Anglogold Ashanti Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Anglogold Ashanti Limited is one of the leading firms in its industry. Anglogold Ashanti Limited maintains its prominent 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 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 enables the managers of the Anglogold Ashanti Limited to develop four types of strategies:

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

Anglogold Ashanti Limited swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Anglogold Ashanti Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Anglogold Ashanti Limited SWOT Analysis

Strengths of Anglogold Ashanti Limited – Internal Strategic Factors

As one of the leading companies in its industry, Anglogold Ashanti Limited 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 Anglogold Ashanti Limited are –

Read - Anglogold Ashanti Limited Porter 5 Forces Analysis & Industry Analysis
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Good Returns on Capital Expenditure – Anglogold Ashanti Limited is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Superb Performance in New Markets – Anglogold Ashanti Limited 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. Anglogold Ashanti Limited 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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Successful track record of developing new products – product innovation.
Strong Free Cash Flow – Anglogold Ashanti Limited 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.
Highly successful at Go To Market strategies for its products.

Weakness of Anglogold Ashanti Limited – Internal Strategic Factors

Weakness are the areas where Anglogold Ashanti Limited can improve upon. Strategy is about making choices and weakness are the areas where a company 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.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Anglogold Ashanti Limited 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.
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 Anglogold Ashanti Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Investment in Research and Development is below the fastest growing players in the industry. Even though Anglogold Ashanti Limited 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.
High attrition rate in work force – compare to other organizations in the industry Anglogold Ashanti Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for Anglogold Ashanti Limited – External Strategic Factors

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Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Anglogold Ashanti Limited an opportunity to enter a new emerging market.
The new technology provides an opportunity to Anglogold Ashanti Limited 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.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Anglogold Ashanti Limited.
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 market development will lead to dilution of competitor’s advantage and enable Anglogold Ashanti Limited to increase its competitiveness compare to the other competitors.
New trends in the consumer behavior can open up new market for the Anglogold Ashanti Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Government green drive also opens an opportunity for procurement of Anglogold Ashanti Limited products by the state as well as federal government contractors.
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 Anglogold Ashanti Limited. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats Anglogold Ashanti Limited Facing - External Strategic Factors

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.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Anglogold Ashanti Limited
Rising raw material can pose a threat to the Anglogold Ashanti Limited profitability.
Imitation of the counterfeit and low quality product is also a threat to Anglogold Ashanti Limited’s product especially in the emerging markets and low income markets.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Anglogold Ashanti Limited

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 Anglogold Ashanti Limited
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 Anglogold Ashanti Limited

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 Anglogold Ashanti Limited 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 Anglogold Ashanti Limited

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)