PARANAPANEMA ON (PMAM3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for PARANAPANEMA ON (Brazil)

Based on various researches at Oak Spring University , PARANAPANEMA ON is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of PARANAPANEMA ON

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PARANAPANEMA ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PARANAPANEMA ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PARANAPANEMA 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of PARANAPANEMA ON can be done for the following purposes –
1. Strategic planning of PARANAPANEMA ON
2. Improving business portfolio management of PARANAPANEMA ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PARANAPANEMA ON

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

The strengths of PARANAPANEMA ON are -

Learning organization

- PARANAPANEMA ON 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 PARANAPANEMA ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PARANAPANEMA ON emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– PARANAPANEMA ON is present in almost all the verticals within the Metal Mining industry. This has provided PARANAPANEMA 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.

Operational resilience

– The operational resilience strategy of PARANAPANEMA ON comprises – understanding the underlying the factors in the Metal Mining 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.

Innovation driven organization

– PARANAPANEMA ON is one of the most innovative firm in Metal Mining sector.

Training and development

– PARANAPANEMA ON 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.

Digital Transformation in Metal Mining industry

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

High switching costs

– The high switching costs that PARANAPANEMA ON 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.

Organizational Resilience of PARANAPANEMA ON

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

Sustainable margins compare to other players in Metal Mining industry

– PARANAPANEMA ON has clearly differentiated products in the market place. This has enabled PARANAPANEMA ON to fetch slight price premium compare to the competitors in the Metal Mining industry. The sustainable margins have also helped PARANAPANEMA ON to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of PARANAPANEMA ON in Metal Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Metal Mining

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

Effective Research and Development (R&D)

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

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

The weaknesses of PARANAPANEMA ON are -

Increasing silos among functional specialists

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

Workers concerns about automation

– As automation is fast increasing in the Metal Mining industry, PARANAPANEMA ON 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.

Interest costs

– Compare to the competition, PARANAPANEMA ON 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.

Lack of clear differentiation of PARANAPANEMA ON products

– To increase the profitability and margins on the products, PARANAPANEMA ON needs to provide more differentiated products than what it is currently offering in the marketplace.

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

Slow to strategic competitive environment developments

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

Products dominated business model

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

Need for greater diversity

– PARANAPANEMA 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.

Slow decision making process

– As mentioned earlier in the report, PARANAPANEMA 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 Metal Mining industry over the last five years. PARANAPANEMA 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.

Compensation and incentives

– The revenue per employee of PARANAPANEMA ON is just above the Metal Mining 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 operating costs

– Compare to the competitors, PARANAPANEMA ON has high operating costs in the Metal Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract PARANAPANEMA ON lucrative customers.

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

The opportunities of PARANAPANEMA ON 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, PARANAPANEMA ON can use these opportunities to build new business models that can help the communities that PARANAPANEMA ON operates in. Secondly it can use opportunities from government spending in Metal Mining sector.

Using analytics as competitive advantage

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

Loyalty marketing

– PARANAPANEMA 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.

Better consumer reach

– The expansion of the 5G network will help PARANAPANEMA ON to increase its market reach. PARANAPANEMA 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.

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 PARANAPANEMA ON 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.

Finding new ways to collaborate

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

Developing new processes and practices

– PARANAPANEMA ON can develop new processes and procedures in Metal Mining 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, PARANAPANEMA ON is facing challenges because of the dominance of functional experts in the organization. PARANAPANEMA ON can utilize new technology in the field of Metal Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– PARANAPANEMA ON can improve the customer journey of consumers in the Metal Mining 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Metal Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PARANAPANEMA ON 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. PARANAPANEMA ON 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, PARANAPANEMA ON 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 PARANAPANEMA ON 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 PARANAPANEMA 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 PARANAPANEMA ON to hire the very best people irrespective of their geographical location.

Building a culture of innovation

– managers at PARANAPANEMA ON 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 Metal Mining industry.

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Threats PARANAPANEMA ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of PARANAPANEMA ON are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, PARANAPANEMA 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 Metal Mining sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Metal Mining industry are lowering. It can presents PARANAPANEMA ON with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for PARANAPANEMA ON in Metal Mining industry. The Metal Mining 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.

Consumer confidence and its impact on PARANAPANEMA 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 Metal Mining industry and other sectors.

High dependence on third party suppliers

– PARANAPANEMA 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.

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. PARANAPANEMA ON needs to understand the core reasons impacting the Metal Mining industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– PARANAPANEMA ON has witnessed rapid integration of technology during Covid-19 in the Metal Mining industry. As one of the leading players in the industry, PARANAPANEMA ON needs to keep up with the evolution of technology in the Metal Mining 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.

Increasing wage structure of PARANAPANEMA 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 PARANAPANEMA ON.

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 PARANAPANEMA ON in the Metal Mining sector and impact the bottomline of the organization.

Regulatory challenges

– PARANAPANEMA ON 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 Metal Mining industry regulations.

Increasing international competition and downward pressure on margins

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

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 PARANAPANEMA ON.

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. PARANAPANEMA ON 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.

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Weighted SWOT Analysis of PARANAPANEMA ON Template, Example

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

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