Lucapa Diamond Co Ltd (LOM) SWOT Analysis / TOWS Matrix / MBA Resources
Non-Metallic Mining
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Lucapa Diamond Co Ltd (Australia)
Based on various researches at Oak Spring University , Lucapa Diamond Co Ltd is operating in a macro-environment that has been destablized by – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Lucapa Diamond Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lucapa Diamond Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lucapa Diamond Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd can be done for the following purposes –
1. Strategic planning of Lucapa Diamond Co Ltd
2. Improving business portfolio management of Lucapa Diamond Co Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Non-Metallic Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lucapa Diamond Co Ltd
Strengths of Lucapa Diamond Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lucapa Diamond Co Ltd are -
Strong track record of project management in the Non-Metallic Mining industry
– Lucapa Diamond Co Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Non-Metallic Mining
– Lucapa Diamond Co Ltd is one of the leading players in the Non-Metallic Mining industry in Australia. Over the years it has not only transformed the business landscape in the Non-Metallic Mining industry in Australia but also across the existing markets. The ability to lead change has enabled Lucapa Diamond Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Lucapa Diamond Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lucapa Diamond Co Ltd staying ahead in the Non-Metallic Mining industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Lucapa Diamond Co Ltd is one of the leading players in the Non-Metallic Mining 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.
Sustainable margins compare to other players in Non-Metallic Mining industry
– Lucapa Diamond Co Ltd has clearly differentiated products in the market place. This has enabled Lucapa Diamond Co Ltd to fetch slight price premium compare to the competitors in the Non-Metallic Mining industry. The sustainable margins have also helped Lucapa Diamond Co Ltd to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Lucapa Diamond Co Ltd 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.
Successful track record of launching new products
– Lucapa Diamond Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lucapa Diamond Co Ltd 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.
Digital Transformation in Non-Metallic Mining industry
- digital transformation varies from industry to industry. For Lucapa Diamond Co Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lucapa Diamond Co Ltd 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.
Highly skilled collaborators
– Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Lucapa Diamond Co Ltd in the Basic Materials sector have low bargaining power. Lucapa Diamond Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lucapa Diamond Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Lucapa Diamond Co Ltd 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.
Learning organization
- Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lucapa Diamond Co Ltd emphasize – knowledge, initiative, and innovation.
Weaknesses of Lucapa Diamond Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lucapa Diamond Co Ltd are -
Slow to strategic competitive environment developments
– As Lucapa Diamond Co Ltd 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lucapa Diamond Co Ltd is slow explore the new channels of communication. These new channels of communication can help Lucapa Diamond Co Ltd to provide better information regarding Non-Metallic Mining products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Non-Metallic Mining industry, Lucapa Diamond Co Ltd 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, Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd lucrative customers.
Low market penetration in new markets
– Outside its home market of Australia, Lucapa Diamond Co Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Lucapa Diamond Co Ltd is just above the Non-Metallic 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.
Ability to respond to the competition
– As the decision making is very deliberative at Lucapa Diamond Co Ltd, in the dynamic environment of Non-Metallic Mining industry it has struggled to respond to the nimble upstart competition. Lucapa Diamond Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Lucapa Diamond Co Ltd 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.
Increasing silos among functional specialists
– The organizational structure of Lucapa Diamond Co Ltd is dominated by functional specialists. It is not different from other players in the Non-Metallic Mining industry, but Lucapa Diamond Co Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lucapa Diamond Co Ltd to focus more on services in the Non-Metallic Mining industry rather than just following the product oriented approach.
Lack of clear differentiation of Lucapa Diamond Co Ltd products
– To increase the profitability and margins on the products, Lucapa Diamond Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Lucapa Diamond Co Ltd supply chain. Even after few cautionary changes, Lucapa Diamond Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lucapa Diamond Co Ltd vulnerable to further global disruptions in South East Asia.
Lucapa Diamond Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lucapa Diamond Co Ltd are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Non-Metallic Mining industry, but it has also influenced the consumer preferences. Lucapa Diamond Co Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Lucapa Diamond Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Non-Metallic Mining sector. This continuous investment in analytics has enabled Lucapa Diamond Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lucapa Diamond Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Lucapa Diamond Co Ltd 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.
Building a culture of innovation
– managers at Lucapa Diamond Co Ltd 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.
Use of Bitcoin and other crypto currencies for transactions in Non-Metallic Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lucapa Diamond Co Ltd in the Non-Metallic Mining industry. Now Lucapa Diamond Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Lucapa Diamond Co Ltd 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, Lucapa Diamond Co Ltd can use these opportunities to build new business models that can help the communities that Lucapa Diamond Co Ltd operates in. Secondly it can use opportunities from government spending in Non-Metallic Mining sector.
Leveraging digital technologies
– Lucapa Diamond Co Ltd 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lucapa Diamond Co Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lucapa Diamond Co Ltd is facing challenges because of the dominance of functional experts in the organization. Lucapa Diamond Co Ltd 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.
Buying journey improvements
– Lucapa Diamond Co Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Lucapa Diamond Co Ltd to increase its market reach. Lucapa Diamond Co Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Lucapa Diamond Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lucapa Diamond Co Ltd are -
Increasing wage structure of Lucapa Diamond Co Ltd
– 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 Lucapa Diamond Co Ltd.
Shortening product life cycle
– it is one of the major threat that Lucapa Diamond Co Ltd is facing in Non-Metallic Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Lucapa Diamond Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Lucapa Diamond Co Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Non-Metallic Mining sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lucapa Diamond Co Ltd in Non-Metallic Mining industry. The Non-Metallic 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.
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. Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Non-Metallic Mining industry are lowering. It can presents Lucapa Diamond Co Ltd 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lucapa Diamond Co Ltd needs to understand the core reasons impacting the Non-Metallic Mining industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Lucapa Diamond Co Ltd 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd prominent markets.
Weighted SWOT Analysis of Lucapa Diamond Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd 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 Lucapa Diamond Co Ltd needs to make to build a sustainable competitive advantage.