SWOT Analysis / TOWS Matrix for Sirius Minerals (United States)
Based on various researches at Oak Spring University , Sirius Minerals 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%, increasing transportation and logistics costs, increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sirius Minerals can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sirius Minerals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sirius 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 Sirius Minerals can be done for the following purposes –
1. Strategic planning of Sirius Minerals
2. Improving business portfolio management of Sirius Minerals
3. Assessing feasibility of the new initiative in United States
4. Making a Non-Metallic Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sirius Minerals
Strengths of Sirius Minerals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sirius Minerals are -
High switching costs
– The high switching costs that Sirius 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.
Training and development
– Sirius Minerals has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Sirius Minerals in the Basic Materials sector have low bargaining power. Sirius Minerals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sirius Minerals to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Non-Metallic Mining industry
– Sirius Minerals has clearly differentiated products in the market place. This has enabled Sirius Minerals to fetch slight price premium compare to the competitors in the Non-Metallic Mining industry. The sustainable margins have also helped Sirius Minerals to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Sirius Minerals comprises – understanding the underlying the factors in the Non-Metallic 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.
Highly skilled collaborators
– Sirius Minerals has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Non-Metallic Mining industry. Secondly the value chain collaborators of Sirius Minerals have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Sirius Minerals 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 Non-Metallic Mining industry. The technology infrastructure of United States 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.
Superior customer experience
– The customer experience strategy of Sirius Minerals in Non-Metallic Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Sirius 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 Sirius Minerals is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sirius Minerals emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Sirius Minerals is one of the leading players in the Non-Metallic Mining industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Non-Metallic Mining industry
- digital transformation varies from industry to industry. For Sirius Minerals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sirius 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
– Sirius Minerals is present in almost all the verticals within the Non-Metallic Mining industry. This has provided Sirius 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.
Weaknesses of Sirius Minerals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sirius Minerals are -
High cash cycle compare to competitors
Sirius Minerals has a high cash cycle compare to other players in the Non-Metallic Mining industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of United States, Sirius Minerals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Sirius Minerals needs to have more collaboration between its sales team and marketing team. Sales professionals in the Non-Metallic Mining industry have deep experience in developing customer relationships. Marketing department at Sirius Minerals can leverage the sales team experience to cultivate customer relationships as Sirius Minerals is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Sirius Minerals, it seems that company is thinking out the frontier risks that can impact Non-Metallic 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.
High operating costs
– Compare to the competitors, Sirius Minerals has high operating costs in the Non-Metallic Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sirius Minerals lucrative customers.
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 Sirius Minerals supply chain. Even after few cautionary changes, Sirius Minerals is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sirius Minerals vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Sirius Minerals, in the dynamic environment of Non-Metallic Mining industry it has struggled to respond to the nimble upstart competition. Sirius Minerals has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Sirius Minerals 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 Non-Metallic Mining industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Non-Metallic Mining industry, Sirius Minerals 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.
Slow to strategic competitive environment developments
– As Sirius Minerals is one of the leading players in the Non-Metallic Mining industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Non-Metallic Mining industry in last five years.
Lack of clear differentiation of Sirius Minerals products
– To increase the profitability and margins on the products, Sirius Minerals needs to provide more differentiated products than what it is currently offering in the marketplace.
Sirius Minerals Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sirius Minerals are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sirius 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 Sirius Minerals to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Sirius 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 Non-Metallic Mining industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sirius Minerals is facing challenges because of the dominance of functional experts in the organization. Sirius Minerals can utilize new technology in the field of Non-Metallic Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sirius Minerals can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Sirius Minerals can develop new processes and procedures in Non-Metallic 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.
Manufacturing automation
– Sirius Minerals can use the latest technology developments to improve its manufacturing and designing process in Non-Metallic Mining 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sirius Minerals can use these opportunities to build new business models that can help the communities that Sirius Minerals operates in. Secondly it can use opportunities from government spending in Non-Metallic Mining sector.
Loyalty marketing
– Sirius 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sirius Minerals can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Sirius Minerals has opened avenues for new revenue streams for the organization in Non-Metallic Mining industry. This can help Sirius Minerals to build a more holistic ecosystem for Sirius Minerals products in the Non-Metallic Mining industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Sirius Minerals to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Sirius Minerals can improve the customer journey of consumers in the Non-Metallic Mining 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.
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. Sirius Minerals can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Sirius Minerals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sirius Minerals are -
Increasing wage structure of Sirius Minerals
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Sirius Minerals.
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. Sirius 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.
High dependence on third party suppliers
– Sirius Minerals high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology 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.
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.
Technology acceleration in Forth Industrial Revolution
– Sirius Minerals has witnessed rapid integration of technology during Covid-19 in the Non-Metallic Mining industry. As one of the leading players in the industry, Sirius Minerals needs to keep up with the evolution of technology in the Non-Metallic 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.
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 Sirius Minerals business can come under increasing regulations regarding data privacy, data security, etc.
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 Sirius Minerals in the Non-Metallic Mining sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Non-Metallic Mining industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sirius Minerals can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Non-Metallic Mining industry are lowering. It can presents Sirius Minerals with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Non-Metallic Mining sector.
Shortening product life cycle
– it is one of the major threat that Sirius Minerals is facing in Non-Metallic Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Sirius 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 Non-Metallic Mining industry regulations.
Consumer confidence and its impact on Sirius 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 Non-Metallic Mining industry and other sectors.
Weighted SWOT Analysis of Sirius Minerals Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sirius 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 Sirius 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 Sirius 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 Sirius 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 Sirius Minerals needs to make to build a sustainable competitive advantage.