La Ceiba: Navigating Microfinance and Relationships in Honduras (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of La Ceiba: Navigating Microfinance and Relationships in Honduras (A)
This case follows the Program Director of La Ceiba, a Honduras-based microfinance institution, as he navigates four challenging negotiation scenarios involving the organization's loan clients. Students are asked to adopt the perspective of the Program Director and to consider how they would act in these negotiation scenarios that are characterized by unclear objectives and severely asymmetric power dynamics. How should they approach negotiation situations in which the power balance is heavily in their own favor? Should they exert this power and engage in a "hard" negotiation approach? Or, are there circumstances where a "soft" negotiation approach is warranted? In addition to helping students to develop a framework about when to use soft versus hard negotiation approaches, two of the notable lessons that arise are (i) the role of apologies after misusing power, and (ii) how even "using one's power for good" can translate into paternalistic outcomes.
Authors :: Christine L. Exley, John Beshears, Alison Wood Brooks
Swot Analysis of "La Ceiba: Navigating Microfinance and Relationships in Honduras (A)" written by Christine L. Exley, John Beshears, Alison Wood Brooks includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Negotiation Ceiba facing as an external strategic factors. Some of the topics covered in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) case study are - Strategic Management Strategies, Ethics, Influence, Negotiations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the La Ceiba: Navigating Microfinance and Relationships in Honduras (A) casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
supply chains are disrupted by pandemic , geopolitical disruptions, etc
Introduction to SWOT Analysis of La Ceiba: Navigating Microfinance and Relationships in Honduras (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Negotiation Ceiba, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Negotiation Ceiba 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) can be done for the following purposes –
1. Strategic planning using facts provided in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) case study
2. Improving business portfolio management of Negotiation Ceiba
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Negotiation Ceiba
Strengths La Ceiba: Navigating Microfinance and Relationships in Honduras (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Negotiation Ceiba in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Negotiation Ceiba 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.
Successful track record of launching new products
– Negotiation Ceiba has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Negotiation Ceiba 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.
Strong track record of project management
– Negotiation Ceiba is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Negotiation Ceiba is present in almost all the verticals within the industry. This has provided firm in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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.
Sustainable margins compare to other players in Sales & Marketing industry
– La Ceiba: Navigating Microfinance and Relationships in Honduras (A) firm has clearly differentiated products in the market place. This has enabled Negotiation Ceiba to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Negotiation Ceiba to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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.
Analytics focus
– Negotiation Ceiba 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 Christine L. Exley, John Beshears, Alison Wood Brooks 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.
Learning organization
- Negotiation Ceiba 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 Negotiation Ceiba is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Negotiation Ceiba
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Negotiation Ceiba does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Negotiation Ceiba digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Negotiation Ceiba 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 lead change in Sales & Marketing field
– Negotiation Ceiba 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 Negotiation Ceiba in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Negotiation Ceiba has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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.
Weaknesses La Ceiba: Navigating Microfinance and Relationships in Honduras (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of La Ceiba: Navigating Microfinance and Relationships in Honduras (A) are -
Slow decision making process
– As mentioned earlier in the report, Negotiation Ceiba 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. Negotiation Ceiba 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.
Aligning sales with marketing
– It come across in the case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) can leverage the sales team experience to cultivate customer relationships as Negotiation Ceiba is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A), in the dynamic environment Negotiation Ceiba has struggled to respond to the nimble upstart competition. Negotiation Ceiba has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A), it seems that the employees of Negotiation Ceiba 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.
Lack of clear differentiation of Negotiation Ceiba products
– To increase the profitability and margins on the products, Negotiation Ceiba needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A), is just above the industry average. Negotiation Ceiba 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 cash cycle compare to competitors
Negotiation Ceiba 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.
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 Negotiation Ceiba supply chain. Even after few cautionary changes mentioned in the HBR case study - La Ceiba: Navigating Microfinance and Relationships in Honduras (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Negotiation Ceiba vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Negotiation Ceiba 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.
Slow to strategic competitive environment developments
– As La Ceiba: Navigating Microfinance and Relationships in Honduras (A) HBR case study mentions - Negotiation Ceiba 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.
Increasing silos among functional specialists
– The organizational structure of Negotiation Ceiba is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Negotiation Ceiba needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Negotiation Ceiba to focus more on services rather than just following the product oriented approach.
Opportunities La Ceiba: Navigating Microfinance and Relationships in Honduras (A) | 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Negotiation Ceiba 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, La Ceiba: Navigating Microfinance and Relationships in Honduras (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Negotiation Ceiba in the consumer business. Now Negotiation Ceiba can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Negotiation Ceiba in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Negotiation Ceiba 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Negotiation Ceiba to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Negotiation Ceiba to increase its market reach. Negotiation Ceiba 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 Negotiation Ceiba has opened avenues for new revenue streams for the organization in the industry. This can help Negotiation Ceiba to build a more holistic ecosystem as suggested in the La Ceiba: Navigating Microfinance and Relationships in Honduras (A) case study. Negotiation Ceiba can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Negotiation Ceiba 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Negotiation Ceiba can use these opportunities to build new business models that can help the communities that Negotiation Ceiba operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Negotiation Ceiba can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Negotiation Ceiba 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. Negotiation Ceiba 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.
Manufacturing automation
– Negotiation Ceiba can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Negotiation Ceiba 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 Negotiation Ceiba 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 Sales & Marketing segment.
Threats La Ceiba: Navigating Microfinance and Relationships in Honduras (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A) are -
Technology acceleration in Forth Industrial Revolution
– Negotiation Ceiba has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Negotiation Ceiba needs to keep up with the evolution of technology in the Sales & Marketing 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.
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 Negotiation Ceiba business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Negotiation Ceiba 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. Negotiation Ceiba can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Negotiation Ceiba 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) .
Stagnating economy with rate increase
– Negotiation Ceiba 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.
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 Negotiation Ceiba.
Shortening product life cycle
– it is one of the major threat that Negotiation Ceiba is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Negotiation Ceiba with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Negotiation Ceiba 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.
Consumer confidence and its impact on Negotiation Ceiba 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.
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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Negotiation Ceiba can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 Negotiation Ceiba needs to make to build a sustainable competitive advantage.