Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India

Mahindra and Mahindra Financial Services Limited is a non-banking finance company in India whose product portfolio includes vehicle loans, used vehicle financing, housing finance, personal loans, fixed deposits, mutual fund distribution, insurance broking, gold loans and loans for construction equipment. Catering to the rural poor across India, the company has close to 6,600 employees, mostly hired locally to serve local needs. Because it focuses on future cash flow projections and not on past credit history, and takes into consideration the integrity and character of the customer - primarily farmers, small traders and vehicle operators but also some small and medium enterprises - as well as the projected business plan, it is a good fit for poor rural Indian consumers. It bridges the gap between moneylenders, who charge exorbitant interest, and public sector banks that require collateral. In 2013, the manager of the Bijnor branch is approached by the owner of a transport firm who requests a loan to buy two more trucks to expand her business of moving goods for small pharmaceutical companies. Given that the prospective borrower has been rejected by a competing bank, should the loan to her be sanctioned? Rajeev Kumra is affiliated with Indian Institute of Management - Lucknow.

Authors :: Rajeev Kumra

Topics :: Sales & Marketing

Tags :: Strategic planning, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India" written by Rajeev Kumra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mahindra Loans facing as an external strategic factors. Some of the topics covered in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India case study are - Strategic Management Strategies, Strategic planning and Sales & Marketing.

Some of the macro environment factors that can be used to understand the Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mahindra Loans, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mahindra Loans 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India can be done for the following purposes –
1. Strategic planning using facts provided in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India case study
2. Improving business portfolio management of Mahindra Loans
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mahindra Loans

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Strengths Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Mahindra Loans in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India Harvard Business Review case study are -

Learning organization

- Mahindra Loans 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 Mahindra Loans is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– Mahindra Loans 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India - 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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.

Digital Transformation in Sales & Marketing segment

- digital transformation varies from industry to industry. For Mahindra Loans digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mahindra Loans 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.

Highly skilled collaborators

– Mahindra Loans 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

– Suppliers of Mahindra Loans in the sector have low bargaining power. Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mahindra Loans to manage not only supply disruptions but also source products at highly competitive prices.

Strong track record of project management

– Mahindra Loans is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– Mahindra Loans is one of the most innovative firm in sector. Manager in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Analytics focus

– Mahindra Loans 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 Rajeev Kumra 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.

Sustainable margins compare to other players in Sales & Marketing industry

– Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India firm has clearly differentiated products in the market place. This has enabled Mahindra Loans to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Mahindra Loans to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Mahindra Loans is present in almost all the verticals within the industry. This has provided firm in Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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.

Ability to recruit top talent

– Mahindra Loans is one of the leading recruiters in the industry. Managers in the Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India are -

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 Mahindra Loans supply chain. Even after few cautionary changes mentioned in the HBR case study - Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mahindra Loans vulnerable to further global disruptions in South East Asia.

High cash cycle compare to competitors

Mahindra Loans 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Rajeev Kumra suggests that, Mahindra Loans 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.

No frontier risks strategy

– After analyzing the HBR case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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 star products

– The top 2 products and services of the firm as mentioned in the Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra Loans has relatively successful track record of launching new products.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, it seems that the employees of Mahindra Loans 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, in the dynamic environment Mahindra Loans has struggled to respond to the nimble upstart competition. Mahindra Loans 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, firm in the HBR case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra Loans 's lucrative customers.

Products dominated business model

– Even though Mahindra Loans 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 - Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India should strive to include more intangible value offerings along with its core products and services.

Low market penetration in new markets

– Outside its home market of Mahindra Loans, firm in the HBR case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Lack of clear differentiation of Mahindra Loans products

– To increase the profitability and margins on the products, Mahindra Loans needs to provide more differentiated products than what it is currently offering in the marketplace.

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Opportunities Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India | 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India are -

Loyalty marketing

– Mahindra Loans 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

– Mahindra Loans 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mahindra Loans to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Mahindra Loans in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.

Increase in government spending

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

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Mahindra Loans can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Mahindra Loans is facing challenges because of the dominance of functional experts in the organization. Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reforming the budgeting process

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

Creating value in data economy

– The success of analytics program of Mahindra Loans has opened avenues for new revenue streams for the organization in the industry. This can help Mahindra Loans to build a more holistic ecosystem as suggested in the Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India case study. Mahindra Loans 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 Mahindra Loans 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 Mahindra Loans to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Mahindra Loans can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Mahindra Loans 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, Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Learning at scale

– Online learning technologies has now opened space for Mahindra Loans 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 Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mahindra Loans 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. Mahindra Loans 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.

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Threats Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Mahindra Loans 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India .

Consumer confidence and its impact on Mahindra Loans 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.

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

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. Mahindra Loans needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Mahindra Loans in the Sales & Marketing industry. The Sales & Marketing 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.

Technology acceleration in Forth Industrial Revolution

– Mahindra Loans has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Mahindra Loans needs to keep up with the evolution of technology in the Sales & Marketing 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.

Stagnating economy with rate increase

– Mahindra Loans 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.

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 Mahindra Loans in the Sales & Marketing sector and impact the bottomline of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mahindra Loans with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

High dependence on third party suppliers

– Mahindra Loans 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India, Mahindra Loans may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .

Shortening product life cycle

– it is one of the major threat that Mahindra Loans is facing in Sales & Marketing 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. Mahindra Loans 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.

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Weighted SWOT Analysis of Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra and Mahindra Finance Services Limited: Empowering Rural Customers in India 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 Mahindra Loans needs to make to build a sustainable competitive advantage.

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