ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa
In 2010, ACTIS embarked on an ambitious project to build a pan-Middle East and Africa (MEA) payments platform. It had purchased Mediterranean Smart Cards Company (MSCC), a bankcard issuer with operations across Africa, and had identified a follow-on target, Visa Jordan Card Services (VJCS) as part of its buy-and-build strategy, and another potential acquisition in South Africa. These could enable the ACTIS platform to capture the entire value chain in the payments business in the MEA region. However, not long after the purchase of MSCC, political turmoil engulfed the Arab world, prompting the ACTIS investment committee in London to question the viability of creating a payments platform in MEA.
Swot Analysis of "ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa" written by Claudia Zeisberger, Jean Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Actis Mea facing as an external strategic factors. Some of the topics covered in ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa casestudy better are - – talent flight as more people leaving formal jobs, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Actis Mea, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Actis Mea 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa can be done for the following purposes –
1. Strategic planning using facts provided in ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa case study
2. Improving business portfolio management of Actis Mea
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 Actis Mea
Strengths ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Actis Mea in ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa Harvard Business Review case study are -
Strong track record of project management
– Actis Mea is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Actis Mea 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Actis Mea has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Actis Mea to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Actis Mea in the sector have low bargaining power. ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Actis Mea to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa firm has clearly differentiated products in the market place. This has enabled Actis Mea to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Actis Mea to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Actis Mea 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Actis Mea 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 Actis Mea in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Actis Mea 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.
Learning organization
- Actis Mea 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 Actis Mea is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Actis Mea digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Actis Mea 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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.
Ability to recruit top talent
– Actis Mea is one of the leading recruiters in the industry. Managers in the ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa are -
High cash cycle compare to competitors
Actis Mea 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 operating costs
– Compare to the competitors, firm in the HBR case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 Actis Mea 's lucrative customers.
Need for greater diversity
– Actis Mea 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.
Aligning sales with marketing
– It come across in the case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa can leverage the sales team experience to cultivate customer relationships as Actis Mea is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 Actis Mea has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Actis Mea 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. Actis Mea 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.
Capital Spending Reduction
– Even during the low interest decade, Actis Mea 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa, is just above the industry average. Actis Mea 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa, it seems that the employees of Actis Mea 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Claudia Zeisberger, Jean Wee suggests that, Actis Mea 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa, in the dynamic environment Actis Mea has struggled to respond to the nimble upstart competition. Actis Mea has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa | 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa are -
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. Actis Mea 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, Actis Mea can use these opportunities to build new business models that can help the communities that Actis Mea operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Actis Mea 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Actis Mea 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 Actis Mea to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Actis Mea has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Actis Mea to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Actis Mea 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.
Creating value in data economy
– The success of analytics program of Actis Mea has opened avenues for new revenue streams for the organization in the industry. This can help Actis Mea to build a more holistic ecosystem as suggested in the ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa case study. Actis Mea 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. Actis Mea can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Actis Mea is facing challenges because of the dominance of functional experts in the organization. ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Actis Mea can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Actis Mea to increase its market reach. Actis Mea 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.
Loyalty marketing
– Actis Mea 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.
Buying journey improvements
– Actis Mea can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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.
Threats ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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. Actis Mea can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Shortening product life cycle
– it is one of the major threat that Actis Mea is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa, Actis Mea 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 .
Consumer confidence and its impact on Actis Mea 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.
Environmental challenges
– Actis Mea 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. Actis Mea can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Actis Mea 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.
Increasing wage structure of Actis Mea
– 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 Actis Mea.
Stagnating economy with rate increase
– Actis Mea 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.
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. Actis Mea 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
– Actis Mea has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Actis Mea 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.
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.
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 Actis Mea.
Weighted SWOT Analysis of ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa 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 Actis Mea needs to make to build a sustainable competitive advantage.
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You can download Excel Template of Case Study Solution & Analysis of ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa