Rwanda's Cement Industry SWOT Analysis

The provided content is a collection of sources on SWOT analysis and its applications in various fields, including business and management studies. The sources include books, journals, and online articles that provide insights into the strengths, weaknesses, opportunities, and threats (SWOT) analysis framework. Additionally, there are references to Rwanda country profile and state of environment report, which could be used as a case study for analyzing the application of SWOT analysis in a real-world setting.

BUSINESS ENVIRONMENT

Table of Contents
EXECUTIVE SUMMARY........................................................................................................1
INTRODUCTION......................................................................................................................2
TASK 1......................................................................................................................................2
1.1 Define Organization and explain the importance of organizational structure..................2
1.2 Explain the different types of organizational structure....................................................2
1.3 Type of Structure likely applicable to Tuffstuff Ltd. and the reason justifying it............3
TASK 2......................................................................................................................................4
2.1 Defining the importance of analytical tool.......................................................................4
2.2 Different types of analytical tools and their uses.............................................................4
2.3 Describe in brief about PEST analysis.............................................................................4
2.4 Various uses and limitations of PEST analysis................................................................5
2.5 Discuss about the alternative tool for market analysis.....................................................6
TASK 3......................................................................................................................................7
3.1 Current political, economic and social situation of Rwanda............................................7
3.2 PEST analysis of Tuffstuff...............................................................................................8
3.3 What is SWOT Analysis..................................................................................................8
3.4 SWOT Analysis of Tuffstuff............................................................................................9
CONCLUSION AND RECOMMENDATIONS.......................................................................9
REFERENCES.........................................................................................................................11

EXECUTIVE SUMMARY
Business environment comprises macro and micro factors that can influence the
functioning of business in any particular region. The business firms before expanding its
operations into new region, firstly require to undertake analysis of market and business
strengths and weaknesses to carry out business activities in proposed area. These analysis
support the business manager is deciding about strategies to employ for performing in varied
places. In the below paper PEST and SWOT analysis of Tuffstuff has been done to determine
favourableness of macro factors and business capabilities to expand business in specific
region of Africa, i.e. Rwanda. The following analysis is depicting that economy of Rwanda is
growing and government is also supporting different industries to operate their business in
the region. Hence, it would be beneficial or productive for the organisation to expand its
undertakings into the Rwanda.
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INTRODUCTION
The business environment carries its vital value in the business management. It
encompasses many aspects & factors that shapes the business segment and affect the market
situations. In this context, the report below explains the importance of various organisational
structures in a business and the applicability of particular structure Tuffstuff Ltd. is following
to execute its long term operations in order to accomplish their goals. Moreover, the better
picture of the analytical tools is also detailed, especially about the PEST analysis. It explains
how the research through these tools can be conducted to meet the future challenges and
carve out the new opportunities in the market.
TASK 1
1.1 Define Organization and explain the importance of organizational structure
Organisation is referred to the process of identifying and combining the work to be
performed, defining and allotting responsibility and authority, and establishing relationship &
connections for the purpose of facilitating people to work most effectively in accomplishing
goals and objectives. In executing the organising function, the manager defines,
departmentalizes & assigns so that the task can be most successfully completed. Organisation
is wholly and solely concerned with the building, developing and maintaining of a structure
of healthy working relationship in order to achieve the organisational objectives (Blum,
2002).
Organisational structure is the designed framework within which the assorted efforts
are coordinated and interrelated. Organisational structure is the way in which employees are
organised within a business and are interlinked to execute various operations.
