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 - – technology disruption, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
increasing commodity prices, central banks are concerned over increasing inflation, 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Abraaj Group and the Acibadem Healthcare Investment (A) firm has clearly differentiated products in the market place. This has enabled Abraaj Acibadem to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Abraaj Acibadem to invest into research and development (R&D) and innovation.
Innovation driven organization
– Abraaj Acibadem is one of the most innovative firm in sector. Manager in The Abraaj Group and the Acibadem Healthcare Investment (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Cross disciplinary teams
– Horizontal connected teams at the Abraaj Acibadem are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Abraaj Acibadem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Abraaj Acibadem 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 The Abraaj Group and the Acibadem Healthcare Investment (A) - 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 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.
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.
Ability to lead change in Finance & Accounting field
– Abraaj Acibadem 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 Abraaj Acibadem in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
No frontier risks strategy
– After analyzing the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Abraaj Acibadem supply chain. Even after few cautionary changes mentioned in the HBR case study - The Abraaj Group and the Acibadem Healthcare Investment (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abraaj Acibadem vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Abraaj Acibadem 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 cash cycle compare to competitors
Abraaj Acibadem has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
Slow to strategic competitive environment developments
– As The Abraaj Group and the Acibadem Healthcare Investment (A) HBR case study mentions - Abraaj Acibadem takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study The Abraaj Group and the Acibadem Healthcare Investment (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Abraaj Acibadem 's lucrative customers.
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.
Lack of clear differentiation of Abraaj Acibadem products
– To increase the profitability and margins on the products, Abraaj Acibadem needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Abraaj Acibadem has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Abraaj Acibadem even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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 -
Creating value in data economy
– The success of analytics program of Abraaj Acibadem has opened avenues for new revenue streams for the organization in the industry. This can help Abraaj Acibadem to build a more holistic ecosystem as suggested in the The Abraaj Group and the Acibadem Healthcare Investment (A) case study. Abraaj Acibadem can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abraaj Acibadem can use these opportunities to build new business models that can help the communities that Abraaj Acibadem operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Abraaj Acibadem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Loyalty marketing
– Abraaj Acibadem has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abraaj Acibadem in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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.
Leveraging digital technologies
– Abraaj Acibadem 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.
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.
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.
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 -
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Abraaj Acibadem is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Abraaj Acibadem in the Finance & Accounting 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 The Abraaj Group and the Acibadem Healthcare Investment (A), Abraaj Acibadem may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Abraaj Acibadem
– 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 Abraaj Acibadem.
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.
High dependence on third party suppliers
– Abraaj Acibadem high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
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.
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.
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.
