Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value

Since the mid-1990s, the number of microfinance institutions (MFIs) has grown tremendously, with more than 10,000 worldwide varying in size and approach. Despite their continued growth and variety, the value of MFIs has been hotly debated. Furthermore, managers and founders of MFIs have also faced the challenge of balancing social and financial objectives and understanding effective ways of evaluating their organization's effectiveness. Hence, in this article we closely examine the operations of three distinct types of MFIs and offer a framework of how they collectively create value, with each playing a unique role in a symbiotic relationship: Namaste, an interactor; Kiva, a connector; and Accion, an institutionalizer. Interactors build relationships with clients and facilitate the flow of information to connectors and institutionalizers that disseminate this data to capital markets, build confidence, and fuel capital flow into the MF industry. The latter disseminates innovation and best practices. Thus, it is critical that each MFI recognizes its symbiotic role and evaluate itself accordingly instead of spreading itself across roles.

Authors :: Kelly Armstrong, Mujtaba Ahsan, Chamu Sundaramurthy

Topics :: Global Business

Tags :: International business, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value" written by Kelly Armstrong, Mujtaba Ahsan, Chamu Sundaramurthy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mfis Institutionalizers facing as an external strategic factors. Some of the topics covered in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value case study are - Strategic Management Strategies, International business and Global Business.

Some of the macro environment factors that can be used to understand the Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing energy prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mfis Institutionalizers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mfis Institutionalizers 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value can be done for the following purposes –
1. Strategic planning using facts provided in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value case study
2. Improving business portfolio management of Mfis Institutionalizers
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mfis Institutionalizers

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Strengths Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Mfis Institutionalizers in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value Harvard Business Review case study are -

Learning organization

- Mfis Institutionalizers 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 Mfis Institutionalizers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– Mfis Institutionalizers has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Low bargaining power of suppliers

– Suppliers of Mfis Institutionalizers in the sector have low bargaining power. Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mfis Institutionalizers to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Mfis Institutionalizers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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.

Highly skilled collaborators

– Mfis Institutionalizers has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

High switching costs

– The high switching costs that Mfis Institutionalizers 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.

Diverse revenue streams

– Mfis Institutionalizers is present in almost all the verticals within the industry. This has provided firm in Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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.

Ability to recruit top talent

– Mfis Institutionalizers is one of the leading recruiters in the industry. Managers in the Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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

– Mfis Institutionalizers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mfis Institutionalizers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Organizational Resilience of Mfis Institutionalizers

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mfis Institutionalizers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to lead change in Global Business field

– Mfis Institutionalizers 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 Mfis Institutionalizers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Mfis Institutionalizers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mfis Institutionalizers 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.

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Weaknesses Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value are -

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value, in the dynamic environment Mfis Institutionalizers has struggled to respond to the nimble upstart competition. Mfis Institutionalizers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Mfis Institutionalizers 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mfis Institutionalizers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 decision making process

– As mentioned earlier in the report, Mfis Institutionalizers 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. Mfis Institutionalizers 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 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 Mfis Institutionalizers supply chain. Even after few cautionary changes mentioned in the HBR case study - Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mfis Institutionalizers vulnerable to further global disruptions in South East Asia.

High cash cycle compare to competitors

Mfis Institutionalizers 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.

Skills based hiring

– The stress on hiring functional specialists at Mfis Institutionalizers 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value, is just above the industry average. Mfis Institutionalizers 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.

Increasing silos among functional specialists

– The organizational structure of Mfis Institutionalizers is dominated by functional specialists. It is not different from other players in the Global Business segment. Mfis Institutionalizers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mfis Institutionalizers to focus more on services rather than just following the product oriented approach.

Slow to strategic competitive environment developments

– As Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value HBR case study mentions - Mfis Institutionalizers 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.

Aligning sales with marketing

– It come across in the case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value can leverage the sales team experience to cultivate customer relationships as Mfis Institutionalizers is planning to shift buying processes online.

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Opportunities Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value | 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Mfis Institutionalizers in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Mfis Institutionalizers has opened avenues for new revenue streams for the organization in the industry. This can help Mfis Institutionalizers to build a more holistic ecosystem as suggested in the Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value case study. Mfis Institutionalizers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Mfis Institutionalizers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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

– Mfis Institutionalizers can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.

Using analytics as competitive advantage

– Mfis Institutionalizers 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mfis Institutionalizers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Mfis Institutionalizers in the consumer business. Now Mfis Institutionalizers can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Mfis Institutionalizers is facing challenges because of the dominance of functional experts in the organization. Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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.

Building a culture of innovation

– managers at Mfis Institutionalizers 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 Global Business segment.

Low interest rates

– Even though inflation is raising its head in most developed economies, Mfis Institutionalizers 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.

Developing new processes and practices

– Mfis Institutionalizers can develop new processes and procedures in Global Business 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mfis Institutionalizers can use these opportunities to build new business models that can help the communities that Mfis Institutionalizers operates in. Secondly it can use opportunities from government spending in Global Business sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Mfis Institutionalizers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Mfis Institutionalizers 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, Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value, Mfis Institutionalizers may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

Environmental challenges

– Mfis Institutionalizers 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. Mfis Institutionalizers can take advantage of this fund but it will also bring new competitors in the Global Business industry.

High dependence on third party suppliers

– Mfis Institutionalizers 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.

Increasing wage structure of Mfis Institutionalizers

– 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 Mfis Institutionalizers.

Regulatory challenges

– Mfis Institutionalizers 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 Global Business industry regulations.

Stagnating economy with rate increase

– Mfis Institutionalizers 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.

Shortening product life cycle

– it is one of the major threat that Mfis Institutionalizers is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Mfis Institutionalizers 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value .

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 Mfis Institutionalizers in the Global Business sector and impact the bottomline of the organization.

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. Mfis Institutionalizers needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mfis Institutionalizers.

Technology acceleration in Forth Industrial Revolution

– Mfis Institutionalizers has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Mfis Institutionalizers needs to keep up with the evolution of technology in the Global Business 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.

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Weighted SWOT Analysis of Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Microfinance Ecosystem: How Connectors, Interactors, and Institutionalizers Co-Create Value 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 Mfis Institutionalizers needs to make to build a sustainable competitive advantage.

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