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 - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is backlash against globalization, increasing transportation and logistics costs, increasing commodity prices, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, increasing energy 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 -
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the IFC Asset Management Company: Mobilizing Capital for Development Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High 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.
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.
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.
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.
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.
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 -
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.
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.
Slow decision making process
– As mentioned earlier in the report, Ifc Amc 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. Ifc Amc 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.
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.
Increasing silos among functional specialists
– The organizational structure of Ifc Amc is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Ifc Amc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ifc Amc to focus more on services rather than just following the product oriented approach.
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.
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 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.
Aligning sales with marketing
– It come across in the case study IFC Asset Management Company: Mobilizing Capital for Development 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 IFC Asset Management Company: Mobilizing Capital for Development can leverage the sales team experience to cultivate customer relationships as Ifc Amc is planning to shift buying processes online.
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.
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.
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 -
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.
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.
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.
Buying journey improvements
– Ifc Amc can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. IFC Asset Management Company: Mobilizing Capital for Development 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.
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.
Leveraging digital technologies
– Ifc Amc 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ifc Amc can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, IFC Asset Management Company: Mobilizing Capital for Development, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 -
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 Ifc Amc in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ifc Amc 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 IFC Asset Management Company: Mobilizing Capital for Development .
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.
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.
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.
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.
Consumer confidence and its impact on Ifc Amc 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.
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.
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.
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.
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.
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.
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.
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.