SWOT Analysis / TOWS Matrix for Freegold Ventures (Canada)
Based on various researches at Oak Spring University , Freegold Ventures is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, there is increasing trade war between United States & China,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Freegold Ventures
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Freegold Ventures can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Freegold Ventures, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Freegold Ventures 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 Freegold Ventures can be done for the following purposes –
1. Strategic planning of Freegold Ventures
2. Improving business portfolio management of Freegold Ventures
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 Freegold Ventures
Strengths of Freegold Ventures | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Freegold Ventures are -
Analytics focus
– Freegold Ventures is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Gold & Silver industry. The technology infrastructure of 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.
Successful track record of launching new products
– Freegold Ventures has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Freegold Ventures 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.
Strong track record of project management in the Gold & Silver industry
– Freegold Ventures is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Freegold Ventures 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.
Diverse revenue streams
– Freegold Ventures is present in almost all the verticals within the Gold & Silver industry. This has provided Freegold Ventures 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.
High brand equity
– Freegold Ventures has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Freegold Ventures to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Freegold Ventures has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Freegold Ventures staying ahead in the Gold & Silver industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Freegold Ventures 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 Freegold Ventures have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Freegold Ventures 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.
Operational resilience
– The operational resilience strategy of Freegold Ventures 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.
Low bargaining power of suppliers
– Suppliers of Freegold Ventures in the Basic Materials sector have low bargaining power. Freegold Ventures has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Freegold Ventures to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Gold & Silver industry
– Freegold Ventures has clearly differentiated products in the market place. This has enabled Freegold Ventures to fetch slight price premium compare to the competitors in the Gold & Silver industry. The sustainable margins have also helped Freegold Ventures to invest into research and development (R&D) and innovation.
Weaknesses of Freegold Ventures | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Freegold Ventures 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 Freegold Ventures supply chain. Even after few cautionary changes, Freegold Ventures is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Freegold Ventures vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Gold & Silver industry, Freegold Ventures 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.
High operating costs
– Compare to the competitors, Freegold Ventures has high operating costs in the Gold & Silver industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Freegold Ventures lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Freegold Ventures is slow explore the new channels of communication. These new channels of communication can help Freegold Ventures to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Freegold Ventures 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.
No frontier risks strategy
– From the 10K / annual statement of Freegold Ventures, 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.
Slow to strategic competitive environment developments
– As Freegold Ventures is one of the leading players in the Gold & Silver industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Gold & Silver industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Freegold Ventures, in the dynamic environment of Gold & Silver industry it has struggled to respond to the nimble upstart competition. Freegold Ventures has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Freegold Ventures strategy
– From the outside it seems that the employees of Freegold Ventures 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.
Products dominated business model
– Even though Freegold Ventures 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. Freegold Ventures should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Freegold Ventures 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.
Freegold Ventures Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Freegold Ventures are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Freegold Ventures 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 Freegold Ventures to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Freegold Ventures 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Gold & Silver industry, but it has also influenced the consumer preferences. Freegold Ventures can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Freegold Ventures 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Freegold Ventures 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.
Developing new processes and practices
– Freegold Ventures 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Freegold Ventures in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Gold & Silver industry, and it will provide faster access to the consumers.
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 Freegold Ventures 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.
Loyalty marketing
– Freegold Ventures 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.
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 Freegold Ventures in the Gold & Silver industry. Now Freegold Ventures can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Freegold Ventures to increase its market reach. Freegold Ventures 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.
Creating value in data economy
– The success of analytics program of Freegold Ventures has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help Freegold Ventures to build a more holistic ecosystem for Freegold Ventures products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Freegold Ventures 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 Freegold Ventures to build a competitive advantage using analytics. The analytics driven competitive advantage can help Freegold Ventures to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Freegold Ventures External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Freegold Ventures are -
Technology acceleration in Forth Industrial Revolution
– Freegold Ventures has witnessed rapid integration of technology during Covid-19 in the Gold & Silver industry. As one of the leading players in the industry, Freegold Ventures 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.
Environmental challenges
– Freegold Ventures 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. Freegold Ventures can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Freegold Ventures may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Gold & Silver sector.
Stagnating economy with rate increase
– Freegold Ventures 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.
Increasing wage structure of Freegold Ventures
– 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 Freegold Ventures.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Freegold Ventures 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 Freegold Ventures prominent markets.
Regulatory challenges
– Freegold Ventures needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Gold & Silver industry regulations.
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 Freegold Ventures in the Gold & Silver sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Freegold Ventures 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.
Easy access to finance
– Easy access to finance in Gold & Silver industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Freegold Ventures can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Freegold Ventures.
Weighted SWOT Analysis of Freegold Ventures Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Freegold Ventures 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 Freegold Ventures 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 Freegold Ventures 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 Freegold Ventures 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 Freegold Ventures needs to make to build a sustainable competitive advantage.
