220.127.116.11. Phase 2 Tools: Choices
The end result of all the data collection and analysis conducted during Phases 1 and 2 is to first make choices about what customer segments should be pursued and what the strategy should be to pursue them. One way to integrate the four Cs above into this analysis is with a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. Context is used for the internal factors (SW), while Channels, Customers and Competitors are integrated into the external factors (OT). As a first step in applying this analysis, the team built up SWOT analyses for both markets.
The table below summarizes the internal and external factors that the DFN value chain should take into account when thinking about its overall. The basic thinking behind a SWOT analysis is that strengths can be used to exploit opportunities and mitigate threats in the market, while the impact of weaknesses either needs to be addressed to take advantage of opportunities or minimized to reduce the potential damage from external threats. This table is a slightly different format than the typical 2 x 2 SWOT matrix. The advantage of this format is that it facilitates the integration of the internal and external factors (top row and left-hand column) discussed above into clear strategic options that could be pursued by the value chain. Although not all of the strategic options generated by the analysis can or should be pursued, this format does create a useful framework for brainstorming the full range of actions possible. This range of strategic options for the Afghan DFN value chain and the subsequent decisions made about where to focus short-term efforts is continued below.
Afghan DFN SWOT Analysis, UK & Indian Markets
Although there were a few options for pursuing the UK’s wholesale segment, the challenges of implementing this strategy were daunting and would likely require significant time and financial resources to bring to fruition. On the other hand, many of the strategies identified for India were actionable and could produce concrete results within the time frame of the project and a reasonable private sector time horizon. Although the Afghan DFN value chain did not pursue all of the potential strategies highlighted in the analysis above, key elements included:
- Forward integration: To capture the wholesale margin currently earned by Indian wholesalers, Afghan exporters decided to establish operations in major urban markets such as New Delhi, Mumbai and Ahmedabad.
- Collaboration: To accomplish this strategy, three groups of five to seven exporters created export consortia to achieve the scale they needed to meet the volume requirements of Indian customers and mitigate risk.
- Partnership with Indian investors: For two groups, joint ventures with Indian businessmen who brought capital and contacts to the table was an additional risk mitigation strategy.
- Professional managers: In Afghanistan, the consortia hired young Afghans with computer and English skills to help manage the business by keeping books and handling communications with Indian customers and counterparts who did not speak Dari.
- ↑ The internal factors are identical for both markets, while the external factors are populated based on Phase 1 and Phase 2 research.