Orocobre (ORL) SWOT Analysis / TOWS Matrix / MBA Resources
Non-Metallic Mining
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Orocobre (Canada)
Based on various researches at Oak Spring University , Orocobre is operating in a macro-environment that has been destablized by – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, 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%, geopolitical disruptions,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Orocobre can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orocobre, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orocobre 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 Orocobre can be done for the following purposes –
1. Strategic planning of Orocobre
2. Improving business portfolio management of Orocobre
3. Assessing feasibility of the new initiative in Canada
4. Making a Non-Metallic Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Orocobre
Strengths of Orocobre | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orocobre are -
Innovation driven organization
– Orocobre is one of the most innovative firm in Non-Metallic Mining sector.
Ability to lead change in Non-Metallic Mining
– Orocobre is one of the leading players in the Non-Metallic Mining industry in Canada. Over the years it has not only transformed the business landscape in the Non-Metallic Mining industry in Canada but also across the existing markets. The ability to lead change has enabled Orocobre in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Non-Metallic Mining industry
– Orocobre has clearly differentiated products in the market place. This has enabled Orocobre to fetch slight price premium compare to the competitors in the Non-Metallic Mining industry. The sustainable margins have also helped Orocobre to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Orocobre has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Non-Metallic Mining industry. Secondly the value chain collaborators of Orocobre have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Orocobre 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.
Organizational Resilience of Orocobre
– The covid-19 pandemic has put organizational resilience at the centre of everthing Orocobre does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Orocobre comprises – understanding the underlying the factors in the Non-Metallic 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.
Learning organization
- Orocobre 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 Orocobre is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Orocobre emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Non-Metallic Mining industry
– Orocobre is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Orocobre has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Orocobre to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Orocobre is one of the leading players in the Non-Metallic 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.
Training and development
– Orocobre has one of the best training and development program in Basic Materials 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.
Weaknesses of Orocobre | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Orocobre are -
Low market penetration in new markets
– Outside its home market of Canada, Orocobre 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, Orocobre is slow explore the new channels of communication. These new channels of communication can help Orocobre to provide better information regarding Non-Metallic Mining products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Non-Metallic Mining industry, Orocobre 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.
Products dominated business model
– Even though Orocobre has some of the most successful models in the Non-Metallic Mining industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Orocobre should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Orocobre 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 Non-Metallic Mining industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Orocobre is dominated by functional specialists. It is not different from other players in the Non-Metallic Mining industry, but Orocobre needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Orocobre to focus more on services in the Non-Metallic Mining industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Orocobre has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Non-Metallic Mining industry over the last five years. Orocobre 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.
High dependence on Orocobre ‘s star products
– The top 2 products and services of Orocobre still accounts for major business revenue. This dependence on star products in Non-Metallic Mining industry has resulted into insufficient focus on developing new products, even though Orocobre has relatively successful track record of launching new products.
Skills based hiring in Non-Metallic Mining industry
– The stress on hiring functional specialists at Orocobre 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.
Compensation and incentives
– The revenue per employee of Orocobre is just above the Non-Metallic 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.
No frontier risks strategy
– From the 10K / annual statement of Orocobre, it seems that company is thinking out the frontier risks that can impact Non-Metallic Mining 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.
Orocobre Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Orocobre are -
Manufacturing automation
– Orocobre can use the latest technology developments to improve its manufacturing and designing process in Non-Metallic 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.
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. Orocobre can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Orocobre 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
– Orocobre 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.
Building a culture of innovation
– managers at Orocobre 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 Non-Metallic Mining industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Orocobre can use these opportunities to build new business models that can help the communities that Orocobre operates in. Secondly it can use opportunities from government spending in Non-Metallic Mining sector.
Learning at scale
– Online learning technologies has now opened space for Orocobre 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.
Creating value in data economy
– The success of analytics program of Orocobre has opened avenues for new revenue streams for the organization in Non-Metallic Mining industry. This can help Orocobre to build a more holistic ecosystem for Orocobre products in the Non-Metallic Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Non-Metallic Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Orocobre in the Non-Metallic Mining industry. Now Orocobre can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Non-Metallic Mining industry, but it has also influenced the consumer preferences. Orocobre can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Orocobre can develop new processes and procedures in Non-Metallic Mining 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.
Using analytics as competitive advantage
– Orocobre has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Non-Metallic Mining sector. This continuous investment in analytics has enabled Orocobre to build a competitive advantage using analytics. The analytics driven competitive advantage can help Orocobre to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Orocobre is facing challenges because of the dominance of functional experts in the organization. Orocobre can utilize new technology in the field of Non-Metallic Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Orocobre External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Orocobre are -
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 Orocobre business can come under increasing regulations regarding data privacy, data security, etc.
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 Orocobre in the Non-Metallic Mining sector and impact the bottomline of the organization.
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 Orocobre.
Easy access to finance
– Easy access to finance in Non-Metallic Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Orocobre can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Orocobre 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Orocobre may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Non-Metallic Mining sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orocobre 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 Orocobre prominent markets.
Stagnating economy with rate increase
– Orocobre 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 Non-Metallic Mining industry.
High dependence on third party suppliers
– Orocobre 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. Orocobre needs to understand the core reasons impacting the Non-Metallic Mining industry. This will help it in building a better workplace.
Consumer confidence and its impact on Orocobre 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 Non-Metallic Mining industry and other sectors.
Environmental challenges
– Orocobre 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. Orocobre can take advantage of this fund but it will also bring new competitors in the Non-Metallic Mining industry.
Increasing wage structure of Orocobre
– 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 Orocobre.
Weighted SWOT Analysis of Orocobre Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Orocobre 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 Orocobre 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 Orocobre 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 Orocobre 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 Orocobre needs to make to build a sustainable competitive advantage.
