SWOT Analysis / TOWS Matrix for Boart Longyear (Australia)
Based on various researches at Oak Spring University , Boart Longyear 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%, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Boart Longyear can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boart Longyear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boart Longyear 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 Boart Longyear can be done for the following purposes –
1. Strategic planning of Boart Longyear
2. Improving business portfolio management of Boart Longyear
3. Assessing feasibility of the new initiative in Australia
4. Making a Oil Well Services & Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Boart Longyear
Strengths of Boart Longyear | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boart Longyear are -
Digital Transformation in Oil Well Services & Equipment industry
- digital transformation varies from industry to industry. For Boart Longyear digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boart Longyear 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.
Training and development
– Boart Longyear 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.
Ability to lead change in Oil Well Services & Equipment
– Boart Longyear is one of the leading players in the Oil Well Services & Equipment industry in Australia. Over the years it has not only transformed the business landscape in the Oil Well Services & Equipment industry in Australia but also across the existing markets. The ability to lead change has enabled Boart Longyear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Boart Longyear 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 Boart Longyear is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Boart Longyear emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Boart Longyear has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Boart Longyear 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.
High brand equity
– Boart Longyear has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Boart Longyear to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Boart Longyear has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Oil Well Services & Equipment industry. Secondly the value chain collaborators of Boart Longyear have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Boart Longyear
– The covid-19 pandemic has put organizational resilience at the centre of everthing Boart Longyear 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 Boart Longyear in the Energy sector have low bargaining power. Boart Longyear has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Boart Longyear to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Boart Longyear comprises – understanding the underlying the factors in the Oil Well Services & Equipment 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.
Sustainable margins compare to other players in Oil Well Services & Equipment industry
– Boart Longyear has clearly differentiated products in the market place. This has enabled Boart Longyear to fetch slight price premium compare to the competitors in the Oil Well Services & Equipment industry. The sustainable margins have also helped Boart Longyear to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Boart Longyear is one of the leading players in the Oil Well Services & Equipment industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses of Boart Longyear | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Boart Longyear are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Boart Longyear is slow explore the new channels of communication. These new channels of communication can help Boart Longyear to provide better information regarding Oil Well Services & Equipment products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Boart Longyear 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.
Products dominated business model
– Even though Boart Longyear has some of the most successful models in the Oil Well Services & Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Boart Longyear 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 Boart Longyear needs to have more collaboration between its sales team and marketing team. Sales professionals in the Oil Well Services & Equipment industry have deep experience in developing customer relationships. Marketing department at Boart Longyear can leverage the sales team experience to cultivate customer relationships as Boart Longyear is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Boart Longyear, in the dynamic environment of Oil Well Services & Equipment industry it has struggled to respond to the nimble upstart competition. Boart Longyear 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, Boart Longyear 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 Oil Well Services & Equipment industry using digital technology.
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 Boart Longyear supply chain. Even after few cautionary changes, Boart Longyear is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Boart Longyear vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Boart Longyear products
– To increase the profitability and margins on the products, Boart Longyear needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Boart Longyear has a high cash cycle compare to other players in the Oil Well Services & Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Boart Longyear strategy
– From the outside it seems that the employees of Boart Longyear 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.
No frontier risks strategy
– From the 10K / annual statement of Boart Longyear, it seems that company is thinking out the frontier risks that can impact Oil Well Services & Equipment 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.
Boart Longyear Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Boart Longyear are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Boart Longyear 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 Boart Longyear to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Boart Longyear can improve the customer journey of consumers in the Oil Well Services & Equipment 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Oil Well Services & Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Boart Longyear 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. Boart Longyear 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.
Developing new processes and practices
– Boart Longyear can develop new processes and procedures in Oil Well Services & Equipment 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.
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 Boart Longyear 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.
Using analytics as competitive advantage
– Boart Longyear has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil Well Services & Equipment sector. This continuous investment in analytics has enabled Boart Longyear to build a competitive advantage using analytics. The analytics driven competitive advantage can help Boart Longyear to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Boart Longyear in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Oil Well Services & Equipment industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Boart Longyear to increase its market reach. Boart Longyear 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Boart Longyear is facing challenges because of the dominance of functional experts in the organization. Boart Longyear can utilize new technology in the field of Oil Well Services & Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Boart Longyear has opened avenues for new revenue streams for the organization in Oil Well Services & Equipment industry. This can help Boart Longyear to build a more holistic ecosystem for Boart Longyear products in the Oil Well Services & Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Boart Longyear can use these opportunities to build new business models that can help the communities that Boart Longyear operates in. Secondly it can use opportunities from government spending in Oil Well Services & Equipment sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Boart Longyear can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Oil Well Services & Equipment industry, but it has also influenced the consumer preferences. Boart Longyear can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Boart Longyear External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Boart Longyear are -
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. Boart Longyear needs to understand the core reasons impacting the Oil Well Services & Equipment industry. This will help it in building a better workplace.
Environmental challenges
– Boart Longyear 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. Boart Longyear can take advantage of this fund but it will also bring new competitors in the Oil Well Services & Equipment 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.
Easy access to finance
– Easy access to finance in Oil Well Services & Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Boart Longyear can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Boart Longyear
– 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 Boart Longyear.
Technology acceleration in Forth Industrial Revolution
– Boart Longyear has witnessed rapid integration of technology during Covid-19 in the Oil Well Services & Equipment industry. As one of the leading players in the industry, Boart Longyear needs to keep up with the evolution of technology in the Oil Well Services & Equipment 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, Boart Longyear 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 Boart Longyear prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil Well Services & Equipment industry are lowering. It can presents Boart Longyear with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil Well Services & Equipment sector.
Shortening product life cycle
– it is one of the major threat that Boart Longyear is facing in Oil Well Services & Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Boart Longyear in the Oil Well Services & Equipment sector and impact the bottomline of the organization.
Regulatory challenges
– Boart Longyear 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 Oil Well Services & Equipment industry regulations.
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 Boart Longyear.
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.
Weighted SWOT Analysis of Boart Longyear Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Boart Longyear 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 Boart Longyear 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 Boart Longyear 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 Boart Longyear 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 Boart Longyear needs to make to build a sustainable competitive advantage.