SWOT Analysis – Goldcorp

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Strengths Weaknesses
  • Social Responsibility
  • Strong Management Team
  • Price of Gold
 

  • Vast number of employees
  • Liberating Gold
  • New Technology

 

Opportunities Threats
  • Acquisition opportunities
  • Improve reputation

 

 

  • Political risk
  • Environmental concerns
  • Price of commodities
  • Competition
  • Regulations

 

 

STRENGTHS

Social Responsibility: Goldcorp Inc. spends a significant amount of money to adhere to social responsibilities.  This includes local community development, occupational health and safety, and technological advances in order to follow guidelines supplied to them by the Environmental Protection Agency.  In a news article by PR Newswire they state that Goldcorp Inc. exhibited their social responsibility by “Contributing approximately $27 million to communities through donations, sponsorships, and infrastructure investments” (PR Newswire).  Also, Clean water and reclamation strategies are among the important responsibilities included in Goldcorp’s portfolio.  An educational video on clean water and reclamation is available at https://www.youtube.com/watch?v=4UXBTQSZjJo (Goldcorp).

Strong Management Team: Each member of the Goldcorp Management team has a significant amount of experience in mining and mine acquisition.  Among the management team is Charlene Ripley, who was awarded Canada’s Top 100 Most Powerful Women Award in the Scotiabank Corporate Executives category, as well as the BC Business Top 50 Most Influential Women Award (Middlemiss).  Ms. Ripley is Goldcorp’s Executive Vice President and General Counsel, and was recognized due to her corporate performance, commitment to the community, and leadership abilities.

Price of Gold: Gold is one of the highest valued commodities which gives Goldcorp an edge in the Mining industry.  The value of gold as of recent come in at about $1300/troy ounce.  The next highest valued commodity is platinum at around $1000/troy ounce (CNN Money).

 

WEAKNESSES

Vast number of employees: Many companies do not see this as a weakness, and I’m sure Goldcorp is one of them.  However, with over 11,000 employees across the Americas, it becomes quite difficult for upper management to ensure their mission and vision stays the same across the board.  In smaller companies with one central location, it is much easier to ensure all employees are on the same page (Evanish).

Liberating gold: Liberating gold can be very expensive.  Liberating is the act of separating the gold ore from waste/impurities.  This process can be very extensive and quite costly even with the most efficient technology.

New Technology: The mining industry is ever changing when it comes to technological advances.  Adapting and training on these new advances can take a significant amount of time which can decrease production.  Also, if the new technology they are using does not produce the results they predicted they will suffer a loss.

 

OPPORTUNITIES

Acquisition Opportunities: With the amount of money Goldcorp produces, they are able to acquire smaller mines and mine acquisition companies.  This can negate the risk of future competition coming into the market.  Cash flow will also allow them to continue making progress toward social responsibilities, employee safety programs, and technology that will improve environmental concerns.

Improve Reputation: There is always opportunity to have a better reputation in the mining industry.  They need to continually engage the community on what they are doing to improve the environment, mining conditions, and workplace safety.  Environmentalist are one of the major concerns for Goldcorp as they will make the loudest noise if there is any type of contamination in the public air, land, or water systems.  This is why it is very important to continually test the air, land, and water to ensure they are staying under the MCL’s (Maximum Contamination Limits), and let their results be known to the community (EPA).

 

THREATS

Political Risk: Although Goldcorp’s mode of operation is in areas of little political risk, it can’t be completely avoided.  Politicians throughout the America’s are constantly changing and can hinder Goldcorp’s operation.  Political risk is also a factor with countries overseas which purchase their commodity.  Trade regulations is a large and risky factor in the mining industry regardless of the commodity being purchased.

Environmental Concerns: Although Goldcorp does an excellent job maintaining their reputation as Socially Responsible, they have had numerous incidents involving environmental problems.  One major incident was with their mine in Honduras.  The operations from this mine caused a high level of arsenic and lead to drain into the drinking water (Almendarez).

Price of Commodities: Although Goldcorp is mining one of the most valuable commodities, there is no guarantee of the value.  Commodities can be very unstable and this is a definite threat for Goldcorp.  Especially in the scenario where they are spending money on acquisitions, social responsibilities, etc., and the price of gold drops significantly.

Competition: Competition from other up and coming mining companies pose a threat to Goldcorp.  First Mining Finance is one example of a gold mine acquisition company that formed in April of 2015 with a powerhouse management team.  They are already on track to acquire more than 25 projects since last April when beginning operations (Ameduri).

Regulations: Regulations and political risk can somewhat go hand in hand.  When a new politician comes into office that may be an environmentalist, regulations regarding MCL’s can change rapidly and can cause a stoppage in operation if Goldcorp does not adhere to guidelines.  Also, many of their mines in Canada are on First Nation land so contractual agreements can be renegotiated between Goldcorp and the tribe whose land they occupy.

 

References

  • Goldcorp releases 2015 sustainability report.(2016, June 27) Retrieved from http://www.prnewswire.com/news-releases/goldcorp-releases-2015-sustainability-report-584514531.html
  • Middlemiss, J.(2015, November 13) The talented Charlene Ripley thrives on leadership [News Article] Retrieved from http://business.financialpost.com/legal-post/the-talented-charlene-ripley-thrives-on-leadership
  • CNN Money. (2015, September 28) Retrieved from http://money.cnn.com/data/commodities/
  • Almendarez, J.(2011, September) GOLDCORP (ENTRE MARES) & THE GOVERNMENT OF HONDURAS HIDE INFORMATION ABOUT SYSTEMIC CONTAMINANTS IN CHILDREN AND ADULTS [Article] Retrieved from https://healthtribunal.org/resources/reports-2/
  • Goldcorp Inc. (2015, Nov 15) Water is life [Video]. Retreived from https://www.youtube.com/watch?v=4UXBTQSZjJo
  • Evanish, J.(2014) Why everything breaks when you reach 25 employees [Blog] Retrieved from https://getlighthouse.com/blog/company-growth-everything-breaks-25-employees/
  • Ameduri, D.(2016) Precious metal investor warning. Retrieved from https://www.crushthestreet.com/investright
  • EPA (2016) Mining Sector. Retrieved from https://www.epa.gov/regulatory-information-sector/mining-except-oil-and-gas-sector-naics-212

 

 

 

 

5 thoughts on “SWOT Analysis – Goldcorp

  1. This is really well done, however, you do not have your references cited in your work correctly (aka plagiarism). You will not receive points for this assignment until the references are cited appropriately

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  2. Please look up APA citations and you will see what the issues are… inserting links occasionally does not cut it. You will need to be more thorough in your citations and supporting your findings.

    Liked by 1 person

  3. Getting closer… we will work on it for the next assignment. For now, remember to cite at the end of the sentences that contain ideas or information obtained for another source. You should not be citing only at the end of paragraphs. Year and if using quotations page number need to be included in all citations; not just listed in the references.

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    1. Alright that sounds good thanks again and I will definitely be working at it in the next assignment and hopefully perfect it by then!

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