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 - – central banks are concerned over increasing inflation, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Negotiation Ceiba 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.
Low bargaining power of suppliers
– Suppliers of Negotiation Ceiba in the sector have low bargaining power. La Ceiba: Navigating Microfinance and Relationships in Honduras (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Negotiation Ceiba to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Negotiation Ceiba is one of the leading recruiters in the industry. Managers in the La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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
– Negotiation Ceiba has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Negotiation Ceiba to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
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.
Products dominated business model
– Even though Negotiation Ceiba 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 - La Ceiba: Navigating Microfinance and Relationships in Honduras (A) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Negotiation Ceiba, firm in the HBR case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Christine L. Exley, John Beshears, Alison Wood Brooks suggests that, Negotiation Ceiba 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.
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.
Interest costs
– Compare to the competition, Negotiation Ceiba has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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 Negotiation Ceiba 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Negotiation Ceiba is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study La Ceiba: Navigating Microfinance and Relationships in Honduras (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 -
Buying journey improvements
– Negotiation Ceiba can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. La Ceiba: Navigating Microfinance and Relationships in Honduras (A) 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.
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.
Loyalty marketing
– Negotiation Ceiba 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.
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.
Leveraging digital technologies
– Negotiation Ceiba 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.
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.
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. Negotiation Ceiba can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Developing new processes and practices
– Negotiation Ceiba can develop new processes and procedures in Sales & Marketing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Negotiation Ceiba can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Negotiation Ceiba 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 Negotiation Ceiba to hire the very best people irrespective of their geographical location.
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 -
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) .
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.
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.
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 Negotiation Ceiba in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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 La Ceiba: Navigating Microfinance and Relationships in Honduras (A), Negotiation Ceiba may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Negotiation Ceiba in the Sales & Marketing industry. The Sales & Marketing 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.
Regulatory challenges
– Negotiation Ceiba 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 Sales & Marketing industry regulations.
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.
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. Negotiation Ceiba needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.