Paramount Gold Nevada Corp. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Paramount Gold Nevada Corp. is one of the leading firms in its industry. Paramount Gold Nevada Corp. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly 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 facilitates 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 Paramount Gold Nevada Corp. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Paramount Gold Nevada Corp. swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Paramount Gold Nevada Corp. strengths, and eradicate its weaknesses.

Step by Step Guide to Paramount Gold Nevada Corp. SWOT Analysis

Strengths of Paramount Gold Nevada Corp. – Internal Strategic Factors

As one of the leading organizations in its industry, Paramount Gold Nevada Corp. has numerous strengths that help 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 Paramount Gold Nevada Corp. are –

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  • Strong Free Cash Flow – Paramount Gold Nevada Corp. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • 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.
  • Successful track record of developing new products – product innovation.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Good Returns on Capital Expenditure – Paramount Gold Nevada Corp. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong distribution network – Over the years Paramount Gold Nevada Corp. has built a reliable distribution network that can reach majority of its potential market.
  • Highly successful at Go To Market strategies for its products.
  • Highly skilled workforce through successful training and learning programs. Paramount Gold Nevada Corp. 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 Paramount Gold Nevada Corp. – Internal Strategic Factors

Weakness are the areas where Paramount Gold Nevada 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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  • 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.
  • 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 Paramount Gold Nevada Corp.
  • 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 Paramount Gold Nevada Corp. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • 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.
  • 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. Paramount Gold Nevada Corp. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Limited success outside core business – Even though Paramount Gold Nevada 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 Paramount Gold Nevada Corp. – External Strategic Factors

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  • 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 Paramount Gold Nevada Corp. to drive home its advantage in new technology and gain market share in the new product category.
  • The new technology provides an opportunity to Paramount Gold Nevada 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.
  • Government green drive also opens an opportunity for procurement of Paramount Gold Nevada Corp. products by the state as well as federal government contractors.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Paramount Gold Nevada Corp.’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 market development will lead to dilution of competitor’s advantage and enable Paramount Gold Nevada Corp. to increase its competitiveness compare to the other competitors.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Paramount Gold Nevada Corp..
  • 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.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Paramount Gold Nevada Corp. to capture new customers and increase its market share.

Threats Paramount Gold Nevada Corp. Facing - External Strategic Factors

  • 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.
  • 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.
  • Rising raw material can pose a threat to the Paramount Gold Nevada Corp. profitability.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Paramount Gold Nevada Corp.   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.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Paramount Gold Nevada Corp.

Limitations of SWOT Analysis for Paramount Gold Nevada 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 Paramount Gold Nevada 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 Paramount Gold Nevada 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 Paramount Gold Nevada 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 Paramount Gold Nevada 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)