QIWI (QIWI) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for QIWI (United States)

Based on various researches at Oak Spring University , QIWI is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, geopolitical disruptions, there is backlash against globalization, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of QIWI

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that QIWI can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the QIWI, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which QIWI 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of QIWI can be done for the following purposes –
1. Strategic planning of QIWI
2. Improving business portfolio management of QIWI
3. Assessing feasibility of the new initiative in United States
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of QIWI

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Strengths of QIWI | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of QIWI are -

High brand equity

– QIWI has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled QIWI to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Organizational Resilience of QIWI

– The covid-19 pandemic has put organizational resilience at the centre of everthing QIWI does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Highly skilled collaborators

– QIWI has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of QIWI have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– QIWI has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – QIWI staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of QIWI in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– QIWI is one of the leading players in the Business Services industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.

Operational resilience

– The operational resilience strategy of QIWI comprises – understanding the underlying the factors in the Business Services 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.

Sustainable margins compare to other players in Business Services industry

– QIWI has clearly differentiated products in the market place. This has enabled QIWI to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped QIWI to invest into research and development (R&D) and innovation.

Diverse revenue streams

– QIWI is present in almost all the verticals within the Business Services industry. This has provided QIWI 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.

Digital Transformation in Business Services industry

- digital transformation varies from industry to industry. For QIWI digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. QIWI has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Learning organization

- QIWI 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 QIWI is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at QIWI emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– QIWI has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. QIWI 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.

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Weaknesses of QIWI | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of QIWI are -

Ability to respond to the competition

– As the decision making is very deliberative at QIWI, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. QIWI has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, QIWI has high operating costs in the Business Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract QIWI lucrative customers.

Slow to strategic competitive environment developments

– As QIWI is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.

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 QIWI supply chain. Even after few cautionary changes, QIWI is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left QIWI vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

– The organizational structure of QIWI is dominated by functional specialists. It is not different from other players in the Business Services industry, but QIWI needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help QIWI to focus more on services in the Business Services industry rather than just following the product oriented approach.

High bargaining power of channel partners in Business Services industry

– because of the regulatory requirements in United States, QIWI 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 Business Services industry.

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at QIWI 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.

Low market penetration in new markets

– Outside its home market of United States, QIWI needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High dependence on QIWI ‘s star products

– The top 2 products and services of QIWI still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though QIWI has relatively successful track record of launching new products.

No frontier risks strategy

– From the 10K / annual statement of QIWI, it seems that company is thinking out the frontier risks that can impact Business Services industry. 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.

Capital Spending Reduction

– Even during the low interest decade, QIWI 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 Business Services industry using digital technology.

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QIWI Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of QIWI are -

Using analytics as competitive advantage

– QIWI has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled QIWI to build a competitive advantage using analytics. The analytics driven competitive advantage can help QIWI to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, QIWI can use these opportunities to build new business models that can help the communities that QIWI operates in. Secondly it can use opportunities from government spending in Business Services sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects QIWI can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for QIWI 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 QIWI to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, QIWI is facing challenges because of the dominance of functional experts in the organization. QIWI can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, QIWI 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 QIWI to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help QIWI to increase its market reach. QIWI 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.

Loyalty marketing

– QIWI 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for QIWI in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.

Learning at scale

– Online learning technologies has now opened space for QIWI 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 Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. QIWI 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. QIWI 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.

Creating value in data economy

– The success of analytics program of QIWI has opened avenues for new revenue streams for the organization in Business Services industry. This can help QIWI to build a more holistic ecosystem for QIWI products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– QIWI can improve the customer journey of consumers in the Business Services industry by using analytics and artificial intelligence. It 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.

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Threats QIWI External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of QIWI are -

Stagnating economy with rate increase

– QIWI 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 Business Services industry.

Shortening product life cycle

– it is one of the major threat that QIWI is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. QIWI 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.

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 QIWI business can come under increasing regulations regarding data privacy, data security, etc.

Regulatory challenges

– QIWI 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 Business Services industry regulations.

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.

Easy access to finance

– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. QIWI can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. QIWI needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.

Environmental challenges

– QIWI 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. QIWI can take advantage of this fund but it will also bring new competitors in the Business Services industry.

Increasing wage structure of QIWI

– 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 QIWI.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for QIWI in Business Services industry. The Business Services 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, QIWI may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.

High dependence on third party suppliers

– QIWI 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.

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Weighted SWOT Analysis of QIWI Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at QIWI 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 QIWI 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 QIWI 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 QIWI 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 QIWI needs to make to build a sustainable competitive advantage.

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