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 – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption,
there is backlash against globalization, cloud computing is disrupting traditional business models, 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 -
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.
Highly skilled collaborators
– Ivanhoe Mines has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Metal Mining industry. Secondly the value chain collaborators of Ivanhoe Mines have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Metal Mining industry
– Ivanhoe 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.
Innovation driven organization
– Ivanhoe Mines is one of the most innovative firm in Metal Mining sector.
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.
Operational resilience
– The operational resilience strategy of Ivanhoe Mines 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.
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.
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.
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.
Learning organization
- Ivanhoe 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 Ivanhoe Mines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ivanhoe Mines emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Metal Mining industry
– Ivanhoe Mines has clearly differentiated products in the market place. This has enabled Ivanhoe Mines to fetch slight price premium compare to the competitors in the Metal Mining industry. The sustainable margins have also helped Ivanhoe Mines to invest into research and development (R&D) and innovation.
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.
Weaknesses of Ivanhoe Mines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ivanhoe Mines are -
Employees’ less understanding of Ivanhoe Mines strategy
– From the outside it seems that the employees of Ivanhoe Mines 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.
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.
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.
Products dominated business model
– Even though Ivanhoe Mines 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. Ivanhoe Mines should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Ivanhoe Mines 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 Ivanhoe Mines lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Ivanhoe Mines, in the dynamic environment of Metal Mining industry it has struggled to respond to the nimble upstart competition. Ivanhoe Mines has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High dependence on Ivanhoe Mines ‘s star products
– The top 2 products and services of Ivanhoe Mines still accounts for major business revenue. This dependence on star products in Metal Mining industry has resulted into insufficient focus on developing new products, even though Ivanhoe Mines has relatively successful track record of launching new products.
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.
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.
Ivanhoe Mines Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ivanhoe Mines are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ivanhoe Mines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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 Ivanhoe 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.
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.
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.
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.
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. Ivanhoe Mines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Ivanhoe Mines can use the latest technology developments to improve its manufacturing and designing process in Metal Mining 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.
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. Ivanhoe Mines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Threats Ivanhoe Mines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ivanhoe Mines are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ivanhoe Mines 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 Ivanhoe Mines prominent markets.
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.
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.
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.
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.
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.
Increasing wage structure of Ivanhoe 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 Ivanhoe Mines.
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.
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.
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.
High dependence on third party suppliers
– Ivanhoe 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ivanhoe 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 Metal Mining sector.
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.