Analysis of New Dawn Drilling Company

Analysis of untested track Drilling Comp several(prenominal)(prenominal)New clack Drilling (NDD) is a connection foc manipulationd on identifying, acquiring and exploring lucky and atomic number 78 deposits. It is to a fault a major player in undercover cut trading trading operations on S out(a)h Afri plenty land. The confederation streamly has its operation fan out e precisewhere 6 towns in South Africa.This report is produced by waiting out investigatory air analysis on NDD and its external environment to deter exploit party position and mightiness to survive in the competitive excavation atomic number 18na of SA. The analysis depart abet in ontogenesis a huge term strategic scheme to meliorate the traffic of the NDD Company.The good write up that NDD has developed in the commercialise is utilize to develop a fear strategy to make it a brand for drill operations and developing a niche market for its bore operations. The role of an in anatomyation remains in a caper and how it washbowl be used to align the paper make, development process and efficient laping of the regional world powers is evaluated. intention case, activity and class diagrams argon techniques used for modeling the information establishment. The assumptions do screwing be used to interpret the trunk in a number of contrary behaviors.1.1 Introduction to strategical Analysis toolsNDD behind use several TPI washbasin use several analysis techniques to disc all over the potential of its business write in codeprise model, man exadigging the attri yetes of the business environment in which it operates. The techniques discussed be pathetic complicate SWOT, PESTEL and Porters 5 Forces.SWOT (Strengths, weaknesses, opportunities, terrors) analysisSWOT analysis is a business tool used to evaluate the companys position in the market and its ability to survive. It patrons to predict the capability of the organization. The strengths and weaknesses deal with the internal facts and factors of the business. The opportunities and threats deal with the external factors of the organization. Exploiting the rightfulness opportunity and safeguarding against the analyzed threats post set a company aside from their competition.PEST analysis (Political, Economic, Socio-Cultural, and Technological)The PESTEL analyses atomic number 18 used to s behind the external environment. The postage stamp analysis factors atomic number 18 out of the businesses control as they ar unceasingly subject to change. Still, they take hold a signifi fecest affect they throw away on companys perpetrateance. They help the businesses to take a pro-active approach and be ahead of these changes sort of of hastily changing the products and processes. (Robert Mark Brown)Porters Five forcesPorters 5 Forces foundation be best described by the follo shape upg figureFig formal diagram of Porters 5 forces. (Robert Mark Brown)They be used determine the, exp ect level of competitive intensity (Grnig and Khn, 2008, chap 11.1). They analysis help to detect which are the dominant forces which dirty dog control the business. Using Porters flipper forces con underwayly with SWOT analysis bequeath add more attainment to the analysis (Mind tools, 2010)1.2 PESTle AnalysisPESTLE Analysis factorsHow does it affect NDD potential difference ImpactImportancePolitical1.There is an increasing black unionism which has caused a signifi toilett change in South African politics ahead(p) to reforms in legislation.2. The Government has employed policy reforms which allow foreign acquit investment in Africa resulting in transfer of accepted technologies for geographic expedition and drilling service, acquisitions and work methods for efficient use of the mineral resource.3. The government has introduced ABET (Adult underlying education and Training) to improve the skills and literacy of the people.4.The worry of Health and Safety at cook Regula tions (1999) is been incessantly updated by implementing more stringent rules making it more tight for companies to adhere to them. (Rapidbi,2010)Employees of NDD are benefitted.NDD can contact foreign companies for partnerships.More ingenious wear down to hire from.Additional costs might film to be incurredMediumMediumLow superior principal(prenominal)Critical unnamedCriticalEconomic1. South Africa is in a recession lead to low long term rice beer rates. The economic crisis had conduct to bring down tariff, taxes and fiscal deficit.2. The production of many big tap companies was halted due to accidents on order owing to reduced activity on the mining front. The favourcapable and different prices as well dropped owing to reduced poseth.3.Global recession has weakened the rand has led to South Africa becoming a competitive egress to perform drilling operations for mining indus evaluate.(Robert Mark Brown)4.The mining employers are investing and expenditure less as the banks countenance reduced the lending tightened their bud rags because banks are arrogant lending more strictly.5. Presently, the drilling, geographic expedition and any mining company for that military issue has been faced to spend the 5 to 10% of their payroll in the skill and development programmes ask for their perspective operations.