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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing energy prices, increasing household debt because of falling income levels, wage bills are increasing, talent flight as more people leaving formal jobs,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
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.
Organizational Resilience of Ifc Amc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ifc Amc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Cross disciplinary teams
– Horizontal connected teams at the Ifc Amc 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.
Strong track record of project management
– Ifc Amc 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
– Ifc Amc is one of the most innovative firm in sector. Manager in IFC Asset Management Company: Mobilizing Capital for Development Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Ifc Amc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ifc Amc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IFC Asset Management Company: Mobilizing Capital for Development 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 Ifc Amc has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study IFC Asset Management Company: Mobilizing Capital for Development, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Ifc Amc products
– To increase the profitability and margins on the products, Ifc Amc needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Ifc Amc 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, 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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ifc Amc is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study IFC Asset Management Company: Mobilizing Capital for Development can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 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.
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 -
Manufacturing automation
– Ifc Amc 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ifc Amc 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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ifc Amc can use these opportunities to build new business models that can help the communities that Ifc Amc operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
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.
Loyalty marketing
– Ifc Amc 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.
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.
Better consumer reach
– The expansion of the 5G network will help Ifc Amc to increase its market reach. Ifc Amc 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.
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.
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 -
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.
Shortening product life cycle
– it is one of the major threat that Ifc Amc is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study IFC Asset Management Company: Mobilizing Capital for Development, Ifc Amc 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.
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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ifc Amc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.