Case Study Description of PlaNet Finance: Broad Scope in Microfinance
PlaNet Finance was a French NGO providing technical support and training services to microfinance institutions (i.e., institutions providing financial services to the poor) and other microfinance actors, rating of microfinance institutions and management, and advisory services to microfinance investors and investment funds. Furthermore, it was creating a network of microfinance banks through a microfinance holding company. However, in a context of rapid change and explosive growth of the microfinance sector, Jacques Attali, the founder and president, wondered whether PlaNet Finance's scope was sufficiently broad to fulfill its mission or, on the contrary, whether it needed to be narrowed in order to eliminate organizational challenges and external perceptions of conflicts of interest.
Swot Analysis of "PlaNet Finance: Broad Scope in Microfinance" written by Andrei Hagiu, Elena Corsi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microfinance Planet facing as an external strategic factors. Some of the topics covered in PlaNet Finance: Broad Scope in Microfinance case study are - Strategic Management Strategies, Growth strategy, Social enterprise and Strategy & Execution.
Some of the macro environment factors that can be used to understand the PlaNet Finance: Broad Scope in Microfinance casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of PlaNet Finance: Broad Scope in Microfinance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PlaNet Finance: Broad Scope in Microfinance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microfinance Planet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microfinance Planet 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 PlaNet Finance: Broad Scope in Microfinance can be done for the following purposes –
1. Strategic planning using facts provided in PlaNet Finance: Broad Scope in Microfinance case study
2. Improving business portfolio management of Microfinance Planet
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Microfinance Planet
Strengths PlaNet Finance: Broad Scope in Microfinance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microfinance Planet in PlaNet Finance: Broad Scope in Microfinance Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Microfinance Planet 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 Microfinance Planet 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 Microfinance Planet in the sector have low bargaining power. PlaNet Finance: Broad Scope in Microfinance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microfinance Planet to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Microfinance Planet is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– PlaNet Finance: Broad Scope in Microfinance firm has clearly differentiated products in the market place. This has enabled Microfinance Planet to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Microfinance Planet to invest into research and development (R&D) and innovation.
Learning organization
- Microfinance Planet 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 Microfinance Planet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PlaNet Finance: Broad Scope in Microfinance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Microfinance Planet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microfinance Planet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Microfinance Planet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Microfinance Planet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microfinance Planet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Microfinance Planet 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 Andrei Hagiu, Elena Corsi 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.
Effective Research and Development (R&D)
– Microfinance Planet 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 PlaNet Finance: Broad Scope in Microfinance - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Microfinance Planet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microfinance Planet 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.
Operational resilience
– The operational resilience strategy in the PlaNet Finance: Broad Scope in Microfinance 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.
Weaknesses PlaNet Finance: Broad Scope in Microfinance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PlaNet Finance: Broad Scope in Microfinance are -
Workers concerns about automation
– As automation is fast increasing in the segment, Microfinance Planet 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.
Skills based hiring
– The stress on hiring functional specialists at Microfinance Planet 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microfinance Planet is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study PlaNet Finance: Broad Scope in Microfinance can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As PlaNet Finance: Broad Scope in Microfinance HBR case study mentions - Microfinance Planet 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study PlaNet Finance: Broad Scope in Microfinance, in the dynamic environment Microfinance Planet has struggled to respond to the nimble upstart competition. Microfinance Planet has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Microfinance Planet 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.
Aligning sales with marketing
– It come across in the case study PlaNet Finance: Broad Scope in Microfinance that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case PlaNet Finance: Broad Scope in Microfinance can leverage the sales team experience to cultivate customer relationships as Microfinance Planet is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrei Hagiu, Elena Corsi suggests that, Microfinance Planet 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.
Increasing silos among functional specialists
– The organizational structure of Microfinance Planet is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Microfinance Planet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microfinance Planet to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the PlaNet Finance: Broad Scope in Microfinance 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 Microfinance Planet has relatively successful track record of launching new products.
Need for greater diversity
– Microfinance Planet 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.
Opportunities PlaNet Finance: Broad Scope in Microfinance | 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 PlaNet Finance: Broad Scope in Microfinance 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. Microfinance Planet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Microfinance Planet 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 PlaNet Finance: Broad Scope in Microfinance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microfinance Planet to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microfinance Planet is facing challenges because of the dominance of functional experts in the organization. PlaNet Finance: Broad Scope in Microfinance 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.
Learning at scale
– Online learning technologies has now opened space for Microfinance Planet 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 Microfinance Planet 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 Microfinance Planet to hire the very best people irrespective of their geographical location.
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 Microfinance Planet in the consumer business. Now Microfinance Planet can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Microfinance Planet can develop new processes and procedures in Strategy & Execution 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Microfinance Planet in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution 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, Microfinance Planet can use these opportunities to build new business models that can help the communities that Microfinance Planet operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Microfinance Planet 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, PlaNet Finance: Broad Scope in Microfinance, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Microfinance Planet 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 Microfinance Planet has opened avenues for new revenue streams for the organization in the industry. This can help Microfinance Planet to build a more holistic ecosystem as suggested in the PlaNet Finance: Broad Scope in Microfinance case study. Microfinance Planet can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Microfinance Planet can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats PlaNet Finance: Broad Scope in Microfinance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PlaNet Finance: Broad Scope in Microfinance are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microfinance Planet 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 PlaNet Finance: Broad Scope in Microfinance .
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 Microfinance Planet in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Microfinance Planet is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Microfinance Planet 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.
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. Microfinance Planet needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Microfinance Planet 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. Microfinance Planet can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Microfinance Planet has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Microfinance Planet needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Microfinance Planet 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 wage structure of Microfinance Planet
– 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 Microfinance Planet.
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 Microfinance Planet business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study PlaNet Finance: Broad Scope in Microfinance, Microfinance Planet may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Microfinance Planet 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Microfinance Planet with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of PlaNet Finance: Broad Scope in Microfinance 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 PlaNet Finance: Broad Scope in Microfinance 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 PlaNet Finance: Broad Scope in Microfinance 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 PlaNet Finance: Broad Scope in Microfinance 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 PlaNet Finance: Broad Scope in Microfinance 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 Microfinance Planet needs to make to build a sustainable competitive advantage.