Case Study Description of Janalakshmi Financial Services' HR Dilemma
V. S. Radhakrishan, CEO of Janalakshmi Financial Services, one of India's largest urban microfinance organizations, was facing an HR dilemma. The sales force at JFS's biggest division, Retail Financial Services, which focused on the distribution of small group-based loans, was experiencing declining productivity, and a high and above-market attrition rate. Radhakrishnan knew that as a microfinance institution, JFS's success rested on the performance of its salespeople. He had directed HR to undertake a thorough review of the existing salesforce compensation scheme, and devise changes that would both inculcate a performance-oriented culture, and lower the attrition rate. He had also asked HR to find ways to align the incentives of salespeople with the firm's social mission of serving the urban poor. HR had proposed several changes to compensation policy, but Radhakrishnan was unconvinced about many of the recommendations. He needed to make quick decisions; he had to present his views on HR policy changes to the company's board of directors in a few hours.
Swot Analysis of "Janalakshmi Financial Services' HR Dilemma" written by Doug J. Chung, Radhika Kak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hr Janalakshmi facing as an external strategic factors. Some of the topics covered in Janalakshmi Financial Services' HR Dilemma case study are - Strategic Management Strategies, Employee retention, Entrepreneurial finance, Marketing, Personnel policies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Janalakshmi Financial Services' HR Dilemma casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Janalakshmi Financial Services' HR Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Janalakshmi Financial Services' HR Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hr Janalakshmi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hr Janalakshmi 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 Janalakshmi Financial Services' HR Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Janalakshmi Financial Services' HR Dilemma case study
2. Improving business portfolio management of Hr Janalakshmi
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 Hr Janalakshmi
Strengths Janalakshmi Financial Services' HR Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hr Janalakshmi in Janalakshmi Financial Services' HR Dilemma Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Hr Janalakshmi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Hr Janalakshmi is one of the most innovative firm in sector. Manager in Janalakshmi Financial Services' HR Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Hr Janalakshmi 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 Hr Janalakshmi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Janalakshmi Financial Services' HR Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Hr Janalakshmi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hr Janalakshmi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Hr Janalakshmi is one of the leading recruiters in the industry. Managers in the Janalakshmi Financial Services' HR Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Hr Janalakshmi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hr Janalakshmi 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.
Effective Research and Development (R&D)
– Hr Janalakshmi 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 Janalakshmi Financial Services' HR Dilemma - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Hr Janalakshmi 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 Doug J. Chung, Radhika Kak 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.
Operational resilience
– The operational resilience strategy in the Janalakshmi Financial Services' HR Dilemma 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.
Training and development
– Hr Janalakshmi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Janalakshmi Financial Services' HR Dilemma Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Janalakshmi Financial Services' HR Dilemma firm has clearly differentiated products in the market place. This has enabled Hr Janalakshmi to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Hr Janalakshmi to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Hr Janalakshmi is present in almost all the verticals within the industry. This has provided firm in Janalakshmi Financial Services' HR Dilemma 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.
Weaknesses Janalakshmi Financial Services' HR Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Janalakshmi Financial Services' HR Dilemma are -
Lack of clear differentiation of Hr Janalakshmi products
– To increase the profitability and margins on the products, Hr Janalakshmi needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Hr Janalakshmi 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 - Janalakshmi Financial Services' HR Dilemma should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Hr Janalakshmi 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 to strategic competitive environment developments
– As Janalakshmi Financial Services' HR Dilemma HBR case study mentions - Hr Janalakshmi 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.
Skills based hiring
– The stress on hiring functional specialists at Hr Janalakshmi 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hr Janalakshmi 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 operating costs
– Compare to the competitors, firm in the HBR case study Janalakshmi Financial Services' HR Dilemma 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 Hr Janalakshmi 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Hr Janalakshmi 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 industry using digital technology.
Need for greater diversity
– Hr Janalakshmi 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.
No frontier risks strategy
– After analyzing the HBR case study Janalakshmi Financial Services' HR Dilemma, 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 Janalakshmi Financial Services' HR Dilemma 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 Hr Janalakshmi has relatively successful track record of launching new products.
Opportunities Janalakshmi Financial Services' HR Dilemma | 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 Janalakshmi Financial Services' HR Dilemma are -
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. Hr Janalakshmi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Hr Janalakshmi in the consumer business. Now Hr Janalakshmi can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hr Janalakshmi 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, Janalakshmi Financial Services' HR Dilemma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Hr Janalakshmi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Hr Janalakshmi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Janalakshmi Financial Services' HR Dilemma 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hr Janalakshmi can use these opportunities to build new business models that can help the communities that Hr Janalakshmi operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Hr Janalakshmi to increase its market reach. Hr Janalakshmi 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
– Hr Janalakshmi 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
– Hr Janalakshmi 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 Janalakshmi Financial Services' HR Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hr Janalakshmi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Hr Janalakshmi 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. Hr Janalakshmi 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.
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 Hr Janalakshmi 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.
Creating value in data economy
– The success of analytics program of Hr Janalakshmi has opened avenues for new revenue streams for the organization in the industry. This can help Hr Janalakshmi to build a more holistic ecosystem as suggested in the Janalakshmi Financial Services' HR Dilemma case study. Hr Janalakshmi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hr Janalakshmi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Janalakshmi Financial Services' HR Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Janalakshmi Financial Services' HR Dilemma are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hr Janalakshmi 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.
Environmental challenges
– Hr Janalakshmi 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. Hr Janalakshmi can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Hr Janalakshmi 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. Hr Janalakshmi 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hr Janalakshmi 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 Janalakshmi Financial Services' HR Dilemma .
Stagnating economy with rate increase
– Hr Janalakshmi 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.
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 Hr Janalakshmi.
Increasing wage structure of Hr Janalakshmi
– 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 Hr Janalakshmi.
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.
Technology acceleration in Forth Industrial Revolution
– Hr Janalakshmi has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Hr Janalakshmi 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hr Janalakshmi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hr Janalakshmi in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Hr Janalakshmi 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.
Weighted SWOT Analysis of Janalakshmi Financial Services' HR Dilemma 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 Janalakshmi Financial Services' HR Dilemma 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 Janalakshmi Financial Services' HR Dilemma 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 Janalakshmi Financial Services' HR Dilemma 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 Janalakshmi Financial Services' HR Dilemma 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 Hr Janalakshmi needs to make to build a sustainable competitive advantage.