Credit Where Credit is Due: The Latino Community Credit Union SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Credit Where Credit is Due: The Latino Community Credit Union
Five years after its launch, the Latino Community Credit Union had made remarkable progress, garnering 40,000 members and $22 million in assets. More extraordinary was the LCCU's customer base: Hispanic immigrants, many of them undocumented. The credit union's next bold step was to consider introducing credit cards for their customers. The question was how to make it work.
Authors :: Robert N. Smith, Ellen Zienta, Gregory Fairchild
Swot Analysis of "Credit Where Credit is Due: The Latino Community Credit Union" written by Robert N. Smith, Ellen Zienta, Gregory Fairchild includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Credit Latino facing as an external strategic factors. Some of the topics covered in Credit Where Credit is Due: The Latino Community Credit Union case study are - Strategic Management Strategies, Financial management, Marketing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Credit Where Credit is Due: The Latino Community Credit Union casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , geopolitical disruptions, increasing government debt because of Covid-19 spendings,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Credit Where Credit is Due: The Latino Community Credit Union
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Credit Where Credit is Due: The Latino Community Credit Union case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Credit Latino, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Credit Latino 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 Credit Where Credit is Due: The Latino Community Credit Union can be done for the following purposes –
1. Strategic planning using facts provided in Credit Where Credit is Due: The Latino Community Credit Union case study
2. Improving business portfolio management of Credit Latino
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Credit Latino
Strengths Credit Where Credit is Due: The Latino Community Credit Union | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Credit Latino in Credit Where Credit is Due: The Latino Community Credit Union Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Credit Latino digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Credit Latino 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.
High switching costs
– The high switching costs that Credit Latino 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.
Learning organization
- Credit Latino 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 Credit Latino is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Credit Where Credit is Due: The Latino Community Credit Union Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Credit Latino has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Credit Latino 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.
Ability to recruit top talent
– Credit Latino is one of the leading recruiters in the industry. Managers in the Credit Where Credit is Due: The Latino Community Credit Union are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Credit Latino has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Credit Latino to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Credit Where Credit is Due: The Latino Community Credit Union firm has clearly differentiated products in the market place. This has enabled Credit Latino to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Credit Latino to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Credit Latino in the sector have low bargaining power. Credit Where Credit is Due: The Latino Community Credit Union has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Credit Latino to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Credit Latino has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Latino 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.
Innovation driven organization
– Credit Latino is one of the most innovative firm in sector. Manager in Credit Where Credit is Due: The Latino Community Credit Union Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Where Credit is Due: The Latino Community Credit Union | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Credit Where Credit is Due: The Latino Community Credit Union are -
Lack of clear differentiation of Credit Latino products
– To increase the profitability and margins on the products, Credit Latino needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Credit Latino 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 - Credit Where Credit is Due: The Latino Community Credit Union should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Credit Latino 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Credit Where Credit is Due: The Latino Community Credit Union, is just above the industry average. Credit Latino 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Latino has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Credit Where Credit is Due: The Latino Community Credit Union HBR case study mentions - Credit Latino 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.
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 Credit Latino supply chain. Even after few cautionary changes mentioned in the HBR case study - Credit Where Credit is Due: The Latino Community Credit Union, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Credit Latino vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Latino 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Credit Latino 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.
Capital Spending Reduction
– Even during the low interest decade, Credit Latino 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
– Credit Latino 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 Credit Where Credit is Due: The Latino Community Credit Union | 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 Credit Where Credit is Due: The Latino Community Credit Union 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. Credit Latino can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Credit Latino 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Credit Latino 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, Credit Where Credit is Due: The Latino Community Credit Union, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Credit Latino in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Credit Latino can develop new processes and procedures in Finance & Accounting 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.
Buying journey improvements
– Credit Latino can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Credit Where Credit is Due: The Latino Community Credit Union 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Credit Latino 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. Credit Latino 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Credit Latino can use these opportunities to build new business models that can help the communities that Credit Latino operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Credit Latino 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.
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 Credit Latino in the consumer business. Now Credit Latino can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Credit Latino 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 Finance & Accounting segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Credit Latino 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 Credit Latino to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Credit Latino is facing challenges because of the dominance of functional experts in the organization. Credit Where Credit is Due: The Latino Community Credit Union 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.
Threats Credit Where Credit is Due: The Latino Community Credit Union External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Credit Where Credit is Due: The Latino Community Credit Union are -
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 Credit Latino in the Finance & Accounting sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Credit Latino can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Credit Latino 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 Finance & Accounting industry regulations.
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. Credit Latino needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Credit Latino 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Credit Where Credit is Due: The Latino Community Credit Union, Credit Latino may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Credit Latino business can come under increasing regulations regarding data privacy, data security, etc.
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
– Credit Latino has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Credit Latino needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Credit Latino.
High dependence on third party suppliers
– Credit Latino 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Credit Latino with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Credit Latino 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. Credit Latino can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Where Credit is Due: The Latino Community Credit Union 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 Credit Latino needs to make to build a sustainable competitive advantage.