1.2 Explain the different types of organizational structure
The structure should help in fulfilling the organisational aims and make the best use of
natural and man-made resources. The main types of business structure are:
The main types of business structure are:
 Hierarchical (tall) structure: It is a system in which people or things are positioned in a
series of levels with respect to their different importance or status or authority in an
organisation. Hierarchal organisational structure describes the reporting levels and the
position held by the people in the structure. The hierarchy structure is like a pyramid-
shape. At the top level lies one person with few people reporting to them. Similarly those
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reporting to the top level have others reporting under them, likewise the number of people
at each level increases as you move down the line (Harper, 2015). Flat or horizontal structures: Removing the levels of hierarchy creates a flatter or
horizontal organisational structure. Here, there is one person at the top who everyone
reports to. The various advantages of flat structures are:
 Staff involvement where they feel more responsibilities can be allotted.
 Sound communication.
 Enhanced team spirit.
 Less bureaucracy and prompt decision making.
 Low costs.
 Group Discussions that result in effective results
Apart from these merits, still flat structures are confined only to small companies. Since
it follows one man army, so sometimes it may result in dominance and more like a
kingdom where nothing is hidden (Aldrich, 2008).
 Matrix structures: Where working staff may be reporting to multiple managers, then this
is better known as matrix management. It draws on employees from various disciplines
such as HR, marketing, etc. without changing their roles. Skills and information flow in a
horizontal direction so this type of management is used to coordinate large projects or
development processes (Foong, 2007).
 Divisional: In this structure, company categorise on departmental basis like function,
project, product and geographic territory.
1.3 Type of Structure likely applicable to Tuffstuff Ltd. and the reason justifying it
A matrix structure would be best suitable for Tuffstuff Ltd. innovative and
entrepreneurial culture. It possess a team-driven, matrix structure that creates a highly
enthused and empowered workforce where everyone having access to advice and coaching in
different teams. Employees have the right to question & give feedbacks and can ask for
improvements in their particular groups.
Tuffstuff structure and culture promotes creativity, flexibility and willingness of risk
taking element with a long-term vision in mind. The workers are always ready to cope up
with the dynamic challenges of the technological advanced industry (Mistri, 2013).
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TASK 2
2.1 Defining the importance of analytical tool
An analytical tool is something that is used to analyse or "take a closer look at"
something. It is generally a method to review the effectiveness of something. This process
recommends solutions that facilitates in accomplishment of business goals & objectives.
2.2 Different types of analytical tools and their uses
There are many tools that are commonly used by Business Analysts. Depending on the
nature & field of business, you can use one of these tools. Analysts often undertake SWOT,
PEST, Heptalysis and MOST as their research tool before decision making process and
policy formulation for business. Some of the other tools include Bono’s Six Thinking Hats,
Five Whys, CATWOE, SCRS, MoSCoW, and VPEC-T (Bowditch, Buono and Stewart,
2007).
The market analysis is referred to as a documented investigation of a market employed
to inform an organisations’ planning activities, mainly around decisions of inventory,
purchase, production, facility & amenities expansion, purchases of capital equipment, work
force expansion/contraction, promotional activities, and many other aspects of a company.
The main uses of analytical tools are:
 To offer you an all-round view of the environment in which the firm operates & the
threats accompanying it.
 Helps better tackling of projects and anticipation of problems.
 Facilitates study of competitor strategic planning methods.
 Assist in understanding of a better market picture and accordingly take decisions
(Miller, 2007).
2.3 Describe in brief about PEST analysis
PEST Analysis is an easy and widely used tool that helps in analysing the Political,
Economic, Socio-Cultural, and Technological changes & modifications in your business
environment. This facilitates you to understand the "big picture" forces of change that one is
exposed to, and draw advantage of the opportunities that they present. Also it is a concept in
marketing principles to track the environment prior to launch of a new product/project/service
etc. It is very critical for one to understand the complete depth of each of the letters of the
PEST It is explained as below:
 Political: These factors settle on the extent to which a government may affect the
economy or a certain industry. For instance, a government may impose new taxes or
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duties that may alter entire revenue generating structures of organizations. Political
factors include tax policies, trade tariffs, Fiscal policy, etc. government may levy and
which may affect the business environment greatly (Ansoms and McKay, 2010).
