Case Study Description of bKash: Financial Technology Innovation for Emerging Markets
The founder of bKash Limited (bKash), a successful mobile financial services (MFS) model pioneered in Bangladesh, built the company from scratch, targeting services at the lower socioeconomic segment of society and eventually acquiring 26 million customers. bKash has had a positive impact on the lives of countless poor people and has gained worldwide recognition for its innovative business model. The model required close collaboration with telecommunications operators, banks, non-governmental organizations, and regulators. In particular, the Bangladesh central bank supported the venture, allowing experimentation in MFS to address poverty through financial inclusion. By the end of 2016, the founder was concerned about future regulations and looking to strengthen the foundation of his disruptive business to make it more robust. How could the company continue to grow while maintaining its financial inclusion objective? The authors Ishtiaq P Mahmood, Marleen Dieleman, and Narmin Tartila are affiliated with National University of Singapore.
Swot Analysis of "bKash: Financial Technology Innovation for Emerging Markets" written by Ishtiaq Mahmood, Marleen Dieleman, Narmin Tartila includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bkash Mfs facing as an external strategic factors. Some of the topics covered in bKash: Financial Technology Innovation for Emerging Markets case study are - Strategic Management Strategies, Innovation, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the bKash: Financial Technology Innovation for Emerging Markets casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, technology disruption,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of bKash: Financial Technology Innovation for Emerging Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in bKash: Financial Technology Innovation for Emerging Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bkash Mfs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bkash Mfs 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 bKash: Financial Technology Innovation for Emerging Markets can be done for the following purposes –
1. Strategic planning using facts provided in bKash: Financial Technology Innovation for Emerging Markets case study
2. Improving business portfolio management of Bkash Mfs
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bkash Mfs
Strengths bKash: Financial Technology Innovation for Emerging Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bkash Mfs in bKash: Financial Technology Innovation for Emerging Markets Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Bkash Mfs 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.
Low bargaining power of suppliers
– Suppliers of Bkash Mfs in the sector have low bargaining power. bKash: Financial Technology Innovation for Emerging Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bkash Mfs to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Bkash Mfs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bkash Mfs 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– bKash: Financial Technology Innovation for Emerging Markets firm has clearly differentiated products in the market place. This has enabled Bkash Mfs to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Bkash Mfs to invest into research and development (R&D) and innovation.
High brand equity
– Bkash Mfs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bkash Mfs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Bkash Mfs 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 Bkash Mfs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Bkash Mfs 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 Bkash Mfs is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in bKash: Financial Technology Innovation for Emerging Markets Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Bkash Mfs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bkash Mfs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Bkash Mfs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Bkash Mfs 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 Ishtiaq Mahmood, Marleen Dieleman, Narmin Tartila can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the bKash: Financial Technology Innovation for Emerging Markets 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.
Successful track record of launching new products
– Bkash Mfs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bkash Mfs 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.
Weaknesses bKash: Financial Technology Innovation for Emerging Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of bKash: Financial Technology Innovation for Emerging Markets are -
Products dominated business model
– Even though Bkash Mfs 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 - bKash: Financial Technology Innovation for Emerging Markets should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bkash Mfs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study bKash: Financial Technology Innovation for Emerging Markets 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 bKash: Financial Technology Innovation for Emerging Markets HBR case study mentions - Bkash Mfs 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 bargaining power of channel partners
– Because of the regulatory requirements, Ishtiaq Mahmood, Marleen Dieleman, Narmin Tartila suggests that, Bkash Mfs 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.
Skills based hiring
– The stress on hiring functional specialists at Bkash Mfs 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.
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 Bkash Mfs supply chain. Even after few cautionary changes mentioned in the HBR case study - bKash: Financial Technology Innovation for Emerging Markets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bkash Mfs vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Bkash Mfs is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bkash Mfs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bkash Mfs to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study bKash: Financial Technology Innovation for Emerging Markets, it seems that the employees of Bkash Mfs 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.
Slow decision making process
– As mentioned earlier in the report, Bkash Mfs 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. Bkash Mfs 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.
No frontier risks strategy
– After analyzing the HBR case study bKash: Financial Technology Innovation for Emerging Markets, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Lack of clear differentiation of Bkash Mfs products
– To increase the profitability and margins on the products, Bkash Mfs needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities bKash: Financial Technology Innovation for Emerging Markets | 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 bKash: Financial Technology Innovation for Emerging Markets are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bkash Mfs in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Bkash Mfs has opened avenues for new revenue streams for the organization in the industry. This can help Bkash Mfs to build a more holistic ecosystem as suggested in the bKash: Financial Technology Innovation for Emerging Markets case study. Bkash Mfs 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, Bkash Mfs 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.
Manufacturing automation
– Bkash Mfs can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Building a culture of innovation
– managers at Bkash Mfs 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 Leadership & Managing People segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Bkash Mfs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Bkash Mfs has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bkash Mfs is facing challenges because of the dominance of functional experts in the organization. bKash: Financial Technology Innovation for Emerging Markets 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bkash Mfs can use these opportunities to build new business models that can help the communities that Bkash Mfs operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Better consumer reach
– The expansion of the 5G network will help Bkash Mfs to increase its market reach. Bkash Mfs 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.
Using analytics as competitive advantage
– Bkash Mfs 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 bKash: Financial Technology Innovation for Emerging Markets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bkash Mfs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Bkash Mfs 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.
Leveraging digital technologies
– Bkash Mfs 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.
Threats bKash: Financial Technology Innovation for Emerging Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study bKash: Financial Technology Innovation for Emerging Markets are -
Stagnating economy with rate increase
– Bkash Mfs 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 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bkash Mfs in the Leadership & Managing People industry. The Leadership & Managing People 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.
Consumer confidence and its impact on Bkash Mfs 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bkash Mfs 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 bKash: Financial Technology Innovation for Emerging Markets .
Increasing wage structure of Bkash Mfs
– 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 Bkash Mfs.
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 Bkash Mfs business can come under increasing regulations regarding data privacy, data security, etc.
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 Bkash Mfs in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Bkash Mfs.
Environmental challenges
– Bkash Mfs 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. Bkash Mfs can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Bkash Mfs 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 Leadership & Managing People industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study bKash: Financial Technology Innovation for Emerging Markets, Bkash Mfs may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Weighted SWOT Analysis of bKash: Financial Technology Innovation for Emerging Markets 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 bKash: Financial Technology Innovation for Emerging Markets 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 bKash: Financial Technology Innovation for Emerging Markets 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 bKash: Financial Technology Innovation for Emerging Markets 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 bKash: Financial Technology Innovation for Emerging Markets 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 Bkash Mfs needs to make to build a sustainable competitive advantage.
