Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria
Describes the creation of the first private equity fund in Nigeria and the fund's potential first investment in GS Telecom, a Nigerian telecommunication service company. The fund's managers are keenly aware that a bad first investment could create a vicious circle for the fund. Thus, whether to invest and under what terms is of crucial importance. Can also be taught as a country case on Nigeria with a focus on entrepreneurship, telecommunications, and venture capital.
Authors :: Walter Kuemmerle, Chad Ellis, William J. Coughlin
Swot Analysis of "Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria" written by Walter Kuemmerle, Chad Ellis, William J. Coughlin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nigeria Fund's facing as an external strategic factors. Some of the topics covered in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria case study are - Strategic Management Strategies, Professional transitions, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria casestudy better are - – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, there is backlash against globalization, technology disruption, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nigeria Fund's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nigeria Fund's 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria can be done for the following purposes –
1. Strategic planning using facts provided in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria case study
2. Improving business portfolio management of Nigeria Fund's
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nigeria Fund's
Strengths Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nigeria Fund's in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria Harvard Business Review case study are -
Innovation driven organization
– Nigeria Fund's is one of the most innovative firm in sector. Manager in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Innovation & Entrepreneurship field
– Nigeria Fund's 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 Nigeria Fund's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Nigeria Fund's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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.
Low bargaining power of suppliers
– Suppliers of Nigeria Fund's in the sector have low bargaining power. Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nigeria Fund's to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Nigeria Fund's 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 Walter Kuemmerle, Chad Ellis, William J. Coughlin 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.
Superior customer experience
– The customer experience strategy of Nigeria Fund's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Nigeria Fund's 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 Nigeria Fund's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Nigeria Fund's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nigeria Fund's 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.
Training and development
– Nigeria Fund's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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.
High brand equity
– Nigeria Fund's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nigeria Fund's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Nigeria Fund's is present in almost all the verticals within the industry. This has provided firm in Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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.
Weaknesses Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, is just above the industry average. Nigeria Fund's 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.
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 Nigeria Fund's supply chain. Even after few cautionary changes mentioned in the HBR case study - Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nigeria Fund's vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Nigeria Fund's products
– To increase the profitability and margins on the products, Nigeria Fund's needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Nigeria Fund's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, it seems that the employees of Nigeria Fund's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Nigeria Fund's 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. Nigeria Fund's 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.
Slow to strategic competitive environment developments
– As Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria HBR case study mentions - Nigeria Fund's 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 bargaining power of channel partners
– Because of the regulatory requirements, Walter Kuemmerle, Chad Ellis, William J. Coughlin suggests that, Nigeria Fund's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, in the dynamic environment Nigeria Fund's has struggled to respond to the nimble upstart competition. Nigeria Fund's 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, Nigeria Fund's 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.
Opportunities Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria | 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Nigeria Fund's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Nigeria Fund's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nigeria Fund's 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.
Building a culture of innovation
– managers at Nigeria Fund's 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 Innovation & Entrepreneurship segment.
Creating value in data economy
– The success of analytics program of Nigeria Fund's has opened avenues for new revenue streams for the organization in the industry. This can help Nigeria Fund's to build a more holistic ecosystem as suggested in the Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria case study. Nigeria Fund's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Nigeria Fund's 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nigeria Fund's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nigeria Fund's 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 Nigeria Fund's to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Nigeria Fund's can develop new processes and procedures in Innovation & Entrepreneurship 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.
Manufacturing automation
– Nigeria Fund's can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 Nigeria Fund's 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.
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. Nigeria Fund's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nigeria Fund's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Nigeria Fund's 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.
Threats Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria are -
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. Nigeria Fund's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Nigeria Fund's 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.
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.
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 Nigeria Fund's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nigeria Fund's 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria .
High dependence on third party suppliers
– Nigeria Fund's 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.
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 Nigeria Fund's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria, Nigeria Fund's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Nigeria Fund's business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Nigeria Fund's 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 Innovation & Entrepreneurship industry regulations.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nigeria Fund's 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
– Nigeria Fund's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Nigeria Fund's needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Weighted SWOT Analysis of Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Capital Alliance Private Equity: Creating a Private Equity Leader in Nigeria 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 Nigeria Fund's needs to make to build a sustainable competitive advantage.