Case Study Description of Progreso Financiero: Growing Sales
James Gutierrez has started a socially responsible consumer lending company focused on serving the underbanked Hispanic market. The company has gone through a succession of sales directors and Gutierrