Bharti Airtel in Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bharti Airtel in Africa
In June 2010, Bharti Airtel, India's largest mobile services operator, acquired the African assets of Bahrain-based Zain Telecom for $10.7 billion-the largest ever cross-border deal in emerging markets. Bharti's executives envisioned that they would replicate the highly successful high-volume, low-cost telecom model that they had pioneered for the Indian masses in Africa. But when they began to integrate the companies, Bharti's executives discovered a slew of unexpected challenges, including cultural differences between their Indian and African employees, poorer infrastructure than they had expected with higher-than-anticipated costs, a monopolistic distribution network, strong competitors, a weak partner ecosystem, and a market that was unresponsive to tariff cuts. In early 2012, a year and a half later, the company has outsourced its networks, IT and customer service operations like it did in India; launched a unified brand across the continent; and culturally integrated with its new environment. Key business metrics, including profit margins and market share, are showing early signs of improvement. But questions remain about whether the company will be able to overtake MTN, Africa's leading player, by lowering tariffs like it did in India, and what its strategy should be going forward.
Swot Analysis of "Bharti Airtel in Africa" written by Krishna G. Palepu, Tanya Bijlani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bharti's Airtel facing as an external strategic factors. Some of the topics covered in Bharti Airtel in Africa case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Globalization, Innovation, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Bharti Airtel in Africa casestudy better are - – supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
there is increasing trade war between United States & China, technology disruption, etc
Introduction to SWOT Analysis of Bharti Airtel in Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bharti Airtel in Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bharti's Airtel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bharti's Airtel 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 Bharti Airtel in Africa can be done for the following purposes –
1. Strategic planning using facts provided in Bharti Airtel in Africa case study
2. Improving business portfolio management of Bharti's Airtel
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bharti's Airtel
Strengths Bharti Airtel in Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bharti's Airtel in Bharti Airtel in Africa Harvard Business Review case study are -
Ability to lead change in Global Business field
– Bharti's Airtel 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 Bharti's Airtel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Bharti's Airtel is present in almost all the verticals within the industry. This has provided firm in Bharti Airtel in Africa 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
– Bharti's Airtel 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 Krishna G. Palepu, Tanya Bijlani 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
– Bharti's Airtel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bharti Airtel in Africa 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.
Ability to recruit top talent
– Bharti's Airtel is one of the leading recruiters in the industry. Managers in the Bharti Airtel in Africa are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Bharti's Airtel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bharti's Airtel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Bharti's Airtel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bharti's Airtel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Bharti's Airtel 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.
High switching costs
– The high switching costs that Bharti's Airtel 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.
Strong track record of project management
– Bharti's Airtel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Bharti's Airtel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bharti's Airtel 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.
Superior customer experience
– The customer experience strategy of Bharti's Airtel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Bharti Airtel in Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bharti Airtel in Africa are -
High cash cycle compare to competitors
Bharti's Airtel 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.
Increasing silos among functional specialists
– The organizational structure of Bharti's Airtel is dominated by functional specialists. It is not different from other players in the Global Business segment. Bharti's Airtel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bharti's Airtel to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Bharti's Airtel 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. Bharti's Airtel 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bharti's Airtel needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bharti Airtel in Africa 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 Bharti's Airtel has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Krishna G. Palepu, Tanya Bijlani suggests that, Bharti's Airtel 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.
Skills based hiring
– The stress on hiring functional specialists at Bharti's Airtel 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.
No frontier risks strategy
– After analyzing the HBR case study Bharti Airtel in Africa, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Interest costs
– Compare to the competition, Bharti's Airtel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bharti Airtel in Africa, in the dynamic environment Bharti's Airtel has struggled to respond to the nimble upstart competition. Bharti's Airtel 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 Bharti Airtel in Africa, is just above the industry average. Bharti's Airtel 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.
Opportunities Bharti Airtel in Africa | 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 Bharti Airtel in Africa are -
Better consumer reach
– The expansion of the 5G network will help Bharti's Airtel to increase its market reach. Bharti's Airtel 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Bharti's Airtel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bharti's Airtel 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.
Creating value in data economy
– The success of analytics program of Bharti's Airtel has opened avenues for new revenue streams for the organization in the industry. This can help Bharti's Airtel to build a more holistic ecosystem as suggested in the Bharti Airtel in Africa case study. Bharti's Airtel 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 Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bharti's Airtel 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. Bharti's Airtel 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.
Learning at scale
– Online learning technologies has now opened space for Bharti's Airtel 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.
Using analytics as competitive advantage
– Bharti's Airtel 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 Bharti Airtel in Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bharti's Airtel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Bharti's Airtel can develop new processes and procedures in Global Business 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.
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 Bharti's Airtel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bharti's Airtel can use these opportunities to build new business models that can help the communities that Bharti's Airtel operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Bharti's Airtel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bharti Airtel in Africa 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.
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. Bharti's Airtel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Bharti's Airtel in the consumer business. Now Bharti's Airtel can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Bharti Airtel in Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bharti Airtel in Africa are -
High dependence on third party suppliers
– Bharti's Airtel 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.
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 Bharti's Airtel.
Technology acceleration in Forth Industrial Revolution
– Bharti's Airtel has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Bharti's Airtel needs to keep up with the evolution of technology in the Global Business 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.
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.
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 Bharti's Airtel business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Bharti's Airtel 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 Global Business industry regulations.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bharti's Airtel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Bharti's Airtel
– 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 Bharti's Airtel.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bharti Airtel in Africa, Bharti's Airtel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bharti's Airtel in the Global Business industry. The Global Business 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.
Environmental challenges
– Bharti's Airtel 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. Bharti's Airtel can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bharti's Airtel 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 Bharti Airtel in Africa .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bharti's Airtel 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 Bharti Airtel in Africa 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 Bharti Airtel in Africa 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 Bharti Airtel in Africa 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 Bharti Airtel in Africa 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 Bharti Airtel in Africa 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 Bharti's Airtel needs to make to build a sustainable competitive advantage.
