SWOT Analysis / TOWS Matrix for MAG Silver (United States)
Based on various researches at Oak Spring University , MAG Silver is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MAG Silver can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MAG Silver, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MAG Silver 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 MAG Silver can be done for the following purposes –
1. Strategic planning of MAG Silver
2. Improving business portfolio management of MAG Silver
3. Assessing feasibility of the new initiative in United States
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MAG Silver
Strengths of MAG Silver | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MAG Silver are -
Innovation driven organization
– MAG Silver is one of the most innovative firm in Gold & Silver sector.
High brand equity
– MAG Silver has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled MAG Silver to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– MAG Silver 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 Gold & Silver industry. The technology infrastructure of United States 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.
Sustainable margins compare to other players in Gold & Silver industry
– MAG Silver has clearly differentiated products in the market place. This has enabled MAG Silver to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped MAG Silver to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– MAG Silver is one of the leading players in the Gold & Silver industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– MAG Silver 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 Gold & Silver industry
– MAG Silver is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the MAG Silver 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.
Effective Research and Development (R&D)
– MAG Silver has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – MAG Silver staying ahead in the Gold & Silver industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For MAG Silver digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MAG Silver 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.
Successful track record of launching new products
– MAG Silver has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. MAG Silver 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.
Superior customer experience
– The customer experience strategy of MAG Silver in Gold & Silver industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of MAG Silver | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MAG Silver are -
Increasing silos among functional specialists
– The organizational structure of MAG Silver is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but MAG Silver needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help MAG Silver to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.
High bargaining power of channel partners in Gold & Silver industry
– because of the regulatory requirements in United States, MAG Silver 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 Gold & Silver industry.
Slow to strategic competitive environment developments
– As MAG Silver is one of the leading players in the Gold & Silver industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Gold & Silver industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at MAG Silver, in the dynamic environment of Gold & Silver industry it has struggled to respond to the nimble upstart competition. MAG Silver has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MAG Silver is slow explore the new channels of communication. These new channels of communication can help MAG Silver to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
High dependence on MAG Silver ‘s star products
– The top 2 products and services of MAG Silver still accounts for major business revenue. This dependence on star products in Gold & Silver industry has resulted into insufficient focus on developing new products, even though MAG Silver has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of MAG Silver is just above the Gold & Silver 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.
Need for greater diversity
– MAG Silver 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.
Employees’ less understanding of MAG Silver strategy
– From the outside it seems that the employees of MAG Silver 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.
Lack of clear differentiation of MAG Silver products
– To increase the profitability and margins on the products, MAG Silver needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, MAG Silver 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 Gold & Silver industry using digital technology.
MAG Silver Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MAG Silver are -
Low interest rates
– Even though inflation is raising its head in most developed economies, MAG Silver 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.
Loyalty marketing
– MAG Silver 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.
Leveraging digital technologies
– MAG Silver 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.
Using analytics as competitive advantage
– MAG Silver has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Gold & Silver sector. This continuous investment in analytics has enabled MAG Silver to build a competitive advantage using analytics. The analytics driven competitive advantage can help MAG Silver to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– MAG Silver can use the latest technology developments to improve its manufacturing and designing process in Gold & Silver 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.
Use of Bitcoin and other crypto currencies for transactions in Gold & Silver industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for MAG Silver in the Gold & Silver industry. Now MAG Silver 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 Gold & Silver industry, but it has also influenced the consumer preferences. MAG Silver 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, MAG Silver is facing challenges because of the dominance of functional experts in the organization. MAG Silver can utilize new technology in the field of Gold & Silver industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for MAG Silver in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Gold & Silver industry, and it will provide faster access to the consumers.
Buying journey improvements
– MAG Silver can improve the customer journey of consumers in the Gold & Silver 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for MAG Silver 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 MAG Silver to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at MAG Silver 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 Gold & Silver industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, MAG Silver 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 MAG Silver to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats MAG Silver External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MAG Silver are -
Technology acceleration in Forth Industrial Revolution
– MAG Silver has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, MAG Silver needs to keep up with the evolution of technology in the Gold & Silver 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.
Easy access to finance
– Easy access to finance in Gold & Silver industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. MAG Silver can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for MAG Silver in Gold & Silver industry. The Gold & Silver 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 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. MAG Silver needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
Regulatory challenges
– MAG Silver needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Gold & Silver industry regulations.
High dependence on third party suppliers
– MAG Silver 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 MAG Silver business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of MAG Silver
– 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 MAG Silver.
Shortening product life cycle
– it is one of the major threat that MAG Silver is facing in Gold & Silver sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on MAG Silver 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 Gold & Silver industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, MAG Silver 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 MAG Silver prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, MAG Silver may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Gold & Silver sector.
Stagnating economy with rate increase
– MAG Silver 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 Gold & Silver industry.
Weighted SWOT Analysis of MAG Silver Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MAG Silver 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 MAG Silver 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 MAG Silver 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 MAG Silver 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 MAG Silver needs to make to build a sustainable competitive advantage.
