Century Aluminum Company SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Century Aluminum Company is one of the leading firms in its industry. Century Aluminum Company maintains its prominent 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.

Order Now - Century Aluminum Company SWOT Analysis
Check out- Century Aluminum Company PESTEL / PEST & Environment Analysis
Article continues after advertisement

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 Century Aluminum Company to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Century Aluminum Company swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Century Aluminum Company strengths, and eradicate its weaknesses.

Step by Step Guide to Century Aluminum Company SWOT Analysis

Strengths of Century Aluminum Company – Internal Strategic Factors

As one of the leading companies in its industry, Century Aluminum Company 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 Century Aluminum Company are –

Read - Century Aluminum Company Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

  • 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.
  • Superb Performance in New Markets – Century Aluminum Company 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.
  • 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.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Strong distribution network – Over the years Century Aluminum Company has built a reliable distribution network that can reach majority of its potential market.
  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – Century Aluminum Company is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Highly skilled workforce through successful training and learning programs. Century Aluminum Company 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 Century Aluminum Company – Internal Strategic Factors

Weakness are the areas where Century Aluminum Company can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

Article continues after advertisement

  • 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 Century Aluminum Company
  • The profitability ratio and Net Contribution % of Century Aluminum Company are below the industry average.
  • High attrition rate in work force – compare to other organizations in the industry Century Aluminum Company has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • 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. Century Aluminum Company has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Century Aluminum Company 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.
  • 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 Century Aluminum Company – External Strategic Factors

Article continues after advertisement

  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Century Aluminum Company an opportunity to enter a new emerging market.
  • 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 Century Aluminum Company in other product categories.
  • 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.
  • 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 Century Aluminum Company. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Century Aluminum Company to capture new customers and increase its market share.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Century Aluminum Company’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.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Century Aluminum Company.
  • The new technology provides an opportunity to Century Aluminum Company 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 Century Aluminum Company Facing - External Strategic Factors

  • Rising raw material can pose a threat to the Century Aluminum Company profitability.
  • Imitation of the counterfeit and low quality product is also a threat to Century Aluminum Company’s product especially in the emerging markets and low income markets.
  • Liability laws in different countries are different and Century Aluminum Company may be exposed to various liability claims given change in policies in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • 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.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • 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.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Century Aluminum Company

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 Century Aluminum Company
  • 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.

Article continues after advertisement

Weighted SWOT Analysis of Century Aluminum Company

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 Century Aluminum Company 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 Century Aluminum Company

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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Century Aluminum Company

Example of Weighted SWOT Analysis

You can email us to get an example document of Weighted SWOT analysis.

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)