Golden Star Resources Ltd. SWOT Analysis / Matrix

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

The Golden Star Resources Ltd. is one of the leading organizatations in its industry. Golden Star Resources Ltd. maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Golden Star Resources Ltd. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Golden Star Resources Ltd. swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Golden Star Resources Ltd. strengths, and eradicate its weaknesses.

Step by Step Guide to Golden Star Resources Ltd. SWOT Analysis

Strengths of Golden Star Resources Ltd. – Internal Strategic Factors

As one of the leading companies in its industry, Golden Star Resources Ltd. 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 Golden Star Resources Ltd. are –

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  • 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 skilled workforce through successful training and learning programs. Golden Star Resources Ltd. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Good Returns on Capital Expenditure – Golden Star Resources Ltd. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Strong Brand Portfolio – Over the years Golden Star Resources Ltd. has invested in building a strong brand portfolio. The SWOT analysis of Golden Star Resources Ltd. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Successful track record of developing new products – product innovation.
  • Strong Free Cash Flow – Golden Star Resources Ltd. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Weakness of Golden Star Resources Ltd. – Internal Strategic Factors

Weakness are the areas where Golden Star Resources Ltd. 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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  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • 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 Golden Star Resources Ltd. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • High attrition rate in work force – compare to other organizations in the industry Golden Star Resources Ltd. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • The profitability ratio and Net Contribution % of Golden Star Resources Ltd. are below the industry average.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Golden Star Resources Ltd. 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.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.

Opportunities for Golden Star Resources Ltd. – External Strategic Factors

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  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Golden Star Resources Ltd..
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Golden Star Resources Ltd. to capture new customers and increase its market share.
  • 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 Golden Star Resources Ltd.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • 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 Golden Star Resources Ltd. to drive home its advantage in new technology and gain market share in the new product category.
  • New trends in the consumer behavior can open up new market for the Golden Star Resources Ltd. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Golden Star Resources Ltd. to increase its profitability.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Golden Star Resources Ltd.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • The new technology provides an opportunity to Golden Star Resources Ltd. 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 Golden Star Resources Ltd. Facing - External Strategic Factors

  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Golden Star Resources Ltd.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Golden Star Resources Ltd.   in those markets.
  • Rising raw material can pose a threat to the Golden Star Resources Ltd. 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.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • Liability laws in different countries are different and Golden Star Resources Ltd. may be exposed to various liability claims given change in policies in those markets.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.

Limitations of SWOT Analysis for Golden Star Resources Ltd.

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 Golden Star Resources Ltd.
  • 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 Golden Star Resources Ltd.

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 Golden Star Resources Ltd. 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 Golden Star Resources Ltd.

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)