Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining Description

In January 2017, Banro Corporation, a Canadian gold mining company in the Democratic Republic of Congo, underwent recapitalization to cope with financial distress, and to optimize its operations of mining assets. Since the commencement of commercial mining in 2009, unexpected social conflicts and operational challenges had led to significantly lower production than expected, with a large cost overrun, while the price of gold declined sharply from 2012. Would the recapitalization enable Banro Corporation to carry out its medium-term strategic plan of incremental growth by operational improvements, through cost reduction and throughput expansion over a five-year horizon? How could the company achieve its long-term goal of being a model of excellence in sustainability? Wiboon Kittilaksanawong is affiliated with Saitama University. Kabi Olivier Katabaruka is affiliated with Nagoya University of Commerce & Business.

Case Description Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Strategic Managment Tools Used in Case Study Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

STEP 1. Problem Identification in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 6. Recommendations Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

STEP 7. Basis of Recommendations for Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study

Case Analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining is a Harvard Business (HBR) Case Study on Innovation & Entrepreneurship , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Innovation & Entrepreneurship, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Innovation & Entrepreneurship Solutions

In the Texas Business School, Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Step 1 – Problem Identification of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining - Harvard Business School Case Study

The first step to solve HBR Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Banro Recapitalization is facing right now. Even though the problem statement is essentially – “Innovation & Entrepreneurship” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Banro Recapitalization, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining.

The external environment analysis of Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study. PESTEL analysis of " Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

To do comprehensive PESTEL analysis of case study – Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Government policies have significant impact on the business environment of any country. The firm in “ Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Banro Recapitalization is operating, firms are required to store customer data within the premises of the country. Banro Recapitalization needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Banro Recapitalization in case study Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Banro Recapitalization in case study “ Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Banro Recapitalization in case study “ Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Banro Recapitalization can compete against other competitors.

Government Scheme & Subsidies Impact on Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Banro Recapitalization needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Social Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Technological Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Environmental Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Legal Factors that Impact Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study. PESTEL analysis of " Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Banro Corporation: Recapitalization for Sustainability in the Congo's Gold Mining case study solution