McEwen Mining Inc. (MUX) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for McEwen Mining Inc. (Canada)
Based on various researches at Oak Spring University , McEwen Mining Inc. is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing commodity prices, technology disruption, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of McEwen Mining Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that McEwen Mining Inc. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the McEwen Mining Inc., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which McEwen Mining Inc. 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 McEwen Mining Inc. can be done for the following purposes –
1. Strategic planning of McEwen Mining Inc.
2. Improving business portfolio management of McEwen Mining Inc.
3. Assessing feasibility of the new initiative in Canada
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of McEwen Mining Inc.
Strengths of McEwen Mining Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of McEwen Mining Inc. are -
Effective Research and Development (R&D)
– McEwen Mining Inc. has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – McEwen Mining Inc. staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of McEwen Mining Inc.
– The covid-19 pandemic has put organizational resilience at the centre of everthing McEwen Mining Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– McEwen Mining Inc. is one of the leading players in the 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.
Analytics focus
– McEwen Mining Inc. 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 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.
Innovation driven organization
– McEwen Mining Inc. is one of the most innovative firm in sector.
High switching costs
– The high switching costs that McEwen Mining Inc. 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.
Successful track record of launching new products
– McEwen Mining Inc. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. McEwen Mining Inc. 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
– McEwen Mining Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of McEwen Mining Inc. have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of McEwen Mining Inc. in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in industry
- digital transformation varies from industry to industry. For McEwen Mining Inc. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. McEwen Mining Inc. 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.
Low bargaining power of suppliers
– Suppliers of McEwen Mining Inc. in the sector have low bargaining power. McEwen Mining Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps McEwen Mining Inc. to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of McEwen Mining Inc. comprises – understanding the underlying the factors in the 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.
Weaknesses of McEwen Mining Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McEwen Mining Inc. are -
Increasing silos among functional specialists
– The organizational structure of McEwen Mining Inc. is dominated by functional specialists. It is not different from other players in the industry, but McEwen Mining Inc. needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help McEwen Mining Inc. to focus more on services in the industry rather than just following the product oriented approach.
Lack of clear differentiation of McEwen Mining Inc. products
– To increase the profitability and margins on the products, McEwen Mining Inc. needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– McEwen Mining Inc. 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.
Ability to respond to the competition
– As the decision making is very deliberative at McEwen Mining Inc., in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. McEwen Mining Inc. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in industry
– because of the regulatory requirements in Canada, McEwen Mining Inc. 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 industry.
Compensation and incentives
– The revenue per employee of McEwen Mining Inc. is just above the 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 McEwen Mining Inc. supply chain. Even after few cautionary changes, McEwen Mining Inc. is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left McEwen Mining Inc. vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though McEwen Mining Inc. has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. McEwen Mining Inc. should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, McEwen Mining Inc. is slow explore the new channels of communication. These new channels of communication can help McEwen Mining Inc. to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, McEwen Mining Inc. 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 McEwen Mining Inc. ‘s star products
– The top 2 products and services of McEwen Mining Inc. still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though McEwen Mining Inc. has relatively successful track record of launching new products.
McEwen Mining Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of McEwen Mining Inc. are -
Learning at scale
– Online learning technologies has now opened space for McEwen Mining Inc. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, McEwen Mining Inc. can use these opportunities to build new business models that can help the communities that McEwen Mining Inc. operates in. Secondly it can use opportunities from government spending in sector.
Creating value in data economy
– The success of analytics program of McEwen Mining Inc. has opened avenues for new revenue streams for the organization in industry. This can help McEwen Mining Inc. to build a more holistic ecosystem for McEwen Mining Inc. products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– McEwen Mining Inc. 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, McEwen Mining Inc. 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, McEwen Mining Inc. 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 McEwen Mining Inc. to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. McEwen Mining Inc. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, McEwen Mining Inc. is facing challenges because of the dominance of functional experts in the organization. McEwen Mining Inc. 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for McEwen Mining Inc. in the industry. Now McEwen Mining Inc. can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for McEwen Mining Inc. 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.
Developing new processes and practices
– McEwen Mining Inc. 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.
Using analytics as competitive advantage
– McEwen Mining Inc. has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled McEwen Mining Inc. to build a competitive advantage using analytics. The analytics driven competitive advantage can help McEwen Mining Inc. to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. McEwen Mining Inc. 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. McEwen Mining Inc. 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.
Threats McEwen Mining Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of McEwen Mining Inc. are -
Technology acceleration in Forth Industrial Revolution
– McEwen Mining Inc. has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, McEwen Mining Inc. needs to keep up with the evolution of technology in the 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.
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. McEwen Mining Inc. 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
– McEwen Mining Inc. 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.
Increasing wage structure of McEwen Mining Inc.
– 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 McEwen Mining Inc..
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, McEwen Mining Inc. 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for McEwen Mining Inc. in industry. The 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.
High dependence on third party suppliers
– McEwen Mining Inc. 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.
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 McEwen Mining Inc. business can come under increasing regulations regarding data privacy, data security, etc.
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. McEwen Mining Inc. needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents McEwen Mining Inc. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that McEwen Mining Inc. is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– McEwen Mining Inc. 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. McEwen Mining Inc. can take advantage of this fund but it will also bring new competitors in the industry.
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 McEwen Mining Inc. in the sector and impact the bottomline of the organization.
Weighted SWOT Analysis of McEwen Mining Inc. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at McEwen Mining Inc. 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 McEwen Mining Inc. 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 McEwen Mining Inc. 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 McEwen Mining Inc. 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 McEwen Mining Inc. needs to make to build a sustainable competitive advantage.
