Frontier Services Group: Building a Pan-African Logistics Provider (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Frontier Services Group: Building a Pan-African Logistics Provider (A)
In June 2015, Peter Phillips, Chief Operating Officer of Frontier Services Group (FSG), was preparing an update for the board on how operations would support the company's new strategy. Given the ongoing decline in the price of oil and the extractive industries, the outlook had changed for FSG. His aim was to steer a new course to becoming the leading pan-African logistics provider. Founded in March 2014 by Erik Prince, a former U.S. Navy Seal and ex-CEO of Blackwater, a private security firm, FSG was a logistics and transportation company listed on the Hong Kong Stock Exchange, with a market capitalization in excess of $200 million. Headquartered in Nairobi, Kenya, the company employed more than 340 staff in its head office and regional subsidiaries in Hong Kong, Beijing, Dubai, and Malta. In addition to traditional logistics solutions like transporting personnel, materials, supplies, and humanitarian aid, FSG provided civil engineering and support services such as in-house construction, facilities management, and workforce accommodation. Its mission was to build and maintain the infrastructure, installations and platforms its client organizations required to operate in Africa. Although the new approach would open up significant growth opportunities, a number of operational challenges remained. The lack of trained and skilled labor in Africa, coupled with the limited competence of the logistics sector would, if not addressed, impede the future growth of the company. The case traces the evolution of FSG since its inception in 2014 as a Kenyan air charter and freight services company. It offers an overview of the company's recent development and current strategy, notably how it handles the logistics needs of customers across the vast and very diverse African continent.
Swot Analysis of "Frontier Services Group: Building a Pan-African Logistics Provider (A)" written by Hau L. Lee, Laurent De Clara includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fsg Logistics facing as an external strategic factors. Some of the topics covered in Frontier Services Group: Building a Pan-African Logistics Provider (A) case study are - Strategic Management Strategies, Emerging markets, Growth strategy, Innovation, Marketing, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Frontier Services Group: Building a Pan-African Logistics Provider (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, geopolitical disruptions, there is increasing trade war between United States & China, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Frontier Services Group: Building a Pan-African Logistics Provider (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Frontier Services Group: Building a Pan-African Logistics Provider (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fsg Logistics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fsg Logistics operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Frontier Services Group: Building a Pan-African Logistics Provider (A) can be done for the following purposes –
1. Strategic planning using facts provided in Frontier Services Group: Building a Pan-African Logistics Provider (A) case study
2. Improving business portfolio management of Fsg Logistics
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fsg Logistics
Strengths Frontier Services Group: Building a Pan-African Logistics Provider (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fsg Logistics in Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Frontier Services Group: Building a Pan-African Logistics Provider (A) firm has clearly differentiated products in the market place. This has enabled Fsg Logistics to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Fsg Logistics to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Fsg Logistics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Fsg Logistics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fsg Logistics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Fsg Logistics has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Fsg Logistics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Fsg Logistics is one of the leading recruiters in the industry. Managers in the Frontier Services Group: Building a Pan-African Logistics Provider (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Fsg Logistics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fsg Logistics has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Fsg Logistics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Frontier Services Group: Building a Pan-African Logistics Provider (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Fsg Logistics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fsg Logistics has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Fsg Logistics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Fsg Logistics is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Hau L. Lee, Laurent De Clara can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Frontier Services Group: Building a Pan-African Logistics Provider (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Frontier Services Group: Building a Pan-African Logistics Provider (A) are -
High cash cycle compare to competitors
Fsg Logistics has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fsg Logistics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Frontier Services Group: Building a Pan-African Logistics Provider (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fsg Logistics 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Fsg Logistics needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Frontier Services Group: Building a Pan-African Logistics Provider (A) HBR case study mentions - Fsg Logistics takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Fsg Logistics, firm in the HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Fsg Logistics has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A), it seems that the employees of Fsg Logistics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Fsg Logistics is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fsg Logistics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fsg Logistics to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Frontier Services Group: Building a Pan-African Logistics Provider (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fsg Logistics has relatively successful track record of launching new products.
Products dominated business model
– Even though Fsg Logistics has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Frontier Services Group: Building a Pan-African Logistics Provider (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Frontier Services Group: Building a Pan-African Logistics Provider (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Frontier Services Group: Building a Pan-African Logistics Provider (A) are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fsg Logistics can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Fsg Logistics can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Fsg Logistics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Frontier Services Group: Building a Pan-African Logistics Provider (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fsg Logistics to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Fsg Logistics can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fsg Logistics can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Frontier Services Group: Building a Pan-African Logistics Provider (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fsg Logistics can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fsg Logistics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fsg Logistics to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Fsg Logistics to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Fsg Logistics can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fsg Logistics in the consumer business. Now Fsg Logistics can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Fsg Logistics can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fsg Logistics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Fsg Logistics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Frontier Services Group: Building a Pan-African Logistics Provider (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fsg Logistics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Frontier Services Group: Building a Pan-African Logistics Provider (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A) are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fsg Logistics.
Environmental challenges
– Fsg Logistics needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fsg Logistics can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fsg Logistics business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Fsg Logistics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Fsg Logistics demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fsg Logistics in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fsg Logistics will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Fsg Logistics has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fsg Logistics needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Fsg Logistics needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Fsg Logistics can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Fsg Logistics needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Fsg Logistics
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Fsg Logistics.
Weighted SWOT Analysis of Frontier Services Group: Building a Pan-African Logistics Provider (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Frontier Services Group: Building a Pan-African Logistics Provider (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Frontier Services Group: Building a Pan-African Logistics Provider (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Frontier Services Group: Building a Pan-African Logistics Provider (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Fsg Logistics needs to make to build a sustainable competitive advantage.