Background Of The Midwest Copper Mining During Volatile Times
Define the Problems
Based on the case of Midwest Copper Mining during volatile Times, Midwest Copper Mining (MCM) is a well-known copper production company that is found in Northeastern Minnesota in the area of Koppersteadt, which is German for the copper city. (Midwest Copper Mining, 2016). In the past couple of years, the company has been able to set itself apart from the rest of the world greatest producers of copper.
They have utilized some strategies to do this including:
- Providing low-price offers to co-location customers
- Recruiting only the best talents from across the state institutions and thus maintaining the quality of their produce
- Developing in-house novel ideas on how to mine and process the copper to the most exceptional quality
- Mentoring new staff members in a six-month program that ensures they have learned how to produce the best results with much consistency
- Having a programmer that provides there is minim pollution all across the production chain
The local town was founded on the bias of being a copper-mining town and by this, it was able to grow and develop. Most of the town members directly or indirectly depend upon the company for their daily living. The company is very much involved in fostering a sense of community and integration in the local area, by running of various intra-community activates charities and awards. The heritage of the town overlaps with that of the mining company as they influence each other. The company has been able to make tremendous strides in meeting the needs and wants of their customers, but CEO Charles Swanson is still concerned with the growth of the company.
The demand for copper across the world has been growing in the last couple of years. Much of the copper is head to China who are stockpiling even as they improve and scale their manufacturing industries. Many of the companies involved in the sector are therefore doing all that they can to ensure that they gain as much of the market as they can. Governments like Zambia are busy reducing the taxes imposed on the exportation of copper, which is a primary mineral in the region. Other companies are opting to undercut the prices n.d thus attract manufacturing companies from China, whose demand from the metal rose by 9% last year (Wall Street Journal, 2014). The copper-belt in Zambia is one of the largest copper deposit in the world and spite many of the com [ponies involved there being quite profitable they are upping the ante, by taking advantage of the reduced taxes and thus placing competitive prices in the market. This would, in turn, lockout smaller players like MCM (Midwest Copper Mining, 2016). The sudden upsurge in competition has caused the sector to become highly combative and thus many oft eh companies are seeking alternate ways to remain afloat.
There is also trouble in the availability of sufficient mineral ores in Northern Minnesota. The difficulty that affects all those connected with the company is an excellent impediment towards its expansion. If the company were to choose to expand and start producing more copper rapidly, they would exhaust the mine in a concise period. They, therefore, need an alternative ore from which to do their mining. If this is not done as soon as possible, the company stand losing a number of their clientele particularly those who are co-located with them. These are companies like 3M, Medtronic, and St. Jude. If they decide to move and establish a new facility the same may happen depending on how they handle the transitions.
The staff members may also become dissatisfied considering the uncertainty and insecurity of the jobs. They would worry that movement or expansion to a new center that is a far off, would cause some of them to be displaced from their families or even relieved of their duties and only source of livelihood. The enormous expense of such a move is also a difficulty that the company has to keep in mind before choosing the option to take.
Political: Considering the position on the company there is a great need to cooperate with the state and the federal government. However, being that it has been running for a while now, it certainly has all the necessary documents and licenses for the processing and sale of copper. The bilateral trade talks between the US and China, but a way can be sought to find new customers in the market and reach out to them may hamper the expansion into the growing demand in China.
Economic: The Company has an excellent opportunity for growth economic. It is still an excellent hazard for its growth. Thus, the company will have to maneuver the playfield aright if it is to be able to grow and develop with the rest of the world. The opportunities presented have to be well analyzed and tapped.
Social: The Company is of significant influence in the culture of the local town of Koppersteadt. There is a need to maintain this as many of their counters and employees live around there. These will be of significant influence on how the company grows and develops.
Technological: The Company has proven to be a step ahead in tapping into the opportunities that technology offers for the mining industry. By attracting the most exceptional talents from all across the state, the company has set itself as a powerhouse in terms of innovation. They have to maintain the lead in patents and intellectual property in their area if they are to grow, as they ought.
Environmental: The Company has also been of significant influence in its environment. Many of the mining companies across the world are known to spoil the ecosystem around them, but MCM is different. They have managed to maintain cleanliness of the water they consume in the local town. This has to be replicated wherever they are expanding.
Legal: There are no legal difficulties highlighted in the case study. The company seems to be doing everything above board.
