SWOT Analysis / TOWS Matrix for Almaden Minerals (Canada)
Based on various researches at Oak Spring University , Almaden Minerals is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, increasing energy prices, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Almaden Minerals can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Almaden Minerals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Almaden Minerals 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 Almaden Minerals can be done for the following purposes –
1. Strategic planning of Almaden Minerals
2. Improving business portfolio management of Almaden Minerals
3. Assessing feasibility of the new initiative in Canada
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Almaden Minerals
Strengths of Almaden Minerals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Almaden Minerals are -
Low bargaining power of suppliers
– Suppliers of Almaden Minerals in the Basic Materials sector have low bargaining power. Almaden Minerals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Almaden Minerals to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Almaden Minerals 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.
Successful track record of launching new products
– Almaden Minerals has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Almaden Minerals 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.
Learning organization
- Almaden Minerals 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 Almaden Minerals is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Almaden Minerals emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Almaden Minerals 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.
Ability to lead change in Gold & Silver
– Almaden Minerals is one of the leading players in the Gold & Silver industry in Canada. Over the years it has not only transformed the business landscape in the Gold & Silver industry in Canada but also across the existing markets. The ability to lead change has enabled Almaden Minerals in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Almaden Minerals is present in almost all the verticals within the Gold & Silver industry. This has provided Almaden Minerals 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.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For Almaden Minerals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Almaden Minerals 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.
Organizational Resilience of Almaden Minerals
– The covid-19 pandemic has put organizational resilience at the centre of everthing Almaden Minerals 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 Almaden Minerals comprises – understanding the underlying the factors in the Gold & Silver 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.
Ability to recruit top talent
– Almaden Minerals is one of the leading players in the Gold & Silver 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.
Highly skilled collaborators
– Almaden Minerals has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Gold & Silver industry. Secondly the value chain collaborators of Almaden Minerals have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Almaden Minerals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Almaden Minerals are -
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 Almaden Minerals supply chain. Even after few cautionary changes, Almaden Minerals is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Almaden Minerals vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Almaden Minerals has some of the most successful models in the Gold & Silver industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Almaden Minerals should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Almaden Minerals has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee of Almaden Minerals 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.
No frontier risks strategy
– From the 10K / annual statement of Almaden Minerals, it seems that company is thinking out the frontier risks that can impact Gold & Silver 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 Almaden Minerals ‘s star products
– The top 2 products and services of Almaden Minerals 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 Almaden Minerals has relatively successful track record of launching new products.
Employees’ less understanding of Almaden Minerals strategy
– From the outside it seems that the employees of Almaden Minerals 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.
Skills based hiring in Gold & Silver industry
– The stress on hiring functional specialists at Almaden Minerals 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.
Increasing silos among functional specialists
– The organizational structure of Almaden Minerals is dominated by functional specialists. It is not different from other players in the Gold & Silver industry, but Almaden Minerals needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Almaden Minerals to focus more on services in the Gold & Silver industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Almaden Minerals, in the dynamic environment of Gold & Silver industry it has struggled to respond to the nimble upstart competition. Almaden Minerals has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Almaden Minerals 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.
Almaden Minerals Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Almaden Minerals are -
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 Almaden Minerals in the Gold & Silver industry. Now Almaden Minerals can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Almaden Minerals can develop new processes and procedures in Gold & Silver 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
– Almaden Minerals 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 Almaden Minerals to build a competitive advantage using analytics. The analytics driven competitive advantage can help Almaden Minerals to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Almaden Minerals to increase its market reach. Almaden Minerals will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Almaden Minerals 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Gold & Silver industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Almaden Minerals 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. Almaden Minerals 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Almaden Minerals 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.
Creating value in data economy
– The success of analytics program of Almaden Minerals has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Almaden Minerals to build a more holistic ecosystem for Almaden Minerals products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Almaden Minerals 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. Almaden Minerals can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Almaden Minerals 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Almaden Minerals is facing challenges because of the dominance of functional experts in the organization. Almaden Minerals 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.
Loyalty marketing
– Almaden Minerals 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.
Threats Almaden Minerals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Almaden Minerals are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Almaden Minerals 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Almaden Minerals 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Almaden Minerals 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 Almaden Minerals prominent markets.
Increasing wage structure of Almaden Minerals
– 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 Almaden Minerals.
High dependence on third party suppliers
– Almaden Minerals 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.
Technology acceleration in Forth Industrial Revolution
– Almaden Minerals has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, Almaden Minerals 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.
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. Almaden Minerals needs to understand the core reasons impacting the Gold & Silver industry. This will help it in building a better workplace.
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 Almaden Minerals.
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.
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 Almaden Minerals business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Almaden Minerals 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.
Stagnating economy with rate increase
– Almaden Minerals 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Almaden Minerals Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals needs to make to build a sustainable competitive advantage.
