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 - – wage bills are increasing, geopolitical disruptions, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, there is backlash against globalization, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, 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 -
Diverse revenue streams
– Hub Ethiopian is present in almost all the verticals within the industry. This has provided firm in Ethiopian Airlines: Bringing Africa Together 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.
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.
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.
Operational resilience
– The operational resilience strategy in the Ethiopian Airlines: Bringing Africa Together 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.
Organizational Resilience of Hub Ethiopian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hub Ethiopian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Hub Ethiopian 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 Ethiopian Airlines: Bringing Africa Together - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
High switching costs
– The high switching costs that Hub Ethiopian 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.
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.
Innovation driven organization
– Hub Ethiopian is one of the most innovative firm in sector. Manager in Ethiopian Airlines: Bringing Africa Together Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hub Ethiopian 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.
Products dominated business model
– Even though Hub Ethiopian 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 - Ethiopian Airlines: Bringing Africa Together should strive to include more intangible value offerings along with its core products and services.
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.
Aligning sales with marketing
– It come across in the case study Ethiopian Airlines: Bringing Africa Together that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ethiopian Airlines: Bringing Africa Together can leverage the sales team experience to cultivate customer relationships as Hub Ethiopian is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Ethiopian Airlines: Bringing Africa Together 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 Hub Ethiopian 's lucrative customers.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Ethiopian Airlines: Bringing Africa Together, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Hub Ethiopian has opened avenues for new revenue streams for the organization in the industry. This can help Hub Ethiopian to build a more holistic ecosystem as suggested in the Ethiopian Airlines: Bringing Africa Together case study. Hub Ethiopian can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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.
Building a culture of innovation
– managers at Hub Ethiopian 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hub Ethiopian 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hub Ethiopian 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, Ethiopian Airlines: Bringing Africa Together, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Hub Ethiopian 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. 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.
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 -
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.
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 Hub Ethiopian in the Strategy & Execution sector and impact the bottomline of the organization.
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
– Hub Ethiopian has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hub Ethiopian 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.
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.
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. Hub Ethiopian can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hub Ethiopian 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 Ethiopian Airlines: Bringing Africa Together .
Environmental challenges
– Hub Ethiopian 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. Hub Ethiopian can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Hub Ethiopian
– 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 Hub Ethiopian.
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.
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.
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.