Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study Description of Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance
In 2008, about the time when the Yunus Model of microfinancing was under attack in its home country of Bangladesh, the Yunan Model was begun in rural China. The original model suffered from inefficiencies, high interest rates and allegations of improprieties against the founder, Nobel Prize winner Muhammad Yunus. By contrast, the Yunan Model relied on social capital and mechanism design theory to enlist the rural population, financial institutions and government in a cooperative effort to increase the financial stability and entrepreneurship level of one of the poorest areas of the country. Could "microfinance with Chinese characteristics" offer a plan to reduce poverty across China? Authors Yuping Du and Randall O. Chang are affiliated with Guangdong University of Foreign Studies. Author Meng Wu is affiliated with University of Southern California.
Authors :: Yuping Du, Randall O. Chang, Meng Wu, Chun Li
Swot Analysis of "Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance" written by Yuping Du, Randall O. Chang, Meng Wu, Chun Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yunan Yunus facing as an external strategic factors. Some of the topics covered in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance casestudy better are - – increasing transportation and logistics costs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yunan Yunus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yunan Yunus 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance can be done for the following purposes –
1. Strategic planning using facts provided in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance case study
2. Improving business portfolio management of Yunan Yunus
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 Yunan Yunus
Strengths Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yunan Yunus in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Yunan Yunus in the sector have low bargaining power. Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yunan Yunus to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Yunan Yunus 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Yunan Yunus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Finance & Accounting field
– Yunan Yunus 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 Yunan Yunus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Yunan Yunus 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 Yuping Du, Randall O. Chang, Meng Wu, Chun Li 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.
High brand equity
– Yunan Yunus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yunan Yunus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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.
Diverse revenue streams
– Yunan Yunus is present in almost all the verticals within the industry. This has provided firm in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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.
Superior customer experience
– The customer experience strategy of Yunan Yunus in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Yunan Yunus 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 Yunan Yunus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Yunan Yunus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yunan Yunus 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.
Training and development
– Yunan Yunus has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance, is just above the industry average. Yunan Yunus 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 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 Yunan Yunus supply chain. Even after few cautionary changes mentioned in the HBR case study - Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yunan Yunus vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Yunan Yunus 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.
Lack of clear differentiation of Yunan Yunus products
– To increase the profitability and margins on the products, Yunan Yunus needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Yuping Du, Randall O. Chang, Meng Wu, Chun Li suggests that, Yunan Yunus 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance, it seems that the employees of Yunan Yunus 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.
High cash cycle compare to competitors
Yunan Yunus 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.
Products dominated business model
– Even though Yunan Yunus 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 - Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Yunan Yunus is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Yunan Yunus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yunan Yunus to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Yunan Yunus 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.
Skills based hiring
– The stress on hiring functional specialists at Yunan Yunus 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.
Opportunities Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance | 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance are -
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. Yunan Yunus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yunan Yunus 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.
Better consumer reach
– The expansion of the 5G network will help Yunan Yunus to increase its market reach. Yunan Yunus 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.
Loyalty marketing
– Yunan Yunus 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yunan Yunus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Yunan Yunus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Yunan Yunus has opened avenues for new revenue streams for the organization in the industry. This can help Yunan Yunus to build a more holistic ecosystem as suggested in the Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance case study. Yunan Yunus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Yunan Yunus 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.
Building a culture of innovation
– managers at Yunan Yunus 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yunan Yunus 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, Yunan Yunus can use these opportunities to build new business models that can help the communities that Yunan Yunus operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Yunan Yunus in the consumer business. Now Yunan Yunus can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yunan Yunus 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, Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yunan Yunus in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing wage structure of Yunan Yunus
– 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 Yunan Yunus.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yunan Yunus 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance .
Consumer confidence and its impact on Yunan Yunus 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.
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. Yunan Yunus 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.
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 Yunan Yunus in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Yunan Yunus has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Yunan Yunus needs to keep up with the evolution of technology in the Finance & Accounting 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.
Regulatory challenges
– Yunan Yunus 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.
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.
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 Yunan Yunus.
Environmental challenges
– Yunan Yunus 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. Yunan Yunus can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Shortening product life cycle
– it is one of the major threat that Yunan Yunus is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Contrasting China's Yunan Model with Bangladesh's Yunus Model for Microfinance 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 Yunan Yunus needs to make to build a sustainable competitive advantage.
