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Bandhan (A): Advancing Financial Inclusion in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Bandhan (A): Advancing Financial Inclusion in India


The case is set at a time when Bandhan, the largest microfinance institution (MFI) in India and the largest non-deposit taking MFI in the world, was about to embark on an organizational transformation that would convert it into a mainstream bank. In July 2013, supported by a Geneva-based investor, Bandhan had applied for a banking license to expand its operations by leveraging its network. And in May 2014 the Reserve Bank of India (RBI) had granted the license to Bandhan, making it the first MFI in the country to win a bank license, and also the youngest entity to be allowed to enter the banking space in India. Established in 2001 by Chandra Shekhar Ghosh to address the dual objective of poverty alleviation and empowerment of women, Bandhan had grown by 2013 to 2,016 branches across 22 states and union territories within India. With over 5 million borrowers and total outstanding loans of INR 57 billion (~US$1 billion), it had zero non-performing loans. Ghosh had ambitious growth plans focused on the rural sector. Bandhan seemed to have built the right capabilities to be successful as an MFI. The case allows for a rich discussion about the new capabilities that Bandhan would require as it shifted from pure MFI to banking entity and how it should go about acquiring those capabilities. Was it preparing well to deal with the challenge of entering, surviving and growing in the banking industry while continuing to serve and grow in the MFI space? Could it develop a unique and innovative model to help it straddle both worlds? With this license, Bandhan had been offered an opportunity to re-create the entire banking edifice in India. Participants have the opportunity to analyse the key issues in the case and attempt to answer the question playing on everyone's mind - how would Bandhan deliver on the goals of financial inclusion?

Authors :: Charles Dhanaraj, Geetika Shah

Topics :: Strategy & Execution

Tags :: Change management, Emerging markets, Entrepreneurial finance, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Bandhan (A): Advancing Financial Inclusion in India" written by Charles Dhanaraj, Geetika Shah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bandhan Mfi facing as an external strategic factors. Some of the topics covered in Bandhan (A): Advancing Financial Inclusion in India case study are - Strategic Management Strategies, Change management, Emerging markets, Entrepreneurial finance and Strategy & Execution.


Some of the macro environment factors that can be used to understand the Bandhan (A): Advancing Financial Inclusion in India casestudy better are - – wage bills are increasing, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing transportation and logistics costs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, etc



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Introduction to SWOT Analysis of Bandhan (A): Advancing Financial Inclusion in India


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bandhan (A): Advancing Financial Inclusion in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bandhan Mfi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bandhan Mfi 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 Bandhan (A): Advancing Financial Inclusion in India can be done for the following purposes –
1. Strategic planning using facts provided in Bandhan (A): Advancing Financial Inclusion in India case study
2. Improving business portfolio management of Bandhan Mfi
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 Bandhan Mfi




Strengths Bandhan (A): Advancing Financial Inclusion in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Bandhan Mfi in Bandhan (A): Advancing Financial Inclusion in India Harvard Business Review case study are -

High switching costs

– The high switching costs that Bandhan Mfi 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.

Effective Research and Development (R&D)

– Bandhan Mfi 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 Bandhan (A): Advancing Financial Inclusion 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.

Digital Transformation in Strategy & Execution segment

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

Ability to recruit top talent

– Bandhan Mfi is one of the leading recruiters in the industry. Managers in the Bandhan (A): Advancing Financial Inclusion 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.

Training and development

– Bandhan Mfi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bandhan (A): Advancing Financial Inclusion in India 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.

Learning organization

- Bandhan Mfi 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 Bandhan Mfi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bandhan (A): Advancing Financial Inclusion in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Analytics focus

– Bandhan Mfi 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 Charles Dhanaraj, Geetika Shah 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 Strategy & Execution industry

– Bandhan (A): Advancing Financial Inclusion in India firm has clearly differentiated products in the market place. This has enabled Bandhan Mfi to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bandhan Mfi to invest into research and development (R&D) and innovation.

Organizational Resilience of Bandhan Mfi

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bandhan Mfi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy in the Bandhan (A): Advancing Financial Inclusion 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.

High brand equity

– Bandhan Mfi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bandhan Mfi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– Bandhan Mfi is one of the most innovative firm in sector. Manager in Bandhan (A): Advancing Financial Inclusion in India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.






Weaknesses Bandhan (A): Advancing Financial Inclusion in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Bandhan (A): Advancing Financial Inclusion in India are -

No frontier risks strategy

– After analyzing the HBR case study Bandhan (A): Advancing Financial Inclusion in India, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.

Increasing silos among functional specialists

– The organizational structure of Bandhan Mfi is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bandhan Mfi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bandhan Mfi to focus more on services rather than just following the product oriented approach.

High cash cycle compare to competitors

Bandhan Mfi 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.

Slow to strategic competitive environment developments

– As Bandhan (A): Advancing Financial Inclusion in India HBR case study mentions - Bandhan Mfi 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.

Slow decision making process

– As mentioned earlier in the report, Bandhan Mfi 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. Bandhan Mfi 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 bargaining power of channel partners

– Because of the regulatory requirements, Charles Dhanaraj, Geetika Shah suggests that, Bandhan Mfi 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Bandhan (A): Advancing Financial Inclusion in India, it seems that the employees of Bandhan Mfi 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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Bandhan (A): Advancing Financial Inclusion 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 Bandhan Mfi has relatively successful track record of launching new products.

Skills based hiring

– The stress on hiring functional specialists at Bandhan Mfi 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.

Low market penetration in new markets

– Outside its home market of Bandhan Mfi, firm in the HBR case study Bandhan (A): Advancing Financial Inclusion in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Workers concerns about automation

– As automation is fast increasing in the segment, Bandhan Mfi 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.




Opportunities Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion in India are -

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 Bandhan Mfi in the consumer business. Now Bandhan Mfi can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Bandhan Mfi is facing challenges because of the dominance of functional experts in the organization. Bandhan (A): Advancing Financial Inclusion 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Bandhan Mfi 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.

Finding new ways to collaborate

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

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bandhan Mfi 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 Bandhan Mfi to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Bandhan Mfi 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, Bandhan (A): Advancing Financial Inclusion 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.

Better consumer reach

– The expansion of the 5G network will help Bandhan Mfi to increase its market reach. Bandhan Mfi 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.

Leveraging digital technologies

– Bandhan Mfi can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Using analytics as competitive advantage

– Bandhan Mfi 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 Bandhan (A): Advancing Financial Inclusion in India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bandhan Mfi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Bandhan Mfi 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.

Reforming the budgeting process

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

Increase in government spending

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

Learning at scale

– Online learning technologies has now opened space for Bandhan Mfi 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.




Threats Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion in India are -

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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.

Increasing wage structure of Bandhan Mfi

– 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 Bandhan Mfi.

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. Bandhan Mfi 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, Bandhan Mfi 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 Bandhan (A): Advancing Financial Inclusion in India .

High dependence on third party suppliers

– Bandhan Mfi 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.

Environmental challenges

– Bandhan Mfi 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. Bandhan Mfi can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.

Easy access to finance

– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bandhan Mfi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Consumer confidence and its impact on Bandhan Mfi 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 Bandhan Mfi 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. Bandhan Mfi needs to understand the core reasons impacting the Strategy & Execution 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 Bandhan Mfi in the Strategy & Execution industry. The Strategy & Execution 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.

Shortening product life cycle

– it is one of the major threat that Bandhan Mfi is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.




Weighted SWOT Analysis of Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion 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 Bandhan (A): Advancing Financial Inclusion 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 Bandhan Mfi needs to make to build a sustainable competitive advantage.



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