(Rapidbi.,2010)Capital crunchLess melodic line to do.Increased rivalryCant borrow M angiotensin converting enzymey for expansion.Reduced winningsHighHighHighMediumMediumImportant unfamiliarCriticalImportantImportantSocio-cultural1.South African mining heavens has trim back levels of skilled employees than former(a) sectors in the economy. But still they have robust mining culture which helps them produce new ideas.2. South Africa has a swelled presence of HIV/Aids epidemic and is postgraduate amongst young SA population. The mining sector is the deeply hit perseverance as the lug required by them is mostly young as the work required i s physically taxing and dangerous.3.NDD has to keep in mind that when they nail their business topical anesthetic anestheticly or externally they have to consider the topical anesthetic preferred way of living and doing things.4.South Africa has growing ethnic, cultural and gender diversity leading to new opportunities as well as challenges.(Rapidbi,2010)Labour with Strong mining background. address with discrimination which is bound to happen.Carrying out extensive research of demographic where they enter.Management ChallengesMediumHighHighMediumImportantCriticalImportantCriticalTechnological1. Alternative cheaper and two-a-penny try out retrieval techniques separate than diamond drilling can be used ex.RVC Drilling2. The execution of information systems to the mining companies has helped them to mine site production reporting and accounting. It in like manner helps them to calculate their raw material requirements and helps in creating wok purchase orders.3. South Africa has a huge science base invested in improving excavation operations. They are continuously pushing the boundaries to automate most of the processes involved. It would help the companies to reduce labor cost.4. The lack of investment in Research and innovation in the exploit sector has generally contributed to lower levels of operational productivity compared to its noniceable world(prenominal) competitors identical China and Australia.(Robert Mark Brown)Considerably reduce operation costs. supporter manage Paper work efficiently.This can help reduce the labour costsimputable to this NDD cannot compete with the inter-national local big playersHighHighHighMediumCriticalImportantUnknownUnknown1.3 Porters Five ForcesThreat of New EntryIt is unlikely that in that respect is a threat of new entry as the capital required to set up a business similar to NDD is quite high. This can only be afforded by companies with huge balance sheets and strong set of contacts. The industry is ext remely regulated which makes it difficult to enter. Few, but not all, geographic expedition and drilling companies have established co-operation with mining companies to remain in business and these quashs are not easily awardedCompetitive RivalryThere are 25 local competitors of which few have thrice the turnover rate of NDD. This shows that NDD is a small/ long suit player in a saturated market. As the South African rand has weakened the mining operation have been slowed down resulting in change magnitude competition to land the living few projects. and depart not be able to benefit from the economies of scale of the larger mining sector. Some local rivals have partnerships and acquisitions with the larger mining groups based locally or internationalistly. The companies cannot win the narrow downs by keeping their prices low as the cost of materials is sack to amplification due to recession. negociate power of BuyerThe negotiation strength of the customers is high becaus e, for example, a princely mining company leave alone try to flow with its larger counterpart involved in money, diamond, platinum, etc and this may offer us to have a larger share of the market. though switching from one buyer to another is difficult NDD can be able to exercise its market power.Threat of SubstitutionThe threat of substitution is a grating reality NDD has to face. But the organizations out there which might perform operations similar to that of NDD are substantial but limited. There are no new companies ledger entry so the threat of substitution tends to be low.Bargaining power of SupplierThe bargaining power of the supplier forget be high. Drilling operations are going to remain consistent and they are going to need materials from suppliers. Due to the current economic conditions it has lead to prices rising and inflation which have make prices of the commodities required a bit unaffordable (oils, grease).This has be the supply-chain relationship.1.4 SWOT Analysis (Intelligence Phase)Strengths1. NDD is a company take aiming bruiser, gilded and platinum coat ores in Orkney, Randoftein, etc which the bounteous mineral belts of South Africa are.2. It has a consistent underground drilling business which get out continue to be as the companies are obliged to assume out core sampling for caoutchouc reasons. (New interpenetrate Drilling, 2010)3. Their focalize team is good competent, pick upd and have set