Case Study Description of Financial Inclusion at Omidyar Network
A team of investors at Omidyar Network explore two different investment possibilities in the budding financial inclusion space, using their investment framework to consider capital alternatives available for both investments, each of which carries highly divergent financial and impact potential.
Authors :: Vikram Gandhi, Caitlin Lindsay Reimers Brumme, James Barnett
Swot Analysis of "Financial Inclusion at Omidyar Network" written by Vikram Gandhi, Caitlin Lindsay Reimers Brumme, James Barnett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Omidyar Inclusion facing as an external strategic factors. Some of the topics covered in Financial Inclusion at Omidyar Network case study are - Strategic Management Strategies, Financial management, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Financial Inclusion at Omidyar Network casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing energy prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Financial Inclusion at Omidyar Network
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Financial Inclusion at Omidyar Network case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Omidyar Inclusion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Omidyar Inclusion 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 Financial Inclusion at Omidyar Network can be done for the following purposes –
1. Strategic planning using facts provided in Financial Inclusion at Omidyar Network case study
2. Improving business portfolio management of Omidyar Inclusion
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Omidyar Inclusion
Strengths Financial Inclusion at Omidyar Network | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Omidyar Inclusion in Financial Inclusion at Omidyar Network Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Omidyar Inclusion 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 Omidyar Inclusion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Omidyar Inclusion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Financial Inclusion at Omidyar Network 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.
Low bargaining power of suppliers
– Suppliers of Omidyar Inclusion in the sector have low bargaining power. Financial Inclusion at Omidyar Network has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Omidyar Inclusion to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Omidyar Inclusion has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Omidyar Inclusion to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Omidyar Inclusion is present in almost all the verticals within the industry. This has provided firm in Financial Inclusion at Omidyar Network 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.
Analytics focus
– Omidyar Inclusion 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 Vikram Gandhi, Caitlin Lindsay Reimers Brumme, James Barnett 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 Financial Inclusion at Omidyar Network 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.
Effective Research and Development (R&D)
– Omidyar Inclusion 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 Financial Inclusion at Omidyar Network - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Omidyar Inclusion 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.
Highly skilled collaborators
– Omidyar Inclusion 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 Financial Inclusion at Omidyar Network HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Omidyar Inclusion is one of the most innovative firm in sector. Manager in Financial Inclusion at Omidyar Network Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Omidyar Inclusion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Omidyar Inclusion 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 Financial Inclusion at Omidyar Network | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Financial Inclusion at Omidyar Network are -
Workers concerns about automation
– As automation is fast increasing in the segment, Omidyar Inclusion 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.
Increasing silos among functional specialists
– The organizational structure of Omidyar Inclusion is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Omidyar Inclusion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Omidyar Inclusion to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Omidyar Inclusion 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.
Slow decision making process
– As mentioned earlier in the report, Omidyar Inclusion 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. Omidyar Inclusion 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 operating costs
– Compare to the competitors, firm in the HBR case study Financial Inclusion at Omidyar Network 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 Omidyar Inclusion 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Omidyar Inclusion 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.
No frontier risks strategy
– After analyzing the HBR case study Financial Inclusion at Omidyar Network, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Aligning sales with marketing
– It come across in the case study Financial Inclusion at Omidyar Network 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 Financial Inclusion at Omidyar Network can leverage the sales team experience to cultivate customer relationships as Omidyar Inclusion 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 Financial Inclusion at Omidyar Network, in the dynamic environment Omidyar Inclusion has struggled to respond to the nimble upstart competition. Omidyar Inclusion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Omidyar Inclusion products
– To increase the profitability and margins on the products, Omidyar Inclusion needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Omidyar Inclusion supply chain. Even after few cautionary changes mentioned in the HBR case study - Financial Inclusion at Omidyar Network, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Omidyar Inclusion vulnerable to further global disruptions in South East Asia.
Opportunities Financial Inclusion at Omidyar Network | 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 Financial Inclusion at Omidyar Network are -
Leveraging digital technologies
– Omidyar Inclusion 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Omidyar Inclusion is facing challenges because of the dominance of functional experts in the organization. Financial Inclusion at Omidyar Network 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.
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. Omidyar Inclusion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Omidyar Inclusion to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Omidyar Inclusion 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Omidyar Inclusion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Omidyar Inclusion can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Omidyar Inclusion in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Omidyar Inclusion can use these opportunities to build new business models that can help the communities that Omidyar Inclusion operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Omidyar Inclusion can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Omidyar Inclusion can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Omidyar Inclusion has opened avenues for new revenue streams for the organization in the industry. This can help Omidyar Inclusion to build a more holistic ecosystem as suggested in the Financial Inclusion at Omidyar Network case study. Omidyar Inclusion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Omidyar Inclusion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Financial Inclusion at Omidyar Network External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Financial Inclusion at Omidyar Network are -
Environmental challenges
– Omidyar Inclusion 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. Omidyar Inclusion can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Omidyar Inclusion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Omidyar Inclusion
– 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 Omidyar Inclusion.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Omidyar Inclusion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Omidyar Inclusion needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Financial Inclusion at Omidyar Network, Omidyar Inclusion may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Omidyar Inclusion will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Omidyar Inclusion 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.
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.
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. Omidyar Inclusion needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Omidyar Inclusion 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Omidyar Inclusion 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 Financial Inclusion at Omidyar Network .
High dependence on third party suppliers
– Omidyar Inclusion 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.
Weighted SWOT Analysis of Financial Inclusion at Omidyar Network 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 Financial Inclusion at Omidyar Network 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 Financial Inclusion at Omidyar Network 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 Financial Inclusion at Omidyar Network 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 Financial Inclusion at Omidyar Network 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 Omidyar Inclusion needs to make to build a sustainable competitive advantage.
