SWOT Analysis / TOWS Matrix for SouthGobi Resources (Canada)
Based on various researches at Oak Spring University , SouthGobi Resources is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is backlash against globalization, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of SouthGobi Resources
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SouthGobi Resources can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SouthGobi Resources, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SouthGobi Resources 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 SouthGobi Resources can be done for the following purposes –
1. Strategic planning of SouthGobi Resources
2. Improving business portfolio management of SouthGobi Resources
3. Assessing feasibility of the new initiative in Canada
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SouthGobi Resources
Strengths of SouthGobi Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SouthGobi Resources are -
Successful track record of launching new products
– SouthGobi Resources has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SouthGobi Resources 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.
Analytics focus
– SouthGobi Resources 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 Coal 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.
Low bargaining power of suppliers
– Suppliers of SouthGobi Resources in the Energy sector have low bargaining power. SouthGobi Resources has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SouthGobi Resources to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of SouthGobi Resources
– The covid-19 pandemic has put organizational resilience at the centre of everthing SouthGobi Resources does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– SouthGobi Resources is one of the most innovative firm in Coal sector.
Cross disciplinary teams
– Horizontal connected teams at the SouthGobi Resources 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 Coal
– SouthGobi Resources is one of the leading players in the Coal industry in Canada. Over the years it has not only transformed the business landscape in the Coal industry in Canada but also across the existing markets. The ability to lead change has enabled SouthGobi Resources in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– SouthGobi Resources has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Coal industry. Secondly the value chain collaborators of SouthGobi Resources have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– SouthGobi Resources has one of the best training and development program in Energy 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.
Learning organization
- SouthGobi Resources 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 SouthGobi Resources is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SouthGobi Resources emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– SouthGobi Resources is one of the leading players in the Coal 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.
Strong track record of project management in the Coal industry
– SouthGobi Resources is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of SouthGobi Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SouthGobi Resources 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 SouthGobi Resources supply chain. Even after few cautionary changes, SouthGobi Resources is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SouthGobi Resources vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– SouthGobi Resources 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.
Capital Spending Reduction
– Even during the low interest decade, SouthGobi Resources 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 Coal industry using digital technology.
Compensation and incentives
– The revenue per employee of SouthGobi Resources is just above the Coal 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.
Employees’ less understanding of SouthGobi Resources strategy
– From the outside it seems that the employees of SouthGobi Resources 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.
Increasing silos among functional specialists
– The organizational structure of SouthGobi Resources is dominated by functional specialists. It is not different from other players in the Coal industry, but SouthGobi Resources needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SouthGobi Resources to focus more on services in the Coal industry rather than just following the product oriented approach.
High cash cycle compare to competitors
SouthGobi Resources has a high cash cycle compare to other players in the Coal industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though SouthGobi Resources has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SouthGobi Resources should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, SouthGobi Resources has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. SouthGobi Resources 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 dependence on SouthGobi Resources ‘s star products
– The top 2 products and services of SouthGobi Resources still accounts for major business revenue. This dependence on star products in Coal industry has resulted into insufficient focus on developing new products, even though SouthGobi Resources has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, SouthGobi Resources is slow explore the new channels of communication. These new channels of communication can help SouthGobi Resources to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
SouthGobi Resources Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SouthGobi Resources are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, SouthGobi Resources 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 SouthGobi Resources to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– SouthGobi Resources can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SouthGobi Resources 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 SouthGobi Resources to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– SouthGobi Resources can develop new processes and procedures in Coal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for SouthGobi Resources in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Coal industry, but it has also influenced the consumer preferences. SouthGobi Resources 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, SouthGobi Resources is facing challenges because of the dominance of functional experts in the organization. SouthGobi Resources can utilize new technology in the field of Coal industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– SouthGobi Resources can improve the customer journey of consumers in the Coal 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.
Learning at scale
– Online learning technologies has now opened space for SouthGobi Resources 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SouthGobi Resources can use these opportunities to build new business models that can help the communities that SouthGobi Resources operates in. Secondly it can use opportunities from government spending in Coal sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SouthGobi Resources 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. SouthGobi Resources 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.
Using analytics as competitive advantage
– SouthGobi Resources has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled SouthGobi Resources to build a competitive advantage using analytics. The analytics driven competitive advantage can help SouthGobi Resources to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Coal industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SouthGobi Resources in the Coal industry. Now SouthGobi Resources can target international markets with far fewer capital restrictions requirements than the existing system.
Threats SouthGobi Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SouthGobi Resources are -
Stagnating economy with rate increase
– SouthGobi Resources 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 Coal industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents SouthGobi Resources with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
High dependence on third party suppliers
– SouthGobi Resources 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.
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.
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. SouthGobi Resources needs to understand the core reasons impacting the Coal industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– SouthGobi Resources has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, SouthGobi Resources needs to keep up with the evolution of technology in the Coal 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.
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. SouthGobi Resources 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.
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.
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 SouthGobi Resources in the Coal sector and impact the bottomline of the organization.
Environmental challenges
– SouthGobi Resources 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. SouthGobi Resources can take advantage of this fund but it will also bring new competitors in the Coal industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SouthGobi Resources in Coal industry. The Coal 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.
Consumer confidence and its impact on SouthGobi Resources 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 Coal industry and other sectors.
Increasing wage structure of SouthGobi Resources
– 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 SouthGobi Resources.
Weighted SWOT Analysis of SouthGobi Resources Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SouthGobi Resources 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 SouthGobi Resources 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 SouthGobi Resources 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 SouthGobi Resources 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 SouthGobi Resources needs to make to build a sustainable competitive advantage.