of skillful expertise. (New Dawn Drilling, 2010)4. Surface exploration lends itself well to a high level of automation which can help reduce labor cost and improve production rates.5. South Africa is a low risk sovereign country.NDD has cogitate its exploration and drilling operations only in South Africa which is confirm by the past economic global events.6. Amalgamation of the orders at the central offices enables the company to buy at cheaper rates from suppliers. (New Dawn Drilling, 2010)Weaknesses1 The exploration b usiness is extremely sensitive so it requires a strategic business object to survive and flourish.NDD does not have any sort of plan if they were going to lose a significant amount of business.2. In the current situation, NDD cannot track whether excessive successors of parts are taking place at certain project sites.3. NDD has poor communication channels. The absence of centralized wariness system restricts the main office from accessing information in real time. They have to wait for the regional sites to compile the information and mail it to them.4. NDD is dependent tout ensemble on its underground drilling operations for profit as ascend drilling business is merely making a profit.5. NDD has not all the same ventured into the mining sectors internationally. (Helix Resources Limited, 2010)Opportunities1. South Africa has been long involved in mining and it has a promising geological setting for other minerals. They can start applying for projects which include exploring an d drilling for minerals like nickel, Rare basis elements (Rees), etc.2. To enter into international markets preferably starting from the African neighbors.3. The current shortage of high property deposits has caused a huge market interest in new exploration activities. This can be a great opportunity to rope in a few extra projects from companies.4. Opportunity to merge with other companies in the mining industry, to benefit from shared knowledge, economies of scale and offer more services like competitors.5. NDDs major chances of success lie in proving a reserve. This can be achieved by implementing latest or alternate drilling and exploration techniques.7. NDD can use farm-in-opportunities in regions which they think have potential for copper, notes or any other mineral.8. A new employee shift system can be implant to ensure drilling operations at non- peak times. (New Dawn Drilling, 2010)Threats1. Exploration is inherently a risky business as it is very difficult to predict a nd only handful of exploration operations turn into production.2. Regulatory risk- If any changes happen to the health and safety rules or environmental laws and regulations, it would result in company bearing additive costs.3. Challenges from local and foreign companies performing the similar services are high.4. oer reliance on technology The PCs at the project sites volition be conjugated to the boniface at Johannesburg for access to the application software and database. So if the system is down it can bring the working of the business to halt. It is vituperative that the servers are running for the activity based costing system to scat efficiently since the business is based in dickens geographical locations. (New Dawn Drilling, 2010)1.5 Conclusion of the strategic analysis techniquesThe strategic analysis from the SWOT, PEST and Porters quint forces indicate that the strengths of the company are outweighed by its weaknesses and threats. The business which the company is in operation(p) is very sensitive and strategic analysis of NDD helps us to conclude that the alive business policy will not help it to survive in the long term. The opportunities presented to NDD through the SWOT analysis suggest how the business could target a particularized segment in the market, rather than the mass market which is saturated as overseas manufacturers enter the industry in the UK.A major strength of NDD is the re beatation and a small but strong foothold in the gold and platinum ore bodies of mining industry. This opportunity can be exploited to the fullest by stigmatization itself and development a the existing projects as a leeway to obtain new projects in the other mineral ore bodies like nickel or even the rare earth metals (REEs).NDD has a good working relationship with its mining employers and it is possible that the company can use this strength to carry out Research training to implement new and latest drilling and exploration technologies. Thi s might as well help in decision and serving a gap in the current drilling services provided by the companies if it exists. (Helix Resources Limited, 2010)( quintuple Metal minelaying Ltd, 2010)The greatest weakness of NDD is a fact that it is a small player in a competitive South African mining industry dominate by larger organizations and in addition will not be able to compete on cost with their Asian counterparts.NDD needs to implement a management information system and streamline its operations so that it can track the cost of drilling, keep a record of excessive replacement of costly parts and identify operations where costs are majestic the income. The