ArcelorMittal South Africa ADR (AMSIY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for ArcelorMittal South Africa ADR (United States)
Based on various researches at Oak Spring University , ArcelorMittal South Africa ADR is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of ArcelorMittal South Africa ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ArcelorMittal South Africa ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ArcelorMittal South Africa ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR can be done for the following purposes –
1. Strategic planning of ArcelorMittal South Africa ADR
2. Improving business portfolio management of ArcelorMittal South Africa ADR
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ArcelorMittal South Africa ADR
Strengths of ArcelorMittal South Africa ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ArcelorMittal South Africa ADR are -
Cross disciplinary teams
– Horizontal connected teams at the ArcelorMittal South Africa ADR 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
– ArcelorMittal South Africa ADR is one of the most innovative firm in sector.
Sustainable margins compare to other players in industry
– ArcelorMittal South Africa ADR has clearly differentiated products in the market place. This has enabled ArcelorMittal South Africa ADR to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped ArcelorMittal South Africa ADR to invest into research and development (R&D) and innovation.
Digital Transformation in industry
- digital transformation varies from industry to industry. For ArcelorMittal South Africa ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ArcelorMittal South Africa ADR 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.
Learning organization
- ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ArcelorMittal South Africa ADR emphasize – knowledge, initiative, and innovation.
Analytics focus
– ArcelorMittal South Africa ADR 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 industry. The technology infrastructure of United States 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.
Ability to lead change in
– ArcelorMittal South Africa ADR is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled ArcelorMittal South Africa ADR in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the industry
– ArcelorMittal South Africa ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– ArcelorMittal South Africa ADR has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ArcelorMittal South Africa ADR 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.
Training and development
– ArcelorMittal South Africa ADR has one of the best training and development program in 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.
Low bargaining power of suppliers
– Suppliers of ArcelorMittal South Africa ADR in the sector have low bargaining power. ArcelorMittal South Africa ADR has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ArcelorMittal South Africa ADR to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– ArcelorMittal South Africa ADR has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ArcelorMittal South Africa ADR to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of ArcelorMittal South Africa ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ArcelorMittal South Africa ADR are -
No frontier risks strategy
– From the 10K / annual statement of ArcelorMittal South Africa ADR, it seems that company is thinking out the frontier risks that can impact 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.
Increasing silos among functional specialists
– The organizational structure of ArcelorMittal South Africa ADR is dominated by functional specialists. It is not different from other players in the industry, but ArcelorMittal South Africa ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ArcelorMittal South Africa ADR to focus more on services in the industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of United States, ArcelorMittal South Africa ADR needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, ArcelorMittal South Africa ADR has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract ArcelorMittal South Africa ADR lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, ArcelorMittal South Africa ADR 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 industry using digital technology.
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 ArcelorMittal South Africa ADR supply chain. Even after few cautionary changes, ArcelorMittal South Africa ADR is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left ArcelorMittal South Africa ADR vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
ArcelorMittal South Africa ADR has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that ArcelorMittal South Africa ADR needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at ArcelorMittal South Africa ADR can leverage the sales team experience to cultivate customer relationships as ArcelorMittal South Africa ADR is planning to shift buying processes online.
High dependence on ArcelorMittal South Africa ADR ‘s star products
– The top 2 products and services of ArcelorMittal South Africa ADR still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though ArcelorMittal South Africa ADR has relatively successful track record of launching new products.
Need for greater diversity
– ArcelorMittal South Africa ADR 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.
Skills based hiring in industry
– The stress on hiring functional specialists at ArcelorMittal South Africa ADR 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.
ArcelorMittal South Africa ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ArcelorMittal South Africa ADR are -
Low interest rates
– Even though inflation is raising its head in most developed economies, ArcelorMittal South Africa ADR 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.
Building a culture of innovation
– managers at ArcelorMittal South Africa ADR 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 industry.
Leveraging digital technologies
– ArcelorMittal South Africa ADR 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, ArcelorMittal South Africa ADR is facing challenges because of the dominance of functional experts in the organization. ArcelorMittal South Africa ADR can utilize new technology in the field of 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 ArcelorMittal South Africa ADR can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– ArcelorMittal South Africa ADR can develop new processes and procedures in 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. ArcelorMittal South Africa ADR can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for ArcelorMittal South Africa ADR 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for ArcelorMittal South Africa ADR in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Buying journey improvements
– ArcelorMittal South Africa ADR can improve the customer journey of consumers in the 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.
Manufacturing automation
– ArcelorMittal South Africa ADR can use the latest technology developments to improve its manufacturing and designing process in 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.
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. ArcelorMittal South Africa ADR can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ArcelorMittal South Africa ADR can use these opportunities to build new business models that can help the communities that ArcelorMittal South Africa ADR operates in. Secondly it can use opportunities from government spending in sector.
Threats ArcelorMittal South Africa ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ArcelorMittal South Africa ADR are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, ArcelorMittal South Africa ADR may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ArcelorMittal South Africa ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 ArcelorMittal South Africa ADR in the sector and impact the bottomline of the organization.
Consumer confidence and its impact on ArcelorMittal South Africa ADR 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 industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR prominent markets.
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. ArcelorMittal South Africa ADR 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.
Stagnating economy with rate increase
– ArcelorMittal South Africa ADR 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 industry.
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.
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 ArcelorMittal South Africa ADR.
High dependence on third party suppliers
– ArcelorMittal South Africa ADR 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. ArcelorMittal South Africa ADR needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Environmental challenges
– ArcelorMittal South Africa ADR 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. ArcelorMittal South Africa ADR can take advantage of this fund but it will also bring new competitors in the industry.
Increasing wage structure of ArcelorMittal South Africa ADR
– 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 ArcelorMittal South Africa ADR.
Weighted SWOT Analysis of ArcelorMittal South Africa ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR 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 ArcelorMittal South Africa ADR needs to make to build a sustainable competitive advantage.