 Economic: Determinants of an economy’s performance that directly impacts a
company are the economic factors to consider. For example, a rise in the inflation rate
will directly affect the pricing policy of a company in an economy. Also it will have
an impact on the purchasing power of consumers and changes in demand supply
pattern. Economic factors include interest rates, inflation rate, foreign exchange rates,
economic growth patterns etc. It also accounts for the FDI (foreign direct investment)
relevant to the certain industries doing this analysis.
 Social: These factors inspect the social environment of the market, and gauge
determinants like demographics, cultural trends, population analytics etc. An example
is purchasing trends in US during the Holiday season (Elder, Zerriffi and Le Billon,
2013).
 Technological: These factors pertain to innovations & advancements in technology
that may affect the business operations in the industry and the market. This refers to
automation, research and development & the percent of technological awareness that
a market enjoys.
2.4 Various uses and limitations of PEST analysis
PEST Analysis is useful for four major reasons:
 It helps you to figure out the business or personal opportunities, and it gives you
advanced warning of major threats.
 It reveals the direction of change that helps you shape up accordingly about the do’s
& don’ts within your business environment.
 It assist you in avoid commencing projects that are more likely to fail, for unavoidable
reasons.
 It can help you escape the unconscious assumptions when you’re a new comer in a
country, market, or; region, because it assist in drawing a picture of points at glance of
the new environment (Zheng, Yang and McLean, 2010).
Apart from the uses, PEST analysis has limitations too. Underlining is the various limitations:
 The external factors that are taken into consideration during PEST analysis are subject
to change at a very high pace. Sometimes, these changes may occur more frequently
making it tricky to understand their effect on the future of the project. Uncertainty in
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the environment may hamper the process of the project even after PEST analysis. This
adds to the limitation of PEST analysis working
 Its easy presentation is also a limitation. Since the procedure to present the list of
factors affecting the project is very simple so it creates doubts in mind about the other
factors influencing it. Unless the attributing factors are critically scrutinized in terms
of the degree of impact, the findings of the PEST analysis don’t carry much value
(Chen and Huang, 2007).
 Collecting enormous amounts of pertinent data from the correct sources becomes a bit
of a problem, mainly when most of the relevant data must be collected from external
sources. This makes PEST analysis time consuming and expensive as well. So to be
updated with the latest data becomes a challenge.
 The lack of easy availability of the refreshed data, as aforementioned, leads to one
more issue – making too many assumptions. An analysis based on groundless
assumptions can result in planning disasters. So, it’s significant to device some
process to cross-verify whether the factors stated in the PEST analysis are not merely
result of tenuous assumptions (Peng and Nunes, 2007).
2.5 Discuss about the alternative tool for market analysis
Another alternative tool that can be employed for carrying a critical market research for a
business is SWOT Analysis under the category of Situation Analysis.
This is the analysis of all the factors affecting your business. Numerous methods are involved
in this analysis, the most common one being SWOT. It basically evaluates a company’s
strengths, opportunities, weaknesses, and threats. SWOT analysis is briefly discussed below:
 Strengths: The competitive benefits you have in the marketplace (e.g. customer
assistance, better access to raw materials).
 Weakness: All things that can shift your market share in the hands of competitors.
 Opportunities: Unfamiliar market trends & untapped market niches that can turn into
next best opportunities (Panicker, Chattopadhaya and Yao, 2006).
 Threats: Political, technological, climatic, and external factors that can create a
problem for your business and hinder your long term goals.
The reason behind businesses conducting SWOT analysis being the easy access of knowledge
about the overall environment in which they are operating so as to better tackle the projects
and foresee problems. As clearly stated, the last two components of SWOT are basically
geared towards external market conditions and make decisions accordingly (Thomas, 2007).
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TASK 3
3.1 Current political, economic and social situation of Rwanda
The social, political and economic situation of Rwanda is greatly influenced by early 1990s
civil war and 1994 genocide as well as the nation continues to deal with its affects. Whether
considering the land ownership issues, demographic trends or reform of penal-code, the
devastation background and horror impinges on the all concerned consciousness. Even after
the 13 years of genocide, there is a silent assumption often underlying the nation’s future
discussions to effect that the Rwanda cannot be taken as an ordinary place.
