SWOT Analysis / TOWS Matrix for Whitehaven Coal (Australia)
Based on various researches at Oak Spring University , Whitehaven Coal is operating in a macro-environment that has been destablized by – increasing commodity prices, there is backlash against globalization, central banks are concerned over increasing inflation, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Whitehaven Coal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Whitehaven Coal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Whitehaven Coal 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 Whitehaven Coal can be done for the following purposes –
1. Strategic planning of Whitehaven Coal
2. Improving business portfolio management of Whitehaven Coal
3. Assessing feasibility of the new initiative in Australia
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Whitehaven Coal
Strengths of Whitehaven Coal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Whitehaven Coal are -
Learning organization
- Whitehaven Coal 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 Whitehaven Coal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Whitehaven Coal emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Coal industry
– Whitehaven Coal has clearly differentiated products in the market place. This has enabled Whitehaven Coal to fetch slight price premium compare to the competitors in the Coal industry. The sustainable margins have also helped Whitehaven Coal to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Whitehaven Coal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Whitehaven Coal 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.
Innovation driven organization
– Whitehaven Coal is one of the most innovative firm in Coal sector.
High switching costs
– The high switching costs that Whitehaven Coal 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.
High brand equity
– Whitehaven Coal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Whitehaven Coal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Whitehaven Coal in the Energy sector have low bargaining power. Whitehaven Coal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Whitehaven Coal to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Whitehaven Coal is present in almost all the verticals within the Coal industry. This has provided Whitehaven Coal 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.
Ability to recruit top talent
– Whitehaven Coal is one of the leading players in the Coal 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.
Training and development
– Whitehaven Coal 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 Coal
– Whitehaven Coal is one of the leading players in the Coal industry in Australia. Over the years it has not only transformed the business landscape in the Coal industry in Australia but also across the existing markets. The ability to lead change has enabled Whitehaven Coal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Whitehaven Coal 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.
Weaknesses of Whitehaven Coal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Whitehaven Coal are -
Slow to strategic competitive environment developments
– As Whitehaven Coal is one of the leading players in the Coal industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Coal industry in last five years.
Products dominated business model
– Even though Whitehaven Coal has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Whitehaven Coal should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Whitehaven Coal has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the Coal industry, Whitehaven Coal 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 Whitehaven Coal is just above the Coal 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.
Capital Spending Reduction
– Even during the low interest decade, Whitehaven Coal 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 Coal industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Whitehaven Coal is slow explore the new channels of communication. These new channels of communication can help Whitehaven Coal to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Whitehaven Coal needs to have more collaboration between its sales team and marketing team. Sales professionals in the Coal industry have deep experience in developing customer relationships. Marketing department at Whitehaven Coal can leverage the sales team experience to cultivate customer relationships as Whitehaven Coal is planning to shift buying processes online.
Lack of clear differentiation of Whitehaven Coal products
– To increase the profitability and margins on the products, Whitehaven Coal needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Whitehaven Coal 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.
Low market penetration in new markets
– Outside its home market of Australia, Whitehaven Coal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Whitehaven Coal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Whitehaven Coal are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Whitehaven Coal 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 Whitehaven Coal to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Whitehaven Coal can develop new processes and procedures in Coal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Whitehaven Coal can use these opportunities to build new business models that can help the communities that Whitehaven Coal operates in. Secondly it can use opportunities from government spending in Coal sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Whitehaven Coal is facing challenges because of the dominance of functional experts in the organization. Whitehaven Coal can utilize new technology in the field of Coal industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Whitehaven Coal to increase its market reach. Whitehaven Coal 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.
Using analytics as competitive advantage
– Whitehaven Coal has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled Whitehaven Coal to build a competitive advantage using analytics. The analytics driven competitive advantage can help Whitehaven Coal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Whitehaven Coal can improve the customer journey of consumers in the Coal 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.
Creating value in data economy
– The success of analytics program of Whitehaven Coal has opened avenues for new revenue streams for the organization in Coal industry. This can help Whitehaven Coal to build a more holistic ecosystem for Whitehaven Coal products in the Coal 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 Coal industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Whitehaven Coal in the Coal industry. Now Whitehaven Coal can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Whitehaven Coal 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. Whitehaven Coal 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.
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. Whitehaven Coal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Whitehaven Coal 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.
Building a culture of innovation
– managers at Whitehaven Coal 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 Coal industry.
Threats Whitehaven Coal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Whitehaven Coal are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Whitehaven Coal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
High dependence on third party suppliers
– Whitehaven Coal 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.
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. Whitehaven Coal 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Whitehaven Coal in Coal industry. The Coal 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.
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 Whitehaven Coal business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Whitehaven Coal 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 Coal industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Whitehaven Coal 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 Whitehaven Coal prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Whitehaven Coal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
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 Whitehaven Coal in the Coal sector and impact the bottomline of the organization.
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 Whitehaven Coal.
Consumer confidence and its impact on Whitehaven Coal 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 Coal industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Whitehaven Coal is facing in Coal sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Whitehaven Coal Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal needs to make to build a sustainable competitive advantage.