M Power Micro Finance: Early Battle for Survival SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of M Power Micro Finance: Early Battle for Survival
When M Power Micro Finance was founded in 2009 in the Indian state of Gujarat, a number of challenges in the microfinance market made it difficult for the company to survive. Just months after M Power's founding, the microfinance industry was hit by a repayment crisis that eroded both profitability and confidence in the industry. With public sentiment turning against microfinance institutions, M Power's bright growth prospects suddenly disappeared and its CEO struggled to keep the business afloat. The flow of funding into the microfinance sector dried up, and the management of funds had to be closely monitored on a monthly basis. The CEO's woes were not over: some of his business partners left the organization as the situation worsened. The company's future was uncertain. As the industry began to show signs of recovery in 2013, though, the CEO hoped to secure a financing deal and persevere. Puran Singh is affiliated with Indian Institute of Technology Mandi Kamand.
Authors :: Puran Singh, Bhargav Vishwanathan, Nupur Pavan Bang
Swot Analysis of "M Power Micro Finance: Early Battle for Survival" written by Puran Singh, Bhargav Vishwanathan, Nupur Pavan Bang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microfinance Power's facing as an external strategic factors. Some of the topics covered in M Power Micro Finance: Early Battle for Survival case study are - Strategic Management Strategies, Financial management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the M Power Micro Finance: Early Battle for Survival casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of M Power Micro Finance: Early Battle for Survival
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in M Power Micro Finance: Early Battle for Survival case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microfinance Power's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microfinance Power's 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 M Power Micro Finance: Early Battle for Survival can be done for the following purposes –
1. Strategic planning using facts provided in M Power Micro Finance: Early Battle for Survival case study
2. Improving business portfolio management of Microfinance Power's
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 Power's
Strengths M Power Micro Finance: Early Battle for Survival | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microfinance Power's in M Power Micro Finance: Early Battle for Survival Harvard Business Review case study are -
High brand equity
– Microfinance Power's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microfinance Power's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Microfinance Power's is present in almost all the verticals within the industry. This has provided firm in M Power Micro Finance: Early Battle for Survival 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.
Strong track record of project management
– Microfinance Power's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Microfinance Power's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microfinance Power's 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Microfinance Power's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Microfinance Power's 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.
Training and development
– Microfinance Power's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in M Power Micro Finance: Early Battle for Survival 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.
Cross disciplinary teams
– Horizontal connected teams at the Microfinance Power's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Microfinance Power's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Microfinance Power's 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 Power's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in M Power Micro Finance: Early Battle for Survival Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Microfinance Power's 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 Puran Singh, Bhargav Vishwanathan, Nupur Pavan Bang 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.
Organizational Resilience of Microfinance Power's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microfinance Power's 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 M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of M Power Micro Finance: Early Battle for Survival are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the M Power Micro Finance: Early Battle for Survival 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 Power's has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Microfinance Power's 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. Microfinance Power's 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.
Skills based hiring
– The stress on hiring functional specialists at Microfinance Power's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study M Power Micro Finance: Early Battle for Survival, in the dynamic environment Microfinance Power's has struggled to respond to the nimble upstart competition. Microfinance Power's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival can leverage the sales team experience to cultivate customer relationships as Microfinance Power's is planning to shift buying processes online.
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 Microfinance Power's supply chain. Even after few cautionary changes mentioned in the HBR case study - M Power Micro Finance: Early Battle for Survival, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Microfinance Power's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study M Power Micro Finance: Early Battle for Survival, is just above the industry average. Microfinance Power's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study M Power Micro Finance: Early Battle for Survival 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 Microfinance Power's 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microfinance Power's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study M Power Micro Finance: Early Battle for Survival can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Microfinance Power's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Microfinance Power's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microfinance Power's to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Microfinance Power's 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.
Opportunities M Power Micro Finance: Early Battle for Survival | 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 M Power Micro Finance: Early Battle for Survival are -
Learning at scale
– Online learning technologies has now opened space for Microfinance Power's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Microfinance Power's 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. Microfinance Power's 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.
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. Microfinance Power's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microfinance Power's is facing challenges because of the dominance of functional experts in the organization. M Power Micro Finance: Early Battle for Survival 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.
Leveraging digital technologies
– Microfinance Power's 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.
Better consumer reach
– The expansion of the 5G network will help Microfinance Power's to increase its market reach. Microfinance Power's 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.
Creating value in data economy
– The success of analytics program of Microfinance Power's has opened avenues for new revenue streams for the organization in the industry. This can help Microfinance Power's to build a more holistic ecosystem as suggested in the M Power Micro Finance: Early Battle for Survival case study. Microfinance Power's 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, Microfinance Power's 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.
Building a culture of innovation
– managers at Microfinance Power's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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 Microfinance Power's 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.
Buying journey improvements
– Microfinance Power's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. M Power Micro Finance: Early Battle for Survival 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.
Using analytics as competitive advantage
– Microfinance Power's 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 M Power Micro Finance: Early Battle for Survival - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microfinance Power's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Power's can use these opportunities to build new business models that can help the communities that Microfinance Power's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats M Power Micro Finance: Early Battle for Survival External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study M Power Micro Finance: Early Battle for Survival are -
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. Microfinance Power's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study M Power Micro Finance: Early Battle for Survival, Microfinance Power's 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 Power's 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.
Technology acceleration in Forth Industrial Revolution
– Microfinance Power's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Microfinance Power's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Microfinance Power's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Power's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Microfinance Power's.
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 Power's 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.
Regulatory challenges
– Microfinance Power's 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 Strategy & Execution industry regulations.
High dependence on third party suppliers
– Microfinance Power's 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.
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 Power's in the Strategy & Execution sector and impact the bottomline of the organization.
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 Power's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival 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 M Power Micro Finance: Early Battle for Survival 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 Power's needs to make to build a sustainable competitive advantage.