Political situation – Since 2003 parliamentary and presidential elections, Rwanda is
following multiparty system. The country has gone through several positive developments in
spite of its turbulent history. For instance, females have entered the administrative and
political institutions of Rwanda in an impressive percentages. Now, they occupy half seats in
the National Assembly and new government is occupied on one third portfolios. Moreover
for GoR and its partners, the regional stability and peace is a main issue to consider (Rwanda
country profile, 2016).
Economic situation – The economy of Rwanda is agrarian. Almost 80 percent of country’s
population is employed by agriculture accounting for 40% and more contribution to GDP and
70% and more addition to exports. The service industry of nation adds around 39% of GDP
and roughly employs 6.5% of salaried population. Moreover, the industrial sector contributes
20% to GDP and engaged less than 2% of working populace. The economic growth of
Rwanda was rapid after the genocide, mainly because of identified economic strategy, the
“catch-up” effect and reasonably high aid movements. Also, in recent year, the growth of the
economy has been very modest. In spite of an increase in exports of goods within last two
years, the country struggles by a chronic deficit of trade (Shah, 2006).
Social situation – The 1994 genocide legacy and armed conflict that followed it remain to
heavily weigh on economic and social recovery of the nation. Such events impoverished
Rwanda and enhanced its vulnerability, specifically among the orphans and widows of the
genocide, resettled internally displaced persons, resettled internally displaced persons and the
families suspect for crimes related to genocide (Rwanda State of Environment and Outlook
Report, 2009). Such issues, combined with more rural populace densities plus small sizes of
farm, have left many communities of Rwanda unable to offer proper for their most vulnerable
and poorest groups. The recent findings on prevalence of HIV/AIDS are from demographic
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of Rwanda. Moreover, from past years, malaria has become a leading reason of mortality and
morbidity in the country with roughly more than one million malaria cases reported in last
five years. The nation’s government considers education very important to attain sustainable
development and growth of economy. Also, the government in its PRSP (Poverty Reduction
Strategy Paper) puts basic education as first priority for all. The 2020 vision statement of
Rwanda calls for widespread literacy of adults (World Report 2015: Rwanda, 2016).
3.2 PEST analysis of Tuffstuff
The below is the macro environment factors affecting business operations of Tuffstuff:
Political – The cement price is primarily controlled by power tariffs, coal rates, freight,
railway tariffs, cess and royalty on limestone. These all prices are controlled by government.
Also, government is a biggest customer of Tuffstuff. The state government to attract
investments in their specific regions, offer fiscal incentives in the type of sales tax
deferrals/exemptions.
Economic – At present, the cement industry is in boom period, with many housing projects
and government infrastructure under construction. Despite of seeing a fall in the period of
2008-09, the export of Tuffstuff is estimated to again grow on account of several
infrastructure projects undertaking in places where it conducts its business and deciding to
establish its cement plants in new areas (Pandey, 2011).
Social – Being a mini cement plan with less image and brand value, the Tuffstuff face hard
situations to survive in the market. However, to increase in business reputation, the company
is attempting to provide more employment opportunities.
Technology – The complete procedure from mining to production is depends upon
technology. The government is planning to transfer technology in the energy conservation
field and environment protection to enhance efficiency of cement sector. Due to this,
Tuffstuff has made tremendous strides in latest technology assimilation and technical up-
gradation (BERRY, 2009).
3.3 What is SWOT Analysis
SWOT analyses weaknesses, strengths, threats and opportunities that are connected
with a situation by taking into consideration all external and internal aspects of market and
business. In this manner, the business manager can comprehend whether a situation has
enough factors in its favour and worth ultimately being pursued. Such technique of
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assessment has a great success track record, giving almost extremely supportive and accurate
insights to the resources of business. The SWOT analysis can be used by organisation for
strategic planning, business planning, marketing, competitor evaluation, product and business
development and research reports. The business firms can also use SWOT analysis for
organising team building activities (Rouse, 2016).
