Nevsun Resources Ltd. SWOT Analysis / Matrix

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

The Nevsun Resources Ltd. is one of the leading firms in its industry. Nevsun 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 firm 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 known as SWOT Matrix.

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

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

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Nevsun Resources Ltd. strengths, and eradicate its weaknesses.

Step by Step Guide to Nevsun Resources Ltd. SWOT Analysis

Strengths of Nevsun Resources Ltd. – Internal Strategic Factors

As one of the leading organizations in its industry, Nevsun 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 Nevsun 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.
  • Strong Free Cash Flow – Nevsun 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.
  • Highly successful at Go To Market strategies for its products.
  • Automation of activities brought consistency of quality to Nevsun Resources Ltd. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Nevsun Resources Ltd. has invested in building a strong brand portfolio. The SWOT analysis of Nevsun Resources Ltd. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Superb Performance in New Markets – Nevsun Resources Ltd. has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Highly skilled workforce through successful training and learning programs. Nevsun 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.

Weakness of Nevsun Resources Ltd. – Internal Strategic Factors

Weakness are the areas where Nevsun 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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  • Investment in Research and Development is below the fastest growing players in the industry. Even though Nevsun Resources Ltd. 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.
  • The profitability ratio and Net Contribution % of Nevsun Resources Ltd. are below the industry average.
  • Limited success outside core business – Even though Nevsun Resources Ltd. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Nevsun Resources Ltd.
  • 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. Nevsun Resources Ltd. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • High attrition rate in work force – compare to other organizations in the industry Nevsun 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.
  • 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.

Opportunities for Nevsun 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 Nevsun Resources Ltd..
  • 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 Nevsun Resources Ltd. in other product categories.
  • New trends in the consumer behavior can open up new market for the Nevsun Resources Ltd. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The new technology provides an opportunity to Nevsun 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.
  • The market development will lead to dilution of competitor’s advantage and enable Nevsun Resources Ltd. to increase its competitiveness compare to the other competitors.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Nevsun Resources Ltd. an opportunity to enter a new emerging market.
  • 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.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Nevsun 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.

Threats Nevsun Resources Ltd. Facing - External Strategic Factors

  • 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.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • 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.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Imitation of the counterfeit and low quality product is also a threat to Nevsun Resources Ltd.’s product especially in the emerging markets and low income markets.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Rising raw material can pose a threat to the Nevsun Resources Ltd. profitability.

Limitations of SWOT Analysis for Nevsun 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 Nevsun 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 Nevsun 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 Nevsun 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 Nevsun 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)