The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa
On 8 June 2010, India's leading integrated telecom service provider, Bharti Airtel Ltd ("Airtel"), completed its acquisition of the mobile operations of Kuwaiti company Zain in 15 countries throughout Africa. At US$10.7 billion, it was Airtel's most expensive and ambitious acquisition yet, and the largest ever cross-border deal from one emerging market to another. Airtel hoped that, with this deal, the company would be transformed into a truly global telecom company, fulfilling its vision of building a world-class multinational. Airtel was a pioneer in India's telecom sector and was the flagship company of the Bharti conglomerate of industries. Sunil Bharti Mittal had founded the Bharti group in 1976, and it had grown from being a small-scale manufacturer of bicycle parts into one of the largest business groups in India, with operations in the telecom, financial services, retail and food sectors. Airtel had started its telecom services business in 1995 by launching mobile services in Delhi, India. In a short span of about 15 years, the company had become India's largest cellular service provider and one of the top five wireless operators in the world, with revenue of US$8.8 billion and net income of about US$2 billion as of 31 March 2010. The acquisition of Zain would add 40 million subscribers, bringing its total user base to approximately 185 million. What strategy should Bharti pursue to ensure its success in Africa?
Swot Analysis of "The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa" written by Indranil Bose, Nikhil Celly, Havovi Joshi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bharti Airtel facing as an external strategic factors. Some of the topics covered in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa case study are - Strategic Management Strategies, Emerging markets, Financial management, Government, Marketing, Negotiations, Operations management, Organizational culture and Global Business.
Some of the macro environment factors that can be used to understand the The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing commodity prices, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bharti Airtel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bharti 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa can be done for the following purposes –
1. Strategic planning using facts provided in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa case study
2. Improving business portfolio management of Bharti 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 Airtel
Strengths The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bharti Airtel in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa Harvard Business Review case study are -
High switching costs
– The high switching costs that Bharti 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.
Superior customer experience
– The customer experience strategy of Bharti Airtel 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 Bharti Airtel in the sector have low bargaining power. The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bharti Airtel to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa 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.
Successful track record of launching new products
– Bharti Airtel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bharti Airtel has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Bharti Airtel is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bharti Airtel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Bharti 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 Indranil Bose, Nikhil Celly, Havovi Joshi 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.
Ability to recruit top talent
– Bharti Airtel is one of the leading recruiters in the industry. Managers in the The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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.
Strong track record of project management
– Bharti 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.
High brand equity
– Bharti Airtel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bharti Airtel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Bharti Airtel is one of the most innovative firm in sector. Manager in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Bharti Airtel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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.
Weaknesses The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa are -
Skills based hiring
– The stress on hiring functional specialists at Bharti 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.
Lack of clear differentiation of Bharti Airtel products
– To increase the profitability and margins on the products, Bharti Airtel needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Bharti Airtel is dominated by functional specialists. It is not different from other players in the Global Business segment. Bharti Airtel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bharti Airtel to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Bharti Airtel 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.
Low market penetration in new markets
– Outside its home market of Bharti Airtel, firm in the HBR case study The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa HBR case study mentions - Bharti Airtel 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 cash cycle compare to competitors
Bharti 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.
Need for greater diversity
– Bharti Airtel has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa 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 Bharti Airtel 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Bharti 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.
Aligning sales with marketing
– It come across in the case study The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa 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 Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa can leverage the sales team experience to cultivate customer relationships as Bharti Airtel is planning to shift buying processes online.
Opportunities The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa are -
Creating value in data economy
– The success of analytics program of Bharti Airtel has opened avenues for new revenue streams for the organization in the industry. This can help Bharti Airtel to build a more holistic ecosystem as suggested in the The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa case study. Bharti Airtel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bharti 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bharti Airtel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Airtel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bharti Airtel is facing challenges because of the dominance of functional experts in the organization. The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa 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.
Building a culture of innovation
– managers at Bharti Airtel 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 Global Business segment.
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 Airtel in the consumer business. Now Bharti Airtel can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Bharti 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bharti Airtel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Bharti Airtel to increase its market reach. Bharti 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 Airtel 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
– Bharti Airtel 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.
Learning at scale
– Online learning technologies has now opened space for Bharti 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.
Threats The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bharti Airtel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Bharti Airtel 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bharti 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa .
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 Airtel.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bharti 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.
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 Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain Africa, Bharti 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 .
Environmental challenges
– Bharti 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 Airtel can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Stagnating economy with rate increase
– Bharti Airtel can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Bharti Airtel needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Bharti 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 Airtel.
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. Bharti Airtel 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.
Weighted SWOT Analysis of The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 The Indian Tiger Prowls in Africa: Bharti Airtel's Acquisition of Zain 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 Airtel needs to make to build a sustainable competitive advantage.