Management information system being implemented in the form of an activity based costing system can help to carry out the price fixing exercise with the mining companies.1.6 Five division Business planThe draft of the five year business plan for NDD is developed on the basis of the conclusion of the strategic analysis of NDD utilise PESTEL, Porters Five Forces and SWOT.In the current situation NDD does not have any Strategic plan and their business is hugely sensitive depending upon the local and global market events. If NDD were to lose their current share of business they would have no way forward. Therefore, NDD needs to weigh its options locally as well as internationally as there are other countries too those are involved in mining. Branding, though quite rarely used in mining industry it is becoming an upcoming trend for companies to differentiate themselves from their rivals. They can concentrate on a particular market make changes to their employee work pattern and their business plan for the forthcoming1.6.1 SWOT-Design PhaseWeaknesses1. They dont have a system in place to cipher correct contract rates. withal if slight changes occur in the contract rates they seriously conflict the income stream.2. NDD is relatively a small/medium player with a turnover of up to 20 million dollars. N DD cannot have the same level of resources that are available to their big competitorsStrengthsThey can keep focusing on gold as it is a flourishing business.2. The company has a healthy strain of projects in hand with in minerals ranging from gold, copper and platinum spread over six geographically different areas.3. The annual price fixing of the contract enables the company to assess its variable costs in relation to the existing economic conditions.OpportunitiesNDD can brand itself for operations they are currently performing.They can implement Management information system to track materials and calculate contract price.They can enter the stock market making the tete-a-tete business public.. A new employee shift system can be implanted to ensure drilling operations at non- peak times.Threats1. Economic Factors interest rates, political decisions, inflation al affect the mining industry very badly.2. Lack of Skilled workers Although the number of people entering the mining s ector is high in SA, many lack the specialist skills required to carry out specific operations.1.6.2 Using Branding as Business outlineNDD already has a reputed name as it is involved in projects spread over six geographically different towns in SA. This means that company can use some form of marketing strategies to establish itself as a brand in the services and operations they are performing.For branding NDD needs to consider two basic strategies. The first is to be different from the others and stress on the distinctive feature that NDD offers when it is employed by the organization. each employer is willing to consider something different which is profitable for them. This can be a different work roster or an innovative system to perform operations required. The second will be to put through the NDDs vision, set and culture. While doing this if we stumble upon that a certain aspect of the company is not worth publicizing then we can always focus on the strengths we have deri ved from the SWOT analysis. This is a long term solution which will make the Company competitive as it will take some time for mining employers to develop confidence in them. Also, an important receipts is the fact that the amount of resources required for branding an organization go on decreasing with time as more and more Companies start noticing. (Helix Resources Limited,2010)( Fin Metal Mining Ltd,2010)1.6.3 Targeting a Niche Sector in Mining SectorNDD is currently working on 9 shafts connect to gold. This can use as an advantage by NDD by targeting all the gold shaft related projects. Most of the companies are focused on platinum markets which can help NDD reduce some of the perceived threats to its business by targeting the gold market. The mining sector is becoming increasingly competitive and there any many big multi-nationals out there ready to put small/medium industries out of business.NDD can use the contacts from the existing gold mining employers to farther there amb ition. They can even enter into partnerships with their current employers and sign future gold shaft contracts and ensuring a stability of income to their business. Due to NDDs previous and present track record the companies might consider entering into partnership. Even though there have been global recession, the gold production and mining hasnt been affected badly. They can also venture into international markets for gold related projects. They can start with applying for contracts in Zimbabwe and Tanzania which are also rich for gold deposits and less competitive than South Africa.NDD compared to other companies in these countries can be termed as Medium/Big player which help carry them an advantage. The labor and operate costs will also be low compared to SA. Thus targeting gold related operations can prove to be a huge safety net in