SWOT Analysis / TOWS Matrix for Agnico Eagle Mines (Canada)
Based on various researches at Oak Spring University , Agnico Eagle Mines is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing transportation and logistics costs, there is increasing trade war between United States & China, wage bills are increasing, geopolitical disruptions,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Agnico Eagle Mines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Agnico Eagle Mines can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agnico Eagle Mines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agnico Eagle Mines 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 Agnico Eagle Mines can be done for the following purposes –
1. Strategic planning of Agnico Eagle Mines
2. Improving business portfolio management of Agnico Eagle Mines
3. Assessing feasibility of the new initiative in Canada
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Agnico Eagle Mines
Strengths of Agnico Eagle Mines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agnico Eagle Mines are -
High switching costs
– The high switching costs that Agnico Eagle Mines 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.
Innovation driven organization
– Agnico Eagle Mines is one of the most innovative firm in Gold & Silver sector.
High brand equity
– Agnico Eagle Mines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agnico Eagle Mines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Agnico Eagle Mines 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 Agnico Eagle Mines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Agnico Eagle Mines emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Gold & Silver industry
– Agnico Eagle Mines is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Agnico Eagle Mines 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.
Ability to lead change in Gold & Silver
– Agnico Eagle Mines is one of the leading players in the Gold & Silver industry in Canada. Over the years it has not only transformed the business landscape in the Gold & Silver industry in Canada but also across the existing markets. The ability to lead change has enabled Agnico Eagle Mines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Agnico Eagle Mines is one of the leading players in the Gold & Silver industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Agnico Eagle Mines in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Gold & Silver industry
– Agnico Eagle Mines has clearly differentiated products in the market place. This has enabled Agnico Eagle Mines to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Agnico Eagle Mines to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Agnico Eagle Mines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Agnico Eagle Mines 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.
Low bargaining power of suppliers
– Suppliers of Agnico Eagle Mines in the Basic Materials sector have low bargaining power. Agnico Eagle Mines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Agnico Eagle Mines to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Agnico Eagle Mines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Agnico Eagle Mines are -
High dependence on Agnico Eagle Mines ‘s star products
– The top 2 products and services of Agnico Eagle Mines 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 Agnico Eagle Mines has relatively successful track record of launching new products.
Need for greater diversity
– Agnico Eagle Mines 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 to strategic competitive environment developments
– As Agnico Eagle Mines 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.
Products dominated business model
– Even though Agnico Eagle Mines has some of the most successful models in the Gold & Silver industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Agnico Eagle Mines should strive to include more intangible value offerings along with its core products and services.
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 Agnico Eagle Mines supply chain. Even after few cautionary changes, Agnico Eagle Mines is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Agnico Eagle Mines vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Agnico Eagle Mines 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 cash cycle compare to competitors
Agnico Eagle Mines 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.
Low market penetration in new markets
– Outside its home market of Canada, Agnico Eagle Mines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Agnico Eagle Mines is slow explore the new channels of communication. These new channels of communication can help Agnico Eagle Mines to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Agnico Eagle Mines, 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.
Lack of clear differentiation of Agnico Eagle Mines products
– To increase the profitability and margins on the products, Agnico Eagle Mines needs to provide more differentiated products than what it is currently offering in the marketplace.
Agnico Eagle Mines Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Agnico Eagle Mines are -
Buying journey improvements
– Agnico Eagle Mines 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Agnico Eagle Mines 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 Agnico Eagle Mines to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Agnico Eagle Mines 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agnico Eagle Mines can use these opportunities to build new business models that can help the communities that Agnico Eagle Mines operates in. Secondly it can use opportunities from government spending in Gold & Silver sector.
Creating value in data economy
– The success of analytics program of Agnico Eagle Mines has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Agnico Eagle Mines to build a more holistic ecosystem for Agnico Eagle Mines products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Agnico Eagle Mines 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Agnico Eagle Mines is facing challenges because of the dominance of functional experts in the organization. Agnico Eagle Mines 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.
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 Agnico Eagle Mines 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 Agnico Eagle Mines 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.
Using analytics as competitive advantage
– Agnico Eagle Mines 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 Agnico Eagle Mines to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agnico Eagle Mines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Agnico Eagle Mines to increase its market reach. Agnico Eagle Mines 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.
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. Agnico Eagle Mines 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. Agnico Eagle Mines 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 Agnico Eagle Mines in the Gold & Silver industry. Now Agnico Eagle Mines can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Agnico Eagle Mines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Agnico Eagle Mines are -
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.
Regulatory challenges
– Agnico Eagle Mines 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.
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 Agnico Eagle Mines business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Gold & Silver industry are lowering. It can presents Agnico Eagle Mines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Gold & Silver sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Agnico Eagle Mines 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.
Consumer confidence and its impact on Agnico Eagle Mines 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.
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. Agnico Eagle Mines needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
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 Agnico Eagle Mines.
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 Agnico Eagle Mines in the Gold & Silver sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Agnico Eagle Mines 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.
Increasing wage structure of Agnico Eagle Mines
– 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 Agnico Eagle Mines.
Environmental challenges
– Agnico Eagle Mines 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. Agnico Eagle Mines can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
Weighted SWOT Analysis of Agnico Eagle Mines Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Agnico Eagle Mines 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 Agnico Eagle Mines 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 Agnico Eagle Mines 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 Agnico Eagle Mines 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 Agnico Eagle Mines needs to make to build a sustainable competitive advantage.