Based on various researches at Oak Spring University , Quest Rare Minerals is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Quest Rare Minerals
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Quest Rare Minerals can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Quest Rare Minerals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Quest Rare 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 Quest Rare Minerals can be done for the following purposes –
1. Strategic planning of Quest Rare Minerals
2. Improving business portfolio management of Quest Rare Minerals
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Quest Rare Minerals
Strengths of Quest Rare Minerals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Quest Rare Minerals are -
Operational resilience
– The operational resilience strategy of Quest Rare Minerals 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.
Highly skilled collaborators
– Quest Rare Minerals 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 Quest Rare Minerals have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Quest Rare 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 Quest Rare Minerals is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Quest Rare Minerals emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Quest Rare Minerals has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Quest Rare Minerals staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Quest Rare Minerals has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Quest Rare 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Quest Rare Minerals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Quest Rare 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.
Diverse revenue streams
– Quest Rare Minerals is present in almost all the verticals within the industry. This has provided Quest Rare 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.
Training and development
– Quest Rare Minerals has one of the best training and development program in 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 industry
– Quest Rare Minerals is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Quest Rare Minerals
– The covid-19 pandemic has put organizational resilience at the centre of everthing Quest Rare Minerals does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Quest Rare Minerals in the sector have low bargaining power. Quest Rare Minerals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Quest Rare Minerals to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Quest Rare Minerals 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.
Weaknesses of Quest Rare Minerals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Quest Rare Minerals are -
Low market penetration in new markets
– Outside its home market of United States, Quest Rare Minerals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Quest Rare Minerals ‘s star products
– The top 2 products and services of Quest Rare Minerals still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Quest Rare Minerals has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Quest Rare Minerals, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Quest Rare Minerals has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Quest Rare Minerals has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Quest Rare Minerals lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Quest Rare Minerals, it seems that company is thinking out the frontier risks that can impact 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.
Compensation and incentives
– The revenue per employee of Quest Rare Minerals 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.
Skills based hiring in industry
– The stress on hiring functional specialists at Quest Rare 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.
Products dominated business model
– Even though Quest Rare Minerals 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. Quest Rare Minerals should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Quest Rare Minerals needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Quest Rare Minerals can leverage the sales team experience to cultivate customer relationships as Quest Rare Minerals is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Quest Rare Minerals has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Quest Rare Minerals 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 cash cycle compare to competitors
Quest Rare Minerals has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Quest Rare Minerals Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Quest Rare Minerals are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Quest Rare Minerals 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Quest Rare Minerals can use these opportunities to build new business models that can help the communities that Quest Rare Minerals operates in. Secondly it can use opportunities from government spending in sector.
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 Quest Rare Minerals 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.
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. Quest Rare Minerals 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, Quest Rare Minerals is facing challenges because of the dominance of functional experts in the organization. Quest Rare Minerals 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.
Loyalty marketing
– Quest Rare 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.
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. Quest Rare Minerals can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Quest Rare Minerals to increase its market reach. Quest Rare 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Quest Rare Minerals 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 Quest Rare Minerals to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Quest Rare Minerals can use the latest technology developments to improve its manufacturing and designing process in 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 industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Quest Rare Minerals in the industry. Now Quest Rare Minerals can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Quest Rare 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 industry.
Creating value in data economy
– The success of analytics program of Quest Rare Minerals has opened avenues for new revenue streams for the organization in industry. This can help Quest Rare Minerals to build a more holistic ecosystem for Quest Rare Minerals products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Quest Rare Minerals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Quest Rare Minerals are -
Technology acceleration in Forth Industrial Revolution
– Quest Rare Minerals has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Quest Rare Minerals 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.
Regulatory challenges
– Quest Rare Minerals 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 industry regulations.
Stagnating economy with rate increase
– Quest Rare 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 industry.
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. Quest Rare Minerals needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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.
Environmental challenges
– Quest Rare Minerals 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. Quest Rare Minerals can take advantage of this fund but it will also bring new competitors in the industry.
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 Quest Rare Minerals.
High dependence on third party suppliers
– Quest Rare 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Quest Rare 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 Quest Rare Minerals prominent markets.
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. Quest Rare Minerals 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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Quest Rare Minerals can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Quest Rare 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 industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Quest Rare Minerals is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Quest Rare Minerals Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Quest Rare 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 Quest Rare 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 Quest Rare 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 Quest Rare 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 Quest Rare Minerals needs to make to build a sustainable competitive advantage.