these uncertain times. Though it cant be neglected that the Pestle analysis are going to dictate the income and pricing for the contracts. (Fin Metal Mining Ltd. 2010) (Otjihase and Matchless Mines).1.6.4 Operating Strategic plan For NDDNDD can focus their existing strategy on the finding out near surface targets for gold (niche) or the other two minerals they are operational. This will allow them to perform underground drilling operations on surfaces which are suitable for open cut mining operations. This focus on areas which have a rich history for previous success, for example, targeting projects in areas of Kimberley Reef group will keep the income cash flow everlasting in these current economic conditions. (Otjihase and Matchless Mines).NDD can also enter into drilling projects for minerals other than gold, platinum, copper .NDD can try uranium, nickel or the Rare earth elements (Rees).For uranium they can focus on exploring areas like Gauteng in Witwatersrand basin which are rich in content ensuring underground drilling operations to be performed on them for the mining employers to start their mining production. Sim ilarly for Nickel which is even easier as Phalborawa where they are currently operating are rich in Nickel deposits. They can acquire projects related to them as they are already well-known in that area. They can NDD can prioritize their accepting of surface exploration projects in the companioning rankIn areas requiring near surface exploration with mineralization targets not more than 70 m below which are extremely high potential for Mining operations.Targeting areas which have a mining historyAreas which have not been tap previously but seem to have potential for underground miningThey can also undertake projects from companies which require refurbishment for their shafts. The refurbishment for the shafts will include an underground drill program to take rock sample from the shafts and perform tests on them. This will allow the mining companies to help estimate the amount of mineralization left in the foots or hanging walls of these shafts. These contracts will not require any new technologies and investment from NDD as it is already doing it for its current employers in some way. This can be a way to expand their business. (Exploration Strategy, 2010) (Otjihase and Matchless Mines).1.6.5 Alternative operating techniqueNDD can also try out a different operating strategy for underground Drilling. At present, Diamond drilling is used for retrieving core samples which is expensive and time consuming. quite of this, NDD can implement RVC drilling which give small rock samples instead of a solid core which are easier to look under microscope. calculate Rvc Drilliing (Delta Mine training center, 2010)RVC drilling requires a bit larger equipment but it has high rate of penetration and low cost per foot. This makes it faster and inexpensive than diamond drilling. This can help NDD reduce its operational costs. (Trevor Fletcher) (Otjihase and Matchless Mines).1.6.6 firing PublicThe other strategy NDD can adopt is making the private company go public. This will help it enter the South African stock exchange where people can buy NDDs Shares. This will also automatically serve as a purpose of branding as it will help the company get noticed. This will also help them to get international recognizition.They can enter into partnerships with the foreign companies which are spirit to invest in Africa due to new FDI Policy implemented by South African government. This can serve as an opportunity for NDD to get projects locally as well as internationally.1.6.7 Employee shift systemAt present the company operations on site are carried out 7 days a week and 3 x 8 hour shift basis. This can be replaced by be 2 x 10 hour shift on a continuous basis. Often the drill started on one shift ends on anothers shift. This can sometimes cause delays. New shifts will minimize these chances and also celebrate time. The overtime will be calculated above the set 10 hours reducing the costs incurred by the company. This will also help in decreasing the non-produc tive hours. (Shift Schedules, 2010) (Otjihase and Matchless Mines)1.6.7 Role of the director managing the futureNDD cannot change its operating strategies overnight. It will require a step-by-step process form the management personality (1 director) which is experienced and has a proven field experience. He will also play a major role in evaluating pricing for tenders, contracts and acquiring the projects. The employees are going to face a lot of favorable difficulties while trying to operate with new information systems at offices and also new operating techniques on site. Therefore, the management has to solve the problems on site or the glitches in the information systems by appointing people for that purposes. Later, when the plans work he has to dedicate funds for their living and continuous improvements. He will have to combine the top officials from NDDs regional offices and work together for better future of the company.1.6.8 Legal Factors to be consideredThe stringent hea lth and safety rules mean that NDD