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 - – central banks are concerned over increasing inflation, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
increasing household debt because of falling income levels, increasing commodity prices, 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 -
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.
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.
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.
Diverse revenue streams
– Fsg Logistics is present in almost all the verticals within the industry. This has provided firm in Frontier Services Group: Building a Pan-African Logistics Provider (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Fsg Logistics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Frontier Services Group: Building a Pan-African Logistics Provider (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 lead change in Strategy & Execution field
– Fsg Logistics is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fsg Logistics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Learning organization
- Fsg Logistics is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Fsg Logistics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Fsg Logistics is one of the most innovative firm in sector. Manager in Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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 -
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.
Capital Spending Reduction
– Even during the low interest decade, Fsg Logistics has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Fsg Logistics has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 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.
Lack of clear differentiation of Fsg Logistics products
– To increase the profitability and margins on the products, Fsg Logistics needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Hau L. Lee, Laurent De Clara suggests that, Fsg Logistics is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Fsg Logistics has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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 -
Building a culture of innovation
– managers at Fsg Logistics can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Creating value in data economy
– The success of analytics program of Fsg Logistics has opened avenues for new revenue streams for the organization in the industry. This can help Fsg Logistics to build a more holistic ecosystem as suggested in the Frontier Services Group: Building a Pan-African Logistics Provider (A) case study. Fsg Logistics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fsg Logistics is facing challenges because of the dominance of functional experts in the organization. Frontier Services Group: Building a Pan-African Logistics Provider (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
Loyalty marketing
– Fsg Logistics has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fsg Logistics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Fsg Logistics to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
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.
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 -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Fsg Logistics in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Frontier Services Group: Building a Pan-African Logistics Provider (A), Fsg Logistics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fsg Logistics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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.
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.
