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 – supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
wage bills are increasing, talent flight as more people leaving formal jobs, 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 -
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.
Analytics focus
– Lucara Diamond Corp 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 Non-Metallic 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.
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.
Operational resilience
– The operational resilience strategy of Lucara Diamond Corp 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.
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.
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.
Effective Research and Development (R&D)
– Lucara Diamond Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lucara Diamond Corp staying ahead in the Non-Metallic Mining industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Superior customer experience
– The customer experience strategy of Lucara Diamond Corp in Non-Metallic Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Lucara Diamond Corp 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.
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.
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.
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 -
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.
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 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.
Slow decision making process
– As mentioned earlier in the report, Lucara Diamond Corp 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. Lucara Diamond Corp 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 bargaining power of channel partners in Non-Metallic Mining industry
– because of the regulatory requirements in Canada, Lucara Diamond Corp 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 Non-Metallic Mining industry.
Capital Spending Reduction
– Even during the low interest decade, Lucara Diamond Corp 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.
Products dominated business model
– Even though Lucara Diamond Corp 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. Lucara Diamond Corp should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Lucara Diamond Corp has a high cash cycle compare to other players in the Non-Metallic 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.
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.
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.
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.
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 -
Developing new processes and practices
– Lucara Diamond Corp 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.
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 Lucara Diamond Corp 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Non-Metallic Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lucara Diamond Corp 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. Lucara Diamond Corp 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.
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.
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.
Building a culture of innovation
– managers at Lucara Diamond Corp 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lucara Diamond Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Non-Metallic Mining industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Lucara Diamond Corp 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.
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.
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.
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.
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.
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.
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 -
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lucara Diamond Corp in Non-Metallic Mining industry. The Non-Metallic 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.
Stagnating economy with rate increase
– Lucara Diamond Corp 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.
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.
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.
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.
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. Lucara Diamond Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology acceleration in Forth Industrial Revolution
– Lucara Diamond Corp has witnessed rapid integration of technology during Covid-19 in the Non-Metallic Mining industry. As one of the leading players in the industry, Lucara Diamond Corp needs to keep up with the evolution of technology in the Non-Metallic 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.
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.
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.
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.
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.