Case Study Description of MasterCard: Driving Financial Inclusion
MasterCard CEO Ajay Banga was investing significant time and attention to increase financial inclusion among individuals with historically no access to banking or financial services in countries around the world with large underserved populations. The effort included partnerships with governments and banks to issue MasterCard branded debit cards to millions of individuals. Financial inclusion could potentially help these individuals by increasing financial literacy, building credit records, improving savings rates, providing access to loans and other financial products, and, in general, by increasing the economic opportunities for these newly banked consumers. And by adding more customers, MasterCard potentially could also grow its bottom line. Financial inclusion raised questions for MasterCard. Was the management time and attention well spent given the low returns expected from adding millions of mostly very poor customers? What risks might MasterCard encounter-particularly in some countries where citizens resented their government partnering with and providing personal data to a large U.S. company.
Swot Analysis of "MasterCard: Driving Financial Inclusion" written by Sunil Gupta, Rajiv Lal, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mastercard Inclusion facing as an external strategic factors. Some of the topics covered in MasterCard: Driving Financial Inclusion case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the MasterCard: Driving Financial Inclusion casestudy better are - – there is backlash against globalization, supply chains are disrupted by pandemic , increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
increasing commodity prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of MasterCard: Driving Financial Inclusion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MasterCard: Driving Financial Inclusion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mastercard Inclusion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mastercard Inclusion 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 MasterCard: Driving Financial Inclusion can be done for the following purposes –
1. Strategic planning using facts provided in MasterCard: Driving Financial Inclusion case study
2. Improving business portfolio management of Mastercard Inclusion
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 Mastercard Inclusion
Strengths MasterCard: Driving Financial Inclusion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mastercard Inclusion in MasterCard: Driving Financial Inclusion Harvard Business Review case study are -
Strong track record of project management
– Mastercard Inclusion is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Mastercard Inclusion is one of the leading recruiters in the industry. Managers in the MasterCard: Driving Financial Inclusion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Mastercard Inclusion is one of the most innovative firm in sector. Manager in MasterCard: Driving Financial Inclusion 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
– Mastercard Inclusion 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 MasterCard: Driving Financial Inclusion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mastercard Inclusion 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 MasterCard: Driving Financial Inclusion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Mastercard Inclusion 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 Mastercard Inclusion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MasterCard: Driving Financial Inclusion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Mastercard Inclusion 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 Sunil Gupta, Rajiv Lal, Natalie Kindred 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.
High switching costs
– The high switching costs that Mastercard Inclusion 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.
Sustainable margins compare to other players in Sales & Marketing industry
– MasterCard: Driving Financial Inclusion firm has clearly differentiated products in the market place. This has enabled Mastercard Inclusion to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Mastercard Inclusion to invest into research and development (R&D) and innovation.
High brand equity
– Mastercard Inclusion has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mastercard Inclusion to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Mastercard Inclusion 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 Mastercard Inclusion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Mastercard Inclusion in the sector have low bargaining power. MasterCard: Driving Financial Inclusion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mastercard Inclusion to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses MasterCard: Driving Financial Inclusion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MasterCard: Driving Financial Inclusion are -
High bargaining power of channel partners
– Because of the regulatory requirements, Sunil Gupta, Rajiv Lal, Natalie Kindred suggests that, Mastercard Inclusion 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.
Skills based hiring
– The stress on hiring functional specialists at Mastercard Inclusion 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.
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 Mastercard Inclusion supply chain. Even after few cautionary changes mentioned in the HBR case study - MasterCard: Driving Financial Inclusion, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mastercard Inclusion vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Mastercard Inclusion, firm in the HBR case study MasterCard: Driving Financial Inclusion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Mastercard Inclusion is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Mastercard Inclusion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mastercard Inclusion to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Mastercard Inclusion 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.
Lack of clear differentiation of Mastercard Inclusion products
– To increase the profitability and margins on the products, Mastercard Inclusion needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Mastercard Inclusion 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.
Interest costs
– Compare to the competition, Mastercard Inclusion has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Mastercard Inclusion 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. Mastercard Inclusion 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MasterCard: Driving Financial Inclusion 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 Mastercard Inclusion has relatively successful track record of launching new products.
Opportunities MasterCard: Driving Financial Inclusion | 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 MasterCard: Driving Financial Inclusion are -
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. Mastercard Inclusion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mastercard Inclusion can use these opportunities to build new business models that can help the communities that Mastercard Inclusion operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Developing new processes and practices
– Mastercard Inclusion can develop new processes and procedures in Sales & Marketing 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.
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. Mastercard Inclusion 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. Mastercard Inclusion 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.
Loyalty marketing
– Mastercard Inclusion 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.
Creating value in data economy
– The success of analytics program of Mastercard Inclusion has opened avenues for new revenue streams for the organization in the industry. This can help Mastercard Inclusion to build a more holistic ecosystem as suggested in the MasterCard: Driving Financial Inclusion case study. Mastercard Inclusion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mastercard Inclusion 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.
Learning at scale
– Online learning technologies has now opened space for Mastercard Inclusion 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mastercard Inclusion 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 Mastercard Inclusion to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Mastercard Inclusion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MasterCard: Driving Financial Inclusion 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, Mastercard Inclusion 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, MasterCard: Driving Financial Inclusion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mastercard Inclusion is facing challenges because of the dominance of functional experts in the organization. MasterCard: Driving Financial Inclusion 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mastercard Inclusion 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.
Threats MasterCard: Driving Financial Inclusion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MasterCard: Driving Financial Inclusion are -
Technology acceleration in Forth Industrial Revolution
– Mastercard Inclusion has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Mastercard Inclusion 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.
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. Mastercard Inclusion needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mastercard Inclusion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MasterCard: Driving Financial Inclusion, Mastercard Inclusion 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mastercard Inclusion 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.
Consumer confidence and its impact on Mastercard Inclusion 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mastercard Inclusion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Mastercard Inclusion 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 Sales & Marketing industry regulations.
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 Mastercard Inclusion.
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 Mastercard Inclusion in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– Mastercard Inclusion 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. Mastercard Inclusion can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Mastercard Inclusion
– 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 Mastercard Inclusion.
Stagnating economy with rate increase
– Mastercard Inclusion 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.
Weighted SWOT Analysis of MasterCard: Driving Financial Inclusion 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 MasterCard: Driving Financial Inclusion 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 MasterCard: Driving Financial Inclusion 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 MasterCard: Driving Financial Inclusion 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 MasterCard: Driving Financial Inclusion 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 Mastercard Inclusion needs to make to build a sustainable competitive advantage.