The Abraaj Group and the Acibadem Healthcare Investment (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Abraaj Group and the Acibadem Healthcare Investment (A)
This case concerns the proposed buyout of Acibadem, a leading hospital chain in Turkey. Abraaj, a MENA region private equity firm, proposes to make its first investment in Turkey. The case highlights the role of Turkish health care reform in driving the value. The case provides an opportunity to estimate the potential return on investment as well as evaluate the structuring of the transaction.
Authors :: Paul A. Gompers, Bora Uluduz, Firdevs Abacioglu
Swot Analysis of "The Abraaj Group and the Acibadem Healthcare Investment (A)" written by Paul A. Gompers, Bora Uluduz, Firdevs Abacioglu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abraaj Acibadem facing as an external strategic factors. Some of the topics covered in The Abraaj Group and the Acibadem Healthcare Investment (A) case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Abraaj Group and the Acibadem Healthcare Investment (A) casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, there is backlash against globalization, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of The Abraaj Group and the Acibadem Healthcare Investment (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Abraaj Group and the Acibadem Healthcare Investment (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abraaj Acibadem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abraaj Acibadem 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 The Abraaj Group and the Acibadem Healthcare Investment (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Abraaj Group and the Acibadem Healthcare Investment (A) case study
2. Improving business portfolio management of Abraaj Acibadem
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 Abraaj Acibadem
Strengths The Abraaj Group and the Acibadem Healthcare Investment (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abraaj Acibadem in The Abraaj Group and the Acibadem Healthcare Investment (A) Harvard Business Review case study are -
Organizational Resilience of Abraaj Acibadem
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Abraaj Acibadem does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Abraaj Acibadem digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abraaj Acibadem has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Abraaj Acibadem is present in almost all the verticals within the industry. This has provided firm in The Abraaj Group and the Acibadem Healthcare Investment (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Abraaj Acibadem 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
– Abraaj Acibadem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Abraaj Acibadem 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.
Highly skilled collaborators
– Abraaj Acibadem 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 The Abraaj Group and the Acibadem Healthcare Investment (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Abraaj Acibadem in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Abraaj Acibadem is one of the most innovative firm in sector. Manager in The Abraaj Group and the Acibadem Healthcare Investment (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– The Abraaj Group and the Acibadem Healthcare Investment (A) firm has clearly differentiated products in the market place. This has enabled Abraaj Acibadem to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Abraaj Acibadem to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Abraaj Acibadem in the sector have low bargaining power. The Abraaj Group and the Acibadem Healthcare Investment (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abraaj Acibadem to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Abraaj Acibadem has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Abraaj Group and the Acibadem Healthcare Investment (A) are -
High cash cycle compare to competitors
Abraaj Acibadem 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 star products
– The top 2 products and services of the firm as mentioned in the The Abraaj Group and the Acibadem Healthcare Investment (A) 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 Abraaj Acibadem has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Abraaj Acibadem 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul A. Gompers, Bora Uluduz, Firdevs Abacioglu suggests that, Abraaj Acibadem 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 strategic competitive environment developments
– As The Abraaj Group and the Acibadem Healthcare Investment (A) HBR case study mentions - Abraaj Acibadem 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 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 Abraaj Acibadem supply chain. Even after few cautionary changes mentioned in the HBR case study - The Abraaj Group and the Acibadem Healthcare Investment (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abraaj Acibadem vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Abraaj Group and the Acibadem Healthcare Investment (A), in the dynamic environment Abraaj Acibadem has struggled to respond to the nimble upstart competition. Abraaj Acibadem has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Abraaj Acibadem 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.
Aligning sales with marketing
– It come across in the case study The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) can leverage the sales team experience to cultivate customer relationships as Abraaj Acibadem is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A) 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 Abraaj Acibadem 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Abraaj Acibadem 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. Abraaj Acibadem 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.
Opportunities The Abraaj Group and the Acibadem Healthcare Investment (A) | 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 The Abraaj Group and the Acibadem Healthcare Investment (A) are -
Manufacturing automation
– Abraaj Acibadem 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.
Learning at scale
– Online learning technologies has now opened space for Abraaj Acibadem 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abraaj Acibadem can use these opportunities to build new business models that can help the communities that Abraaj Acibadem operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Using analytics as competitive advantage
– Abraaj Acibadem 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 The Abraaj Group and the Acibadem Healthcare Investment (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abraaj Acibadem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Abraaj Acibadem to increase its market reach. Abraaj Acibadem 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.
Building a culture of innovation
– managers at Abraaj Acibadem 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abraaj Acibadem is facing challenges because of the dominance of functional experts in the organization. The Abraaj Group and the Acibadem Healthcare Investment (A) 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.
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. Abraaj Acibadem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Abraaj Acibadem can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Abraaj Acibadem 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abraaj Acibadem 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.
Developing new processes and practices
– Abraaj Acibadem 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Abraaj Acibadem in the consumer business. Now Abraaj Acibadem can target international markets with far fewer capital restrictions requirements than the existing system.
Threats The Abraaj Group and the Acibadem Healthcare Investment (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A) are -
Regulatory challenges
– Abraaj Acibadem 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.
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. Abraaj Acibadem needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Abraaj Acibadem business can come under increasing regulations regarding data privacy, data security, etc.
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. Abraaj Acibadem 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Abraaj Group and the Acibadem Healthcare Investment (A), Abraaj Acibadem 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 .
Consumer confidence and its impact on Abraaj Acibadem 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.
Shortening product life cycle
– it is one of the major threat that Abraaj Acibadem is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
High dependence on third party suppliers
– Abraaj Acibadem 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.
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.
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. Abraaj Acibadem 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
– Abraaj Acibadem has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Abraaj Acibadem 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.
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 Abraaj Acibadem.
Weighted SWOT Analysis of The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) 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 The Abraaj Group and the Acibadem Healthcare Investment (A) 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 Abraaj Acibadem needs to make to build a sustainable competitive advantage.