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, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, 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 -
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.
Learning organization
- Abraaj Acibadem 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 Abraaj Acibadem is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Abraaj Group and the Acibadem Healthcare Investment (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High brand equity
– Abraaj Acibadem has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abraaj Acibadem to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Abraaj Acibadem is one of the leading recruiters in the industry. Managers in the The Abraaj Group and the Acibadem Healthcare Investment (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Abraaj Acibadem has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abraaj Acibadem 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.
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.
Operational resilience
– The operational resilience strategy in the The Abraaj Group and the Acibadem Healthcare Investment (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High 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.
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.
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.
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 -
Need for greater diversity
– Abraaj Acibadem 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.
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.
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.
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.
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.
Products dominated business model
– Even though Abraaj Acibadem has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Abraaj Group and the Acibadem Healthcare Investment (A) should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A), it seems that the employees of Abraaj Acibadem 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A), is just above the industry average. Abraaj Acibadem 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.
Low market penetration in new markets
– Outside its home market of Abraaj Acibadem, firm in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Abraaj Acibadem is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Abraaj Acibadem needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abraaj Acibadem to focus more on services rather than just following the product oriented approach.
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 -
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abraaj Acibadem 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. Abraaj Acibadem 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abraaj Acibadem can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Abraaj Group and the Acibadem Healthcare Investment (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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.
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 Abraaj Acibadem 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abraaj Acibadem 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 Abraaj Acibadem to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Abraaj Acibadem can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Abraaj Group and the Acibadem Healthcare Investment (A) 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.
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 -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abraaj Acibadem in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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 Abraaj Acibadem.
Stagnating economy with rate increase
– Abraaj Acibadem 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.
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.
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.
Environmental challenges
– Abraaj Acibadem 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. Abraaj Acibadem can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abraaj Acibadem 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 Abraaj Group and the Acibadem Healthcare Investment (A) .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abraaj Acibadem 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 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.