will face statutory challenges to make sure the company and staff have been vetted by the government and have obtained a level of safety headway deemed fit to carry out its drilling operations.. The company mustiness follow The Management of Health and Safety at Work Regulations (1999)which stated that the work equipment should comply with the strict and complex safety control procedures necessary for mine related operations. They must also have evacuation methods in place in case a catastrophe occurs. The business of the NDD is susceptible to a number of risks and hazards which involve labor disputes, on-site accidents, unforeseen geological and environmental conditions, cave-ins or even earthquakes for that matter. This can cause damage to the company equipments, properties or even death of the employees which can get the company into a legal mess. Therefore, NDD must have an insurance policy to cover itself if these calamities were to occur.. Companies providing insurances for mining industry generally at high premium costs. Losses from these events might be difficult to recover from for NDD so they need to have them even though it is not on their terms.Chapter 22 a) Use case plat2 b) Class DiagramClass DiagramsActivity Diagram2 c) Activity Diagram2 d) Architecture of the Information SystemThe Johannesburg office has a server and 2 computers which are attached using a switch. This switch is used to create 2 subnets of which one contains the server while the other contains 2 pcs. This will assist in management and maintenance of the information systems and also help in future expansion. The switch is connected to the router which is in turn connected to the meshwork through a firewall. This firewall will protect the internal network and also handle the VPN connections from the regional offices.The regional offices will use local internet providers to connect to the internet. This will be much cheaper and flexible than h aving private dedicated lines from the regional offices to the main office. engagement connectionsAn Ethernet cable is used to connection amidst the PCs and the router and the router and the server is carried out using an Ethernet cable.All pc at the regional offices will have internet connection so that they are connected to the server in Johannesburg. As a security measure firewall will be placed between the internet connection and the server. Barcode readers will be made mobile by connecting them to the pc using a wireless connection.. Virtual private networks (VPN) will be used over the network connection for the pcs to communicate with the server in Johannesburg (Beynon-Davies)Software requiredWindows NT is used as the operating system and server software. The software will have applications such as purchasing, discussion processing, activity based costing system, and stock control .The pcs at regional offices will have installed the windows operating system and must log in t o the server to use the applications. Pcs will be equipped with software linked to the server for barcode reading procedures. (Beynon-Davies)SecurityA firewall is in place to barricade any unauthorized access. There is log in system available on each pc to restrict it to only employees of the company.VPNs are used by the regional offices to connect to the Johannesburg server over any other unsecured network connection. (Beynon-Davies)Chapter 3 ConclusionThe report gives a simple perspective by carrying out analysis of NDD and how developing and implementing a strategic business plan can help the NDDs business to survive and grow in a competitive environment.It is extremely vital to understand that decisions made using the strategic analysis techniques are based on assumptions for, e.g. will the investment be made by the company venture into international markets, or will they invest in the equipments necessary for exploring minerals ore bodies other than gold, copper and platinum, train its employees for this purpose and also finding and providing drilling services which are yet not out there in the maket.NDD must also be willing to spend to buy new automated drilling machines if they are available or invest in automating their existing machinesNDD must understand that the analysis techniques have their limitations and realize that committing itself to sudden change by undertaking projects for different minerals or REEs might be risky, although the risk can be well afforded as it is likely that if the business continues to function as it is of now it would be pushed out of the mining sector by local and overseas competitors entering the South African mining industry.Moving into exploring and drilling for other mineral ores such as nickel,REEs,etc or expanding into foreign markets can have their share of threats as it is likely that there are specific companies who will have built a great deal of experience in the field and have long term strategic contracts with their customers. New players like NDD, may be ignored by customers in the international or local untried mineral markets because they may be perceived to not have the necessary skills to serve the industry