First Majestic Silver Corp. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by First Majestic Silver Corp. managers to do a situational analysis of the organization . It is an important technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) First Majestic Silver Corp. is facing in its current business environment.

The First Majestic Silver Corp. is one of the leading companies in its industry. First Majestic Silver Corp. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the First Majestic Silver Corp. to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect First Majestic Silver Corp. strengths, and eradicate its weaknesses.

Step by Step Guide to First Majestic Silver Corp. SWOT Analysis

Strengths of First Majestic Silver Corp. – Internal Strategic Factors

As one of the leading firms in its industry, First Majestic Silver Corp. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of First Majestic Silver Corp. are –

Read - First Majestic Silver Corp. Porter 5 Forces Analysis & Industry Analysis
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• Strong distribution network – Over the years First Majestic Silver Corp. has built a reliable distribution network that can reach majority of its potential market.
• Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
• Highly successful at Go To Market strategies for its products.
• Strong Brand Portfolio – Over the years First Majestic Silver Corp. has invested in building a strong brand portfolio. The SWOT analysis of First Majestic Silver Corp. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Good Returns on Capital Expenditure – First Majestic Silver Corp. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Free Cash Flow – First Majestic Silver Corp. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Successful track record of developing new products – product innovation.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

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Weakness of First Majestic Silver Corp. – Internal Strategic Factors

Weakness are the areas where First Majestic Silver Corp. can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• The profitability ratio and Net Contribution % of First Majestic Silver Corp. are below the industry average.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though First Majestic Silver Corp. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that First Majestic Silver Corp. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. First Majestic Silver Corp. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, First Majestic Silver Corp. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
• Investment in Research and Development is below the fastest growing players in the industry. Even though First Majestic Silver Corp. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• Limited success outside core business – Even though First Majestic Silver Corp. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for First Majestic Silver Corp. – External Strategic Factors

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• Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for First Majestic Silver Corp. in other product categories.
• New trends in the consumer behavior can open up new market for the First Majestic Silver Corp. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for First Majestic Silver Corp. to drive home its advantage in new technology and gain market share in the new product category.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for First Majestic Silver Corp. to capture new customers and increase its market share.
• The market development will lead to dilution of competitor’s advantage and enable First Majestic Silver Corp. to increase its competitiveness compare to the other competitors.
• New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for First Majestic Silver Corp.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
• The new technology provides an opportunity to First Majestic Silver Corp. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

Threats First Majestic Silver Corp. Facing - External Strategic Factors

• Rising raw material can pose a threat to the First Majestic Silver Corp. profitability.
• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of First Majestic Silver Corp.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for First Majestic Silver Corp.   in those markets.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for First Majestic Silver Corp.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of First Majestic Silver Corp.
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of First Majestic Silver Corp.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis First Majestic Silver Corp. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of First Majestic Silver Corp.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)