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 - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, 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.
Low bargaining power of suppliers
– Suppliers of Fsg Logistics in the sector have low bargaining power. Frontier Services Group: Building a Pan-African Logistics Provider (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fsg Logistics to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
Organizational Resilience of Fsg Logistics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fsg Logistics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Cross disciplinary teams
– Horizontal connected teams at the Fsg Logistics are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
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 -
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Fsg Logistics supply chain. Even after few cautionary changes mentioned in the HBR case study - Frontier Services Group: Building a Pan-African Logistics Provider (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fsg Logistics vulnerable to further global disruptions in South East Asia.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Frontier Services Group: Building a Pan-African Logistics Provider (A), in the dynamic environment Fsg Logistics has struggled to respond to the nimble upstart competition. Fsg Logistics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Fsg Logistics has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Fsg Logistics even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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 -
Better consumer reach
– The expansion of the 5G network will help Fsg Logistics to increase its market reach. Fsg Logistics will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fsg Logistics can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Frontier Services Group: Building a Pan-African Logistics Provider (A) .
Shortening product life cycle
– it is one of the major threat that Fsg Logistics is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 .
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.
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.
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.
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.
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.
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 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.
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.
