Ethiopian Airlines: Bringing Africa Together SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ethiopian Airlines: Bringing Africa Together
Ethiopian Airlines plans to expand its African market base to become a leading airline in the continent. As part of the airline's multi-hub strategy, the vice-president of alliances and corporate strategy and his team must identify a suitable hub location and decide on the appropriate mode and level of ownership. Success in the first hub is essential as it will both validate the viability of the multi-hub strategy and set the tone for the establishment of subsequent hubs throughout the continent. The vice-president and his team need to resolve three issues: location of the first hub, entry mode and ownership level.
Swot Analysis of "Ethiopian Airlines: Bringing Africa Together" written by Paul W. Beamish, Yamlaksira Getachew includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hub Ethiopian facing as an external strategic factors. Some of the topics covered in Ethiopian Airlines: Bringing Africa Together case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ethiopian Airlines: Bringing Africa Together casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Ethiopian Airlines: Bringing Africa Together
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ethiopian Airlines: Bringing Africa Together case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hub Ethiopian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hub Ethiopian 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 Ethiopian Airlines: Bringing Africa Together can be done for the following purposes –
1. Strategic planning using facts provided in Ethiopian Airlines: Bringing Africa Together case study
2. Improving business portfolio management of Hub Ethiopian
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 Hub Ethiopian
Strengths Ethiopian Airlines: Bringing Africa Together | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hub Ethiopian in Ethiopian Airlines: Bringing Africa Together Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Ethiopian Airlines: Bringing Africa Together firm has clearly differentiated products in the market place. This has enabled Hub Ethiopian to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hub Ethiopian to invest into research and development (R&D) and innovation.
Learning organization
- Hub Ethiopian 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 Hub Ethiopian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ethiopian Airlines: Bringing Africa Together Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Hub Ethiopian is one of the leading recruiters in the industry. Managers in the Ethiopian Airlines: Bringing Africa Together are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Hub Ethiopian 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 Paul W. Beamish, Yamlaksira Getachew 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.
Highly skilled collaborators
– Hub Ethiopian 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 Ethiopian Airlines: Bringing Africa Together HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Hub Ethiopian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Hub Ethiopian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ethiopian Airlines: Bringing Africa Together 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.
Low bargaining power of suppliers
– Suppliers of Hub Ethiopian in the sector have low bargaining power. Ethiopian Airlines: Bringing Africa Together has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hub Ethiopian to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hub Ethiopian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hub Ethiopian 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
– Hub Ethiopian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Hub Ethiopian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hub Ethiopian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Hub Ethiopian has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hub Ethiopian 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.
Weaknesses Ethiopian Airlines: Bringing Africa Together | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ethiopian Airlines: Bringing Africa Together are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ethiopian Airlines: Bringing Africa Together, in the dynamic environment Hub Ethiopian has struggled to respond to the nimble upstart competition. Hub Ethiopian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Hub Ethiopian products
– To increase the profitability and margins on the products, Hub Ethiopian needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Hub Ethiopian 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ethiopian Airlines: Bringing Africa Together, it seems that the employees of Hub Ethiopian 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.
Skills based hiring
– The stress on hiring functional specialists at Hub Ethiopian 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ethiopian Airlines: Bringing Africa Together 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 Hub Ethiopian has relatively successful track record of launching new products.
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 Hub Ethiopian supply chain. Even after few cautionary changes mentioned in the HBR case study - Ethiopian Airlines: Bringing Africa Together, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hub Ethiopian vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hub Ethiopian 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.
Increasing silos among functional specialists
– The organizational structure of Hub Ethiopian is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Hub Ethiopian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hub Ethiopian to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ethiopian Airlines: Bringing Africa Together, is just above the industry average. Hub Ethiopian needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hub Ethiopian is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ethiopian Airlines: Bringing Africa Together 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 Ethiopian Airlines: Bringing Africa Together | 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 Ethiopian Airlines: Bringing Africa Together are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hub Ethiopian is facing challenges because of the dominance of functional experts in the organization. Ethiopian Airlines: Bringing Africa Together 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.
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. Hub Ethiopian 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. Hub Ethiopian 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.
Better consumer reach
– The expansion of the 5G network will help Hub Ethiopian to increase its market reach. Hub Ethiopian 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.
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. Hub Ethiopian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hub Ethiopian can use these opportunities to build new business models that can help the communities that Hub Ethiopian operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Hub Ethiopian can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Hub Ethiopian in the consumer business. Now Hub Ethiopian can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Hub Ethiopian 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.
Manufacturing automation
– Hub Ethiopian 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hub Ethiopian 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 Hub Ethiopian to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Hub Ethiopian 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.
Leveraging digital technologies
– Hub Ethiopian 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hub Ethiopian 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.
Threats Ethiopian Airlines: Bringing Africa Together External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ethiopian Airlines: Bringing Africa Together are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ethiopian Airlines: Bringing Africa Together, Hub Ethiopian 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 .
Shortening product life cycle
– it is one of the major threat that Hub Ethiopian is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hub Ethiopian 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. Hub Ethiopian 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.
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. Hub Ethiopian needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Hub Ethiopian 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hub Ethiopian with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hub Ethiopian business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Hub Ethiopian 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.
High dependence on third party suppliers
– Hub Ethiopian 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.
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 Hub Ethiopian.
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 Hub Ethiopian 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.
Weighted SWOT Analysis of Ethiopian Airlines: Bringing Africa Together 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 Ethiopian Airlines: Bringing Africa Together 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 Ethiopian Airlines: Bringing Africa Together 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 Ethiopian Airlines: Bringing Africa Together 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 Ethiopian Airlines: Bringing Africa Together 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 Hub Ethiopian needs to make to build a sustainable competitive advantage.