SWOT Analysis / TOWS Matrix for Alacer Gold (United States)
Based on various researches at Oak Spring University , Alacer Gold is operating in a macro-environment that has been destablized by – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Alacer Gold can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alacer Gold, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alacer Gold 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 Alacer Gold can be done for the following purposes –
1. Strategic planning of Alacer Gold
2. Improving business portfolio management of Alacer Gold
3. Assessing feasibility of the new initiative in United States
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alacer Gold
Strengths of Alacer Gold | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alacer Gold are -
Diverse revenue streams
– Alacer Gold is present in almost all the verticals within the Gold & Silver industry. This has provided Alacer Gold 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.
Ability to recruit top talent
– Alacer Gold is one of the leading players in the Gold & Silver industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Gold & Silver industry
– Alacer Gold has clearly differentiated products in the market place. This has enabled Alacer Gold to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Alacer Gold to invest into research and development (R&D) and innovation.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For Alacer Gold digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alacer Gold 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.
Innovation driven organization
– Alacer Gold is one of the most innovative firm in Gold & Silver sector.
Operational resilience
– The operational resilience strategy of Alacer Gold 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.
Low bargaining power of suppliers
– Suppliers of Alacer Gold in the Basic Materials sector have low bargaining power. Alacer Gold has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alacer Gold to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Alacer Gold
– The covid-19 pandemic has put organizational resilience at the centre of everthing Alacer Gold does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Gold & Silver industry
– Alacer Gold is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Alacer Gold 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)
– Alacer Gold has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Alacer Gold 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.
Superior customer experience
– The customer experience strategy of Alacer Gold in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Alacer Gold | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alacer Gold are -
No frontier risks strategy
– From the 10K / annual statement of Alacer Gold, 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.
Workers concerns about automation
– As automation is fast increasing in the Gold & Silver industry, Alacer Gold 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.
Compensation and incentives
– The revenue per employee of Alacer Gold 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.
Need for greater diversity
– Alacer Gold 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 Alacer Gold strategy
– From the outside it seems that the employees of Alacer Gold 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.
Slow to strategic competitive environment developments
– As Alacer Gold 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alacer Gold is slow explore the new channels of communication. These new channels of communication can help Alacer Gold to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
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 Alacer Gold supply chain. Even after few cautionary changes, Alacer Gold is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alacer Gold vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Alacer Gold 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.
High dependence on Alacer Gold ‘s star products
– The top 2 products and services of Alacer Gold 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 Alacer Gold has relatively successful track record of launching new products.
Skills based hiring in Gold & Silver industry
– The stress on hiring functional specialists at Alacer Gold 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.
Alacer Gold Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Alacer Gold are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alacer Gold can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Alacer Gold 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.
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. Alacer Gold can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Alacer Gold 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 Alacer Gold in the Gold & Silver industry. Now Alacer Gold can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Alacer Gold 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.
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 Alacer Gold 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.
Building a culture of innovation
– managers at Alacer Gold 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
– Alacer Gold 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.
Creating value in data economy
– The success of analytics program of Alacer Gold has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Alacer Gold to build a more holistic ecosystem for Alacer Gold products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Alacer Gold 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 Alacer Gold to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alacer Gold to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alacer Gold can use these opportunities to build new business models that can help the communities that Alacer Gold operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Better consumer reach
– The expansion of the 5G network will help Alacer Gold to increase its market reach. Alacer Gold 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 Alacer Gold External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Alacer Gold are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Gold & Silver industry are lowering. It can presents Alacer Gold with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Gold & Silver sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alacer Gold 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.
Shortening product life cycle
– it is one of the major threat that Alacer Gold is facing in Gold & Silver sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Alacer Gold needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
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 Alacer Gold in the Gold & Silver sector and impact the bottomline of the organization.
Consumer confidence and its impact on Alacer Gold 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.
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 Alacer Gold business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Alacer Gold
– 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 Alacer Gold.
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.
Stagnating economy with rate increase
– Alacer Gold 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.
Environmental challenges
– Alacer Gold 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. Alacer Gold can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
Technology acceleration in Forth Industrial Revolution
– Alacer Gold has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, Alacer Gold 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 Alacer Gold Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Alacer Gold 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 Alacer Gold 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 Alacer Gold 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 Alacer Gold 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 Alacer Gold needs to make to build a sustainable competitive advantage.