SWOT Analysis / TOWS Matrix for Avalon Advanced Materials (Canada)
Based on various researches at Oak Spring University , Avalon Advanced Materials is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, geopolitical disruptions, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Avalon Advanced Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Avalon Advanced Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Avalon Advanced Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Avalon Advanced Materials 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 Avalon Advanced Materials can be done for the following purposes –
1. Strategic planning of Avalon Advanced Materials
2. Improving business portfolio management of Avalon Advanced Materials
3. Assessing feasibility of the new initiative in Canada
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Avalon Advanced Materials
Strengths of Avalon Advanced Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Avalon Advanced Materials are -
Innovation driven organization
– Avalon Advanced Materials is one of the most innovative firm in Metal Mining sector.
Highly skilled collaborators
– Avalon Advanced Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Metal Mining industry. Secondly the value chain collaborators of Avalon Advanced Materials have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Avalon Advanced Materials 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 Metal 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.
Low bargaining power of suppliers
– Suppliers of Avalon Advanced Materials in the Basic Materials sector have low bargaining power. Avalon Advanced Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Avalon Advanced Materials to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Avalon Advanced Materials 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.
Organizational Resilience of Avalon Advanced Materials
– The covid-19 pandemic has put organizational resilience at the centre of everthing Avalon Advanced Materials does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Avalon Advanced Materials 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 Avalon Advanced Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Avalon Advanced Materials emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Avalon Advanced Materials is one of the leading players in the Metal 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.
Training and development
– Avalon Advanced Materials 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.
Diverse revenue streams
– Avalon Advanced Materials is present in almost all the verticals within the Metal Mining industry. This has provided Avalon Advanced Materials 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.
Operational resilience
– The operational resilience strategy of Avalon Advanced Materials comprises – understanding the underlying the factors in the Metal 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.
High brand equity
– Avalon Advanced Materials has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Avalon Advanced Materials to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Avalon Advanced Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Avalon Advanced Materials are -
High operating costs
– Compare to the competitors, Avalon Advanced Materials has high operating costs in the Metal Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Avalon Advanced Materials lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Avalon Advanced Materials is dominated by functional specialists. It is not different from other players in the Metal Mining industry, but Avalon Advanced Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Avalon Advanced Materials to focus more on services in the Metal Mining industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Metal Mining industry, Avalon Advanced Materials needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee of Avalon Advanced Materials is just above the Metal Mining 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.
Slow decision making process
– As mentioned earlier in the report, Avalon Advanced Materials has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Metal Mining industry over the last five years. Avalon Advanced Materials 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.
No frontier risks strategy
– From the 10K / annual statement of Avalon Advanced Materials, it seems that company is thinking out the frontier risks that can impact Metal 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.
Lack of clear differentiation of Avalon Advanced Materials products
– To increase the profitability and margins on the products, Avalon Advanced Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Metal Mining industry
– because of the regulatory requirements in Canada, Avalon Advanced Materials 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 Metal Mining industry.
Aligning sales with marketing
– From the outside it seems that Avalon Advanced Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Metal Mining industry have deep experience in developing customer relationships. Marketing department at Avalon Advanced Materials can leverage the sales team experience to cultivate customer relationships as Avalon Advanced Materials is planning to shift buying processes online.
Need for greater diversity
– Avalon Advanced Materials 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.
Ability to respond to the competition
– As the decision making is very deliberative at Avalon Advanced Materials, in the dynamic environment of Metal Mining industry it has struggled to respond to the nimble upstart competition. Avalon Advanced Materials has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Avalon Advanced Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Avalon Advanced Materials are -
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. Avalon Advanced Materials can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Avalon Advanced Materials can develop new processes and procedures in Metal 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Metal Mining industry, but it has also influenced the consumer preferences. Avalon Advanced Materials can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Avalon Advanced Materials can use these opportunities to build new business models that can help the communities that Avalon Advanced Materials operates in. Secondly it can use opportunities from government spending in Metal Mining sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Avalon Advanced Materials 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Avalon Advanced Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Metal Mining industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Metal Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Avalon Advanced Materials 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. Avalon Advanced Materials 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Avalon Advanced Materials 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 Avalon Advanced Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Avalon Advanced Materials 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
– Avalon Advanced Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Metal Mining sector. This continuous investment in analytics has enabled Avalon Advanced Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help Avalon Advanced Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Avalon Advanced Materials has opened avenues for new revenue streams for the organization in Metal Mining industry. This can help Avalon Advanced Materials to build a more holistic ecosystem for Avalon Advanced Materials products in the Metal Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Metal Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Avalon Advanced Materials in the Metal Mining industry. Now Avalon Advanced Materials can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Avalon Advanced Materials 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 Avalon Advanced Materials to hire the very best people irrespective of their geographical location.
Threats Avalon Advanced Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Avalon Advanced Materials are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Avalon Advanced Materials may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Metal Mining sector.
Stagnating economy with rate increase
– Avalon Advanced Materials 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 Metal Mining industry.
High dependence on third party suppliers
– Avalon Advanced Materials 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 Avalon Advanced Materials business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Avalon Advanced Materials in Metal Mining industry. The Metal 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.
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.
Easy access to finance
– Easy access to finance in Metal Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Avalon Advanced Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Avalon Advanced Materials has witnessed rapid integration of technology during Covid-19 in the Metal Mining industry. As one of the leading players in the industry, Avalon Advanced Materials needs to keep up with the evolution of technology in the Metal 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Avalon Advanced Materials 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 Avalon Advanced Materials 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. Avalon Advanced Materials 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.
Regulatory challenges
– Avalon Advanced Materials 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 Metal Mining industry regulations.
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.
Consumer confidence and its impact on Avalon Advanced Materials 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 Metal Mining industry and other sectors.
Weighted SWOT Analysis of Avalon Advanced Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Avalon Advanced Materials 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 Avalon Advanced Materials 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 Avalon Advanced Materials 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 Avalon Advanced Materials 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 Avalon Advanced Materials needs to make to build a sustainable competitive advantage.