SWOT Analysis / TOWS Matrix for Ivanhoe Mines (Canada)
Based on various researches at Oak Spring University , Ivanhoe Mines is operating in a macro-environment that has been destablized by – wage bills are increasing, there is backlash against globalization, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ivanhoe Mines can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ivanhoe Mines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ivanhoe 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 Ivanhoe Mines can be done for the following purposes –
1. Strategic planning of Ivanhoe Mines
2. Improving business portfolio management of Ivanhoe Mines
3. Assessing feasibility of the new initiative in Canada
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ivanhoe Mines
Strengths of Ivanhoe Mines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ivanhoe Mines are -
Analytics focus
– Ivanhoe Mines 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 Metal Mining industry. The technology infrastructure of Canada 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.
Cross disciplinary teams
– Horizontal connected teams at the Ivanhoe Mines 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
– Ivanhoe Mines is one of the most innovative firm in Metal Mining sector.
Ability to lead change in Metal Mining
– Ivanhoe Mines is one of the leading players in the Metal Mining industry in Canada. Over the years it has not only transformed the business landscape in the Metal Mining industry in Canada but also across the existing markets. The ability to lead change has enabled Ivanhoe Mines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Ivanhoe Mines in the Basic Materials sector have low bargaining power. Ivanhoe Mines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ivanhoe Mines to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ivanhoe Mines has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ivanhoe Mines 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.
Diverse revenue streams
– Ivanhoe Mines is present in almost all the verticals within the Metal Mining industry. This has provided Ivanhoe Mines 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.
Organizational Resilience of Ivanhoe Mines
– The covid-19 pandemic has put organizational resilience at the centre of everthing Ivanhoe Mines does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Ivanhoe Mines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ivanhoe Mines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Ivanhoe Mines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ivanhoe 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.
Superior customer experience
– The customer experience strategy of Ivanhoe Mines in Metal Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Ivanhoe Mines is one of the leading players in the Metal Mining 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.
Weaknesses of Ivanhoe Mines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ivanhoe Mines are -
Low market penetration in new markets
– Outside its home market of Canada, Ivanhoe Mines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Ivanhoe Mines needs to have more collaboration between its sales team and marketing team. Sales professionals in the Metal Mining industry have deep experience in developing customer relationships. Marketing department at Ivanhoe Mines can leverage the sales team experience to cultivate customer relationships as Ivanhoe Mines is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Ivanhoe Mines 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 Metal Mining industry using digital technology.
Lack of clear differentiation of Ivanhoe Mines products
– To increase the profitability and margins on the products, Ivanhoe Mines needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Metal Mining industry
– because of the regulatory requirements in Canada, Ivanhoe Mines 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 Metal Mining industry.
Increasing silos among functional specialists
– The organizational structure of Ivanhoe Mines is dominated by functional specialists. It is not different from other players in the Metal Mining industry, but Ivanhoe Mines needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ivanhoe Mines to focus more on services in the Metal Mining industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Ivanhoe Mines 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 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 Ivanhoe Mines supply chain. Even after few cautionary changes, Ivanhoe Mines is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ivanhoe Mines vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Ivanhoe Mines has a high cash cycle compare to other players in the Metal Mining industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Ivanhoe 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.
Slow decision making process
– As mentioned earlier in the report, Ivanhoe Mines 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. Ivanhoe Mines 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.
Ivanhoe Mines Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ivanhoe Mines are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ivanhoe 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 Ivanhoe 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ivanhoe Mines can use these opportunities to build new business models that can help the communities that Ivanhoe Mines operates in. Secondly it can use opportunities from government spending in Metal Mining sector.
Buying journey improvements
– Ivanhoe Mines 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ivanhoe Mines in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Metal Mining industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ivanhoe Mines 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.
Using analytics as competitive advantage
– Ivanhoe Mines 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 Ivanhoe Mines to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ivanhoe Mines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Ivanhoe 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.
Learning at scale
– Online learning technologies has now opened space for Ivanhoe Mines 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ivanhoe Mines 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 Ivanhoe Mines to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Ivanhoe 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 Metal Mining industry.
Use of Bitcoin and other crypto currencies for transactions in Metal Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ivanhoe Mines in the Metal Mining industry. Now Ivanhoe Mines can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Ivanhoe Mines has opened avenues for new revenue streams for the organization in Metal Mining industry. This can help Ivanhoe Mines to build a more holistic ecosystem for Ivanhoe Mines products in the Metal Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Ivanhoe Mines to increase its market reach. Ivanhoe 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.
Threats Ivanhoe Mines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ivanhoe Mines are -
Consumer confidence and its impact on Ivanhoe 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 Metal Mining industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ivanhoe Mines 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.
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 Ivanhoe Mines.
Easy access to finance
– Easy access to finance in Metal Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ivanhoe Mines can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Ivanhoe 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. Ivanhoe Mines can take advantage of this fund but it will also bring new competitors in the Metal Mining industry.
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. Ivanhoe Mines needs to understand the core reasons impacting the Metal Mining 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 Ivanhoe Mines in the Metal Mining sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Ivanhoe Mines has witnessed rapid integration of technology during Covid-19 in the Metal Mining industry. As one of the leading players in the industry, Ivanhoe Mines 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Metal Mining industry are lowering. It can presents Ivanhoe Mines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.
Stagnating economy with rate increase
– Ivanhoe Mines 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 Metal Mining industry.
Regulatory challenges
– Ivanhoe 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 Metal Mining industry regulations.
Shortening product life cycle
– it is one of the major threat that Ivanhoe Mines is facing in Metal Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Ivanhoe Mines business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Ivanhoe Mines Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ivanhoe 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 Ivanhoe 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 Ivanhoe 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 Ivanhoe 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 Ivanhoe Mines needs to make to build a sustainable competitive advantage.
