Randgold Exploration strategy
– From the outside it seems that the employees of Randgold Exploration 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.
High operating costs
– Compare to the competitors, Randgold Exploration 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 Randgold Exploration lucrative customers.
Randgold Exploration Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Randgold Exploration 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, Randgold Exploration can use these opportunities to build new business models that can help the communities that Randgold Exploration operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Building a culture of innovation
– managers at Randgold Exploration 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Gold & Silver industry, but it has also influenced the consumer preferences. Randgold Exploration can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Randgold Exploration is facing challenges because of the dominance of functional experts in the organization. Randgold Exploration can utilize new technology in the field of Gold & Silver industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Randgold Exploration can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Randgold Exploration 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 Randgold Exploration to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Randgold Exploration 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 Randgold Exploration to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Randgold Exploration 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.
Developing new processes and practices
– Randgold Exploration 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 Randgold Exploration has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Randgold Exploration to build a more holistic ecosystem for Randgold Exploration products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Randgold Exploration 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. Randgold Exploration 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.
Buying journey improvements
– Randgold Exploration can improve the customer journey of consumers in the Gold & Silver 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.
Learning at scale
– Online learning technologies has now opened space for Randgold Exploration 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.
Threats Randgold Exploration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Randgold Exploration are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Randgold Exploration 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.
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. Randgold Exploration 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.
High dependence on third party suppliers
– Randgold Exploration 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.
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.
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 Randgold Exploration in the Gold & Silver sector and impact the bottomline of the organization.
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 Randgold Exploration.
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.
Consumer confidence and its impact on Randgold Exploration 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.
Shortening product life cycle
– it is one of the major threat that Randgold Exploration 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, Randgold Exploration 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 Randgold Exploration prominent markets.
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. Randgold Exploration needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Randgold Exploration 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.
Regulatory challenges
– Randgold Exploration 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.
Weighted SWOT Analysis of Randgold Exploration Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Randgold Exploration 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 Randgold Exploration 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 Randgold Exploration 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 Randgold Exploration 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 Randgold Exploration needs to make to build a sustainable competitive advantage.