IFC Asset Management Company: Mobilizing Capital for Development SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of IFC Asset Management Company: Mobilizing Capital for Development
This case explores the International Finance Corporation's (IFC) creative and effective use of the private equity business model as a tool to mobilize financing for economic development around the world. In its bid to provide more capital for private sector investment in developing countries, IFC played a key role in the emergence of the private equity industry in these markets through its funds' investments and, later, created its own third-party fund management platform-IFC Asset Management Company (AMC). Through the experience of AMC, the case considers broader issues typically faced by a private equity business in setting its strategy. These include: How can a fund manager decide the optimal size of assets under management? Given its resources and capabilities, what new funds could a firm raise and what sectors should it target? The case further delves into the working mechanisms of AMC and thereby explains how AMC, as a special type of fund manager, handles different phases of private equity business. Finally, the case considers the key challenges IFC and AMC face today and assesses what the future might hold for each. As the largest global development institution focusing on the private sector, IFC had been an important player in developing countries. However, IFC's target markets continue to rapidly evolve and attract more capital and players, both local and international. How could IFC stay relevant and continue to play a differentiated leadership role in emerging markets under these circumstances? What other products and services could it offer to support the private sector in these countries in a distinct and impactful way?
Swot Analysis of "IFC Asset Management Company: Mobilizing Capital for Development" written by Ali Gara, William Meehan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ifc Amc facing as an external strategic factors. Some of the topics covered in IFC Asset Management Company: Mobilizing Capital for Development case study are - Strategic Management Strategies, Emerging markets, Entrepreneurial finance and Finance & Accounting.
Some of the macro environment factors that can be used to understand the IFC Asset Management Company: Mobilizing Capital for Development casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing energy prices, increasing transportation and logistics costs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of IFC Asset Management Company: Mobilizing Capital for Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IFC Asset Management Company: Mobilizing Capital for Development case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ifc Amc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ifc Amc 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 IFC Asset Management Company: Mobilizing Capital for Development can be done for the following purposes –
1. Strategic planning using facts provided in IFC Asset Management Company: Mobilizing Capital for Development case study
2. Improving business portfolio management of Ifc Amc
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 Ifc Amc
Strengths IFC Asset Management Company: Mobilizing Capital for Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ifc Amc in IFC Asset Management Company: Mobilizing Capital for Development Harvard Business Review case study are -
Effective Research and Development (R&D)
– Ifc Amc 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 IFC Asset Management Company: Mobilizing Capital for Development - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Ifc Amc 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 Ifc Amc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in IFC Asset Management Company: Mobilizing Capital for Development Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Ifc Amc 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 Ifc Amc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Ifc Amc 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 IFC Asset Management Company: Mobilizing Capital for Development HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Finance & Accounting industry
– IFC Asset Management Company: Mobilizing Capital for Development firm has clearly differentiated products in the market place. This has enabled Ifc Amc to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Ifc Amc to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Ifc Amc in the sector have low bargaining power. IFC Asset Management Company: Mobilizing Capital for Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ifc Amc to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Ifc Amc in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Ifc Amc 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.
Ability to recruit top talent
– Ifc Amc is one of the leading recruiters in the industry. Managers in the IFC Asset Management Company: Mobilizing Capital for Development are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Ifc Amc is present in almost all the verticals within the industry. This has provided firm in IFC Asset Management Company: Mobilizing Capital for Development 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.
Analytics focus
– Ifc Amc is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ali Gara, William Meehan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Ifc Amc has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in IFC Asset Management Company: Mobilizing Capital for Development 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.
Weaknesses IFC Asset Management Company: Mobilizing Capital for Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IFC Asset Management Company: Mobilizing Capital for Development are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study IFC Asset Management Company: Mobilizing Capital for Development, in the dynamic environment Ifc Amc has struggled to respond to the nimble upstart competition. Ifc Amc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study IFC Asset Management Company: Mobilizing Capital for Development, is just above the industry average. Ifc Amc 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.
High cash cycle compare to competitors
Ifc Amc 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 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 Ifc Amc supply chain. Even after few cautionary changes mentioned in the HBR case study - IFC Asset Management Company: Mobilizing Capital for Development, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ifc Amc vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Gara, William Meehan suggests that, Ifc Amc 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.
High operating costs
– Compare to the competitors, firm in the HBR case study IFC Asset Management Company: Mobilizing Capital for Development 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 Ifc Amc 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Ifc Amc, firm in the HBR case study IFC Asset Management Company: Mobilizing Capital for Development needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Ifc Amc 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ifc Amc 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 strategic competitive environment developments
– As IFC Asset Management Company: Mobilizing Capital for Development HBR case study mentions - Ifc Amc 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.
Capital Spending Reduction
– Even during the low interest decade, Ifc Amc 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.
Opportunities IFC Asset Management Company: Mobilizing Capital for Development | 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 IFC Asset Management Company: Mobilizing Capital for Development are -
Learning at scale
– Online learning technologies has now opened space for Ifc Amc 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.
Developing new processes and practices
– Ifc Amc 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, Ifc Amc is facing challenges because of the dominance of functional experts in the organization. IFC Asset Management Company: Mobilizing Capital for Development 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.
Creating value in data economy
– The success of analytics program of Ifc Amc has opened avenues for new revenue streams for the organization in the industry. This can help Ifc Amc to build a more holistic ecosystem as suggested in the IFC Asset Management Company: Mobilizing Capital for Development case study. Ifc Amc 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Ifc Amc 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 Ifc Amc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Ifc Amc 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 Finance & Accounting segment.
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 Ifc Amc 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. Ifc Amc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Ifc Amc 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 IFC Asset Management Company: Mobilizing Capital for Development - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ifc Amc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ifc Amc 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. Ifc Amc 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ifc Amc 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 Ifc Amc to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ifc Amc 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.
Threats IFC Asset Management Company: Mobilizing Capital for Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IFC Asset Management Company: Mobilizing Capital for Development are -
Regulatory challenges
– Ifc Amc 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.
Environmental challenges
– Ifc Amc 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. Ifc Amc can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Ifc Amc needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Ifc Amc.
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 Ifc Amc business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Ifc Amc 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.
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.
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. Ifc Amc 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ifc Amc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ifc Amc has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Ifc Amc 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.
Stagnating economy with rate increase
– Ifc Amc 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.
Increasing wage structure of Ifc Amc
– 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 Ifc Amc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ifc Amc 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.
Weighted SWOT Analysis of IFC Asset Management Company: Mobilizing Capital for Development 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 IFC Asset Management Company: Mobilizing Capital for Development 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 IFC Asset Management Company: Mobilizing Capital for Development 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 IFC Asset Management Company: Mobilizing Capital for Development 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 IFC Asset Management Company: Mobilizing Capital for Development 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 Ifc Amc needs to make to build a sustainable competitive advantage.
