Oro verde/ green gold Case Study Solution
Problem Statement
The production process of more environmental friendly processing means challenging the conventional methods of mining would result in resistance from existing workers. Furthermore, for specialized extraction new and highly skilled workers would be needed. This means incurring huge costs on training and attracting the workers to work in mine.
On the other hand, one main problem arises due to inability to gauge the reaction of consumers as no market exists for the product. The extraction of metal and diversifying it to create a new market is full of possibilities but as with all the initial steps into the unknown it is also full of risks. This means that investment will also be uncertain and involvement of managers will be highly doubtful.
Situational Analysis
The Gold Green program focuses on creating more environmental friendly mining activities for extracting metals that would not result high distortion in the atmosphere. This innovative idea is likely to receive positive feedback on its inception given that the times are changing towards betterment of all expect of the society and environment.
The schemes’ main focus is on creating a niche market for more user friendly metal; however, the mining industry does not attract many private investors given the high level of risks involved in the mining enterprise. The scheme will also have to contend with traditional ways of mining which are ingrained in the existing culture of mining economies.
Industry Analysis- SWOT
The industry in which Oro Verde is operating is not only primary industry but also one of the highly traditional industries. Oro Verde’s focus on creating niche market can be analyzed by its:
Strengths
- The innovation behind extraction and usage of clean metal is attractive. It will naturally appeal to the people in the changing times where more focus is being put on development of highly innovative methods where positive contributions can be made.
- Usage of advance technology will lead to more efficient production process. Given that mining has been traditionally a very risky work, using improved methods and highly advanced technology in the operations will result in more production without compromising the safety of the workers.
- The countries where mining activities take place have developed relevant expertise over a period of time. Skilled labor is present in these countries where mining hastaken place since a long time, particularly where mining have been a family business where the skills are passed on over the generations.
- Sustainability factor has risen in recent times where the firm’s value is now determined by its ability to grow and contribute to the society. This factor focuses on how efficiently the company is carrying out its operations while taking view of stake of both the external and the internal stakeholders of the entity.
- Contribution to economy will increase government involvement in terms of finances and other support, especially where the economies are heavily dependent upon mining sector for major part of their GDP.
ORO VERDE GREEN GOLD Harvard Case Solution & Analysis
Weaknesses
- In overall mining industry there is a very low interest of investors. Mining industry is one of the most under-utilized and heavily exploited industries and it is primarily due to the involvement of the respective governments that these industries have survived.
- Working conditions of miners is very bad and in private employment they are exploited to the maximum. The work does not appeal to a lot of people so labor turnover is very low. Furthermore the training cost associated with this sort of work is very high. The employees have to be attracted using extensive pay packages.
- Interruptions in the business due to external factors such as political interferences or lack of capital for funding underground mining activities. These interruptions affect the business adversely leading to low development in mining sector........................
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