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 - – supply chains are disrupted by pandemic , geopolitical disruptions, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
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.
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.
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.
Ability to lead change in Strategy & Execution field
– Hub Ethiopian 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 Hub Ethiopian in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Hub Ethiopian, firm in the HBR case study Ethiopian Airlines: Bringing Africa Together needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 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.
Interest costs
– Compare to the competition, Hub Ethiopian 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.
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.
Slow to strategic competitive environment developments
– As Ethiopian Airlines: Bringing Africa Together HBR case study mentions - Hub Ethiopian takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hub Ethiopian 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
– Hub Ethiopian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ethiopian Airlines: Bringing Africa Together 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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.
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.