Five Forces Analysis
The mining industry is unique in its challenges and difficulties. Threats of new entries: It is quite difficult for new entrants to get into the business because of the knowledge needed in the sector, the capital investment and the availability of the mineral ore. Not just any company or individual can decide to come into the area and start his own company. There are a lot of difficulties and hindrances all along the way
The threat of substitution: Copper is applied in some industries mainly electrical power and electronics production. Substituting it with an alternate element is quite tricky and cannot be quickly done. Synthetic copper is not readily available, and thus many companies still opt to stockpile and use the mined ore.
Bargaining power of suppliers: Many of the suppliers in the industry have high bargaining power. However, keeping in mind that MCM is co-located with its consumers and suppliers, they can be able to easily negotiate and agree upon the desired price for certain commodities. This will not be easy to achieve, but it can be done.
Bargaining powers of consumers: The consumers have lesser bargaining power. Nevertheless, being that they are co-located and offer a significant advantage to the company, they can be able to negotiate together with MCM and the suppliers and agree on the right pricing for the products.
Competitive rivalry: This is the core challenge faced by MCM. Many of the international corporations involved in copper mining are backed either by whole nations or by large multinational players. Thus, the company is competing with some big dogs. For some time, the company had found a way to maneuver their way and maintain profitability. However, the company now needs to grow and serve a broader market to satisfy the growing demand.
The CEO has been required to do all he can to amend the situation. If he were to choose, to increase the prices to remain profitable, the solution would prove to be a temporary respite. There is a need for a more permanent solution, and otherwise, according to the estimated forecast, the company may go on a spiral in less than four years.
Some solutions can be proposed to solve their problems and wade through them.
First, the company needs to expand to satisfy the growing demand. The can grow their production by finding newer deposits of the mineral ore in areas close by where they can build new facilities. The company needs to find a place where the gains of the mineral deposit will outweigh the expenses and thus make business sense. The expansion would be difficult but if handled well, can prove to be a great success. It can be lifeline the company needs. This would be quite costly initially, but the investment will certainly pay off since many forecasts show that the demand for copper is only bound to keep increasing with time.
The company could also seek for external suppliers who could sell the unprocessed ore to them at a reasonable price. There are some places where the ore deposits are found, but due to lack of the necessary facilities, the companies are not able to process the mineral ore and sell quality copper. MCM should seek for such firms, collaborate with them to prepare, resell the finished product, and thus meet the brewing demand. This would mean working with companies from all across the world. It would serve as good exposure for MCM. MCM will need to build up their employees and most talented customers while ensuring that they develop more talents through their mentorships program. The expansion has to be run and done by the employees instead of bringing in new players.
For the sake of the social intricacies and eyes that have been made in Koppersteadt, MCM should consider keeping the facilities there open for a more extended period. They should not just close down and leave. They should find means to perpetuate the life of the mine and thus be able to support the people left there while preparing them in case the ore runs out. The company has been an integral part of the community and thus should feel obliged to serve them still. Not only is this the ethical things to do, but it would also serve as a precedent for other companies that work in the sector. Through this, they will be able to martin their environmental program and retain a number of the staff to work longer with them.
Evaluation of Potential Solutions
Expansion by seeking for a new minefield is undoubtedly the best solution to MCM’s challenges. The original deposit ought to be able to satisfy the demand. As much as this will be difficult, the answer is undoubtedly tenable and useful. The expansion will allow the company to grow rather than shrink with the growing competitions. Their sound quality of production and great strategy in management will be enhanced and grown to affect more people. The culture and ethics seen in Koppersteadt will also be spread to other towns all across the US and thus improve society as a whole. The firm may be forced to raise their prices slightly, but with the right enticements, they should be able to convince someof other firms to co-locate with them and thus lower the costs of production.
Keeping Koppersteadt open, will undoubtedly be to the gain of the company. MCM had grown based on the spreading of its culture to all the people around them. Based on the great talent they attract the novelty of ideas in the sector and the good culture within the company encourages many to come and work for them.
Quickly closing down Koppersteadt by exhausting the mine will certainly force MCM to relocate and it will thus move with only a few employees. “Forty percent of the population of Koppersteadt works directly for MCM, twenty percent work for the businesses that supply equipment to MCM or for the customers of MCM, twenty percent work for non-mining businesses (grocery stores, hardware stores, etc.), and twenty percent work for the local hospital or schools.” years (Midwest Copper Mining, 2016).
MCM will need to build up their employees and most talented customers while ensuring that they develop more talents through their mentorships program. The expansion has to be run and done by the employees instead of bringing in new players.
After looking at the whole case study, I have some suggestions for MCM. First, MCM needs to put all the efforts towards maintaining and developing the quality of their product. This will allow them to offer the best to their customers and all of those who have stuck with them throughout. The company also needs to maintain and develop their environment project further.
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