SWOT Analysis / TOWS Matrix for Lucara Diamond Corp (Canada)
Based on various researches at Oak Spring University , Lucara Diamond Corp is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is backlash against globalization, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Lucara Diamond Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lucara Diamond Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lucara Diamond Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lucara Diamond Corp 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 Lucara Diamond Corp can be done for the following purposes –
1. Strategic planning of Lucara Diamond Corp
2. Improving business portfolio management of Lucara Diamond Corp
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 Lucara Diamond Corp
Strengths of Lucara Diamond Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lucara Diamond Corp are -
Cross disciplinary teams
– Horizontal connected teams at the Lucara Diamond Corp 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.
Successful track record of launching new products
– Lucara Diamond Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lucara Diamond Corp 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 Lucara Diamond Corp in the Basic Materials sector have low bargaining power. Lucara Diamond Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lucara Diamond Corp to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Lucara Diamond Corp 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.
Strong track record of project management in the Non-Metallic Mining industry
– Lucara Diamond Corp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Non-Metallic Mining industry
- digital transformation varies from industry to industry. For Lucara Diamond Corp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lucara Diamond Corp 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.
Highly skilled collaborators
– Lucara Diamond Corp 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 Lucara Diamond Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Lucara Diamond Corp is present in almost all the verticals within the Non-Metallic Mining industry. This has provided Lucara Diamond Corp 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.
High switching costs
– The high switching costs that Lucara Diamond Corp 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.
High brand equity
– Lucara Diamond Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lucara Diamond Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Lucara Diamond Corp 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 Lucara Diamond Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lucara Diamond Corp emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Non-Metallic Mining industry
– Lucara Diamond Corp has clearly differentiated products in the market place. This has enabled Lucara Diamond Corp to fetch slight price premium compare to the competitors in the Non-Metallic Mining industry. The sustainable margins have also helped Lucara Diamond Corp to invest into research and development (R&D) and innovation.
Weaknesses of Lucara Diamond Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lucara Diamond Corp are -
Need for greater diversity
– Lucara Diamond Corp 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.
Workers concerns about automation
– As automation is fast increasing in the Non-Metallic Mining industry, Lucara Diamond Corp 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.
High dependence on Lucara Diamond Corp ‘s star products
– The top 2 products and services of Lucara Diamond Corp 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 Lucara Diamond Corp has relatively successful track record of launching new products.
Lack of clear differentiation of Lucara Diamond Corp products
– To increase the profitability and margins on the products, Lucara Diamond Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Lucara Diamond Corp has high operating costs in the Non-Metallic Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lucara Diamond Corp lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Lucara Diamond Corp, 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.
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 Lucara Diamond Corp supply chain. Even after few cautionary changes, Lucara Diamond Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lucara Diamond Corp vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Lucara Diamond Corp is one of the leading players in the Non-Metallic Mining industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Non-Metallic Mining industry in last five years.
Aligning sales with marketing
– From the outside it seems that Lucara Diamond Corp needs to have more collaboration between its sales team and marketing team. Sales professionals in the Non-Metallic Mining industry have deep experience in developing customer relationships. Marketing department at Lucara Diamond Corp can leverage the sales team experience to cultivate customer relationships as Lucara Diamond Corp is planning to shift buying processes online.
Skills based hiring in Non-Metallic Mining industry
– The stress on hiring functional specialists at Lucara Diamond Corp 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.
Employees’ less understanding of Lucara Diamond Corp strategy
– From the outside it seems that the employees of Lucara Diamond Corp 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.
Lucara Diamond Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lucara Diamond Corp are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Lucara Diamond Corp 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.
Leveraging digital technologies
– Lucara Diamond Corp 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.
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. Lucara Diamond Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Lucara Diamond Corp has opened avenues for new revenue streams for the organization in Non-Metallic Mining industry. This can help Lucara Diamond Corp to build a more holistic ecosystem for Lucara Diamond Corp products in the Non-Metallic Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lucara Diamond Corp 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 Lucara Diamond Corp to hire the very best people irrespective of their geographical location.
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. Lucara Diamond Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Lucara Diamond Corp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lucara Diamond Corp 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
– Lucara Diamond Corp 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.
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 Lucara Diamond Corp in the Non-Metallic Mining industry. Now Lucara Diamond Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lucara Diamond Corp can use these opportunities to build new business models that can help the communities that Lucara Diamond Corp operates in. Secondly it can use opportunities from government spending in Non-Metallic Mining sector.
Using analytics as competitive advantage
– Lucara Diamond Corp 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 Lucara Diamond Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lucara Diamond Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Lucara Diamond Corp can improve the customer journey of consumers in the Non-Metallic 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.
Threats Lucara Diamond Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lucara Diamond Corp are -
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. Lucara Diamond Corp 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.
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. Lucara Diamond Corp needs to understand the core reasons impacting the Non-Metallic Mining industry. This will help it in building a better workplace.
Environmental challenges
– Lucara Diamond Corp 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. Lucara Diamond Corp can take advantage of this fund but it will also bring new competitors in the Non-Metallic Mining industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Non-Metallic Mining industry are lowering. It can presents Lucara Diamond Corp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Non-Metallic Mining sector.
High dependence on third party suppliers
– Lucara Diamond Corp 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.
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 Lucara Diamond Corp.
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 Lucara Diamond Corp in the Non-Metallic Mining sector and impact the bottomline of the organization.
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 Lucara Diamond Corp business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lucara Diamond Corp 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 Lucara Diamond Corp prominent markets.
Increasing wage structure of Lucara Diamond Corp
– 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 Lucara Diamond Corp.
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, Lucara Diamond Corp 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.
Shortening product life cycle
– it is one of the major threat that Lucara Diamond Corp is facing in Non-Metallic Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Lucara Diamond Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp 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 Lucara Diamond Corp needs to make to build a sustainable competitive advantage.