3.4 SWOT Analysis of Tuffstuff
The following is the strength, weakness, opportunities and threat of company that can assist
in decision to expand business in African region:
Strengths
 Domestic market
 Skilled employees
Weaknesses
 Less productivity
 Small business unit
 Low investment in R&D
 High rates of loan
 Brand portfolio
 Future rating of debt
Opportunities
 Venture capital
 Global markets
 Rising demand
 Profitability and growth rates
 New services and products
 New markets
 Income is increasing at constant rate
Threats
 Government regulations
 Tax changes
 Increasing cost of raw materials
 Cash flow
 External risks of business
 Financial capability
 Rising interest rates
 Technical issues
 Rising costs
 Price changes
CONCLUSION AND RECOMMENDATIONS
It can be concluded from above report that political conditions of Rwanda is positively
increasing with more infrastructure constructions. The government is also attracting more
investments by exempting tax rates. Economic conditions of Rwanda is in the state of boom
and infrastructure projects are expected to grow in the region that attracting several industries
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and service sector. The contribution of industries into the country’s GDP is also showing
excellent business opportunities. Hence, with its technological up gradations and strong
manpower strength, Tuffstuff can expand its successful operations into the Rwanda. The
increasing housing projects and infrastructure development in the country can lead to more
revenue for the Tuffstuff Ltd. However, the company should educate its employees and their
families to take necessary precautions to protect themselves from severe diseases that are
prevailing in the country.
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REFERENCES
Online and books
Aldrich, H., 2008. Organizations and environments. Stanford University Press.
BERRY, T., 2009. How to Perform SWOT Analysis. [Online]. Available through:
<http://articles.bplans.co.uk/marketing-a-business/how-to-perform-swot-analysis/300>.
[Accessed on 4 May 2016].
Bowditch, J.L., Buono, A.F. and Stewart, M.M., 2007. A primer on organizational behavior.
Wiley.
Foong, L.M., 2007. Understanding of SWOT analysis. Book, Aug, 31.
Harper, C., 2015. Organizations: Structures, processes and outcomes. Routledge.
Mistri, H., 2013. Research Report on Cement Industry.
Pandey, A., 2011. What is PESTLE Analysis. [Online]. Available through:
<http://bpmgeek.com/blog/what-pestle-analysis>. [Accessed on 4 May 2016].
Rouse, M., 2016. SWOT analysis (strengths, weaknesses, opportunities and threats analysis).
[Online]. Available through: <http://searchcio.techtarget.com/definition/SWOT-
analysis-strengths-weaknesses-opportunities-and-threats-analysis>. [Accessed on 5
May 2016].
Rwanda country profile. 2016. [Online]. Available through:
<http://www.bbc.com/news/world-africa-14093238>. [Accessed on 6 May 2016].
Rwanda State of Environment and Outlook Report. 2009. [Online]. Available through:
<http://www.rema.gov.rw/soe/chap1.php>. [Accessed on 3 May 2016].
Shah, A., 2006. Global Issues. [Online]. Available through:
<http://www.globalissues.org/article/429/rwanda>. [Accessed on 6 May 2016].
World Report 2015: Rwanda. 2016. [Online]. Available through:
<https://www.hrw.org/world-report/2015/country-chapters/rwanda>. [Accessed on 5
May 2016].
Journals
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knowledge management—The social interaction perspective. International Journal of
Information Management, 27(2), pp.104-118.
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Elder, S.D., Zerriffi, H. and Le Billon, P., 2013. Is Fairtrade certification greening
agricultural practices? An analysis of Fairtrade environmental standards in
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opportunities, and threats). Journal of proteome research, 6(2), pp.540-545.
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