Qalaa Holdings and the Egyptian Refining Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Qalaa Holdings and the Egyptian Refining Company
This case follows Qalaa Holdings, a successful Egypt-based private equity firm, and gives insight into the types of investments it pursued, its growth over time, and the limited partner base it had at hand. It also allows students to consider and debate whether the traditional private equity fund structure can be applied in Africa. In particular, the case focuses on one of Qalaa's largest and most difficult greenfield infrastructure projects: Egyptian Refining Company. It tracks the project from its structuring stage in 2007, through the adverse periods of the global financial crisis and Arab Spring, until 2012. At this time, Hisham El-Khazindar, co-founder and managing director, had to decide on the fate of the project. While passionate about contributing to Africa's development, he could not ignore the challenges: the sheer size and complexity of the project, the high financial stakes, and the region's on-going unstable political environment.
Swot Analysis of "Qalaa Holdings and the Egyptian Refining Company" written by Victoria Ivashina, Marc Homsy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Qalaa Egyptian facing as an external strategic factors. Some of the topics covered in Qalaa Holdings and the Egyptian Refining Company case study are - Strategic Management Strategies, Entrepreneurial finance, Financial management, Government, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Qalaa Holdings and the Egyptian Refining Company casestudy better are - – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, wage bills are increasing, etc
Introduction to SWOT Analysis of Qalaa Holdings and the Egyptian Refining Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Qalaa Holdings and the Egyptian Refining Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Qalaa Egyptian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Qalaa Egyptian 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 Qalaa Holdings and the Egyptian Refining Company can be done for the following purposes –
1. Strategic planning using facts provided in Qalaa Holdings and the Egyptian Refining Company case study
2. Improving business portfolio management of Qalaa Egyptian
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Qalaa Egyptian
Strengths Qalaa Holdings and the Egyptian Refining Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Qalaa Egyptian in Qalaa Holdings and the Egyptian Refining Company Harvard Business Review case study are -
Ability to recruit top talent
– Qalaa Egyptian is one of the leading recruiters in the industry. Managers in the Qalaa Holdings and the Egyptian Refining Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Qalaa Egyptian 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 Qalaa Holdings and the Egyptian Refining Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Qalaa Egyptian is present in almost all the verticals within the industry. This has provided firm in Qalaa Holdings and the Egyptian Refining Company 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.
Strong track record of project management
– Qalaa Egyptian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Qalaa Egyptian is one of the most innovative firm in sector. Manager in Qalaa Holdings and the Egyptian Refining Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Qalaa Holdings and the Egyptian Refining Company 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.
Learning organization
- Qalaa Egyptian 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 Qalaa Egyptian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Qalaa Holdings and the Egyptian Refining Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Qalaa Egyptian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Qalaa Egyptian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Qalaa Egyptian 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Qalaa Holdings and the Egyptian Refining Company firm has clearly differentiated products in the market place. This has enabled Qalaa Egyptian to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Qalaa Egyptian to invest into research and development (R&D) and innovation.
Organizational Resilience of Qalaa Egyptian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Qalaa Egyptian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Qalaa Egyptian 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 Qalaa Egyptian in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Qalaa Holdings and the Egyptian Refining Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Qalaa Holdings and the Egyptian Refining Company are -
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 Qalaa Egyptian supply chain. Even after few cautionary changes mentioned in the HBR case study - Qalaa Holdings and the Egyptian Refining Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Qalaa Egyptian vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Qalaa Egyptian products
– To increase the profitability and margins on the products, Qalaa Egyptian needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Qalaa Egyptian, firm in the HBR case study Qalaa Holdings and the Egyptian Refining Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Qalaa Egyptian 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.
Skills based hiring
– The stress on hiring functional specialists at Qalaa Egyptian 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Qalaa Egyptian 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.
High cash cycle compare to competitors
Qalaa Egyptian 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Holdings and the Egyptian Refining Company can leverage the sales team experience to cultivate customer relationships as Qalaa Egyptian is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Qalaa Holdings and the Egyptian Refining Company, it seems that the employees of Qalaa Egyptian 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Egyptian has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Egyptian 's lucrative customers.
Opportunities Qalaa Holdings and the Egyptian Refining Company | 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 Qalaa Holdings and the Egyptian Refining Company are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Qalaa Egyptian 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 Qalaa Egyptian to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Qalaa Egyptian 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
– Qalaa Egyptian 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Qalaa Egyptian 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. Qalaa Egyptian 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.
Developing new processes and practices
– Qalaa Egyptian can develop new processes and procedures in Finance & Accounting 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Qalaa Egyptian is facing challenges because of the dominance of functional experts in the organization. Qalaa Holdings and the Egyptian Refining Company 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.
Better consumer reach
– The expansion of the 5G network will help Qalaa Egyptian to increase its market reach. Qalaa Egyptian 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Qalaa Egyptian to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. Qalaa Egyptian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Qalaa Egyptian can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Qalaa Egyptian can use these opportunities to build new business models that can help the communities that Qalaa Egyptian operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Qalaa Egyptian in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Qalaa Egyptian 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.
Threats Qalaa Holdings and the Egyptian Refining Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Qalaa Holdings and the Egyptian Refining Company are -
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. Qalaa Egyptian 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.
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 Qalaa Egyptian.
Regulatory challenges
– Qalaa Egyptian 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 Finance & Accounting industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Qalaa Egyptian in the Finance & Accounting industry. The Finance & Accounting 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 Qalaa Holdings and the Egyptian Refining Company, Qalaa Egyptian may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Increasing wage structure of Qalaa Egyptian
– 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 Qalaa Egyptian.
Environmental challenges
– Qalaa Egyptian 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. Qalaa Egyptian can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Qalaa Egyptian 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 Qalaa Holdings and the Egyptian Refining Company .
Technology acceleration in Forth Industrial Revolution
– Qalaa Egyptian has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Qalaa Egyptian needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Qalaa Egyptian in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Qalaa Egyptian 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Holdings and the Egyptian Refining Company 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 Qalaa Egyptian needs to make to build a sustainable competitive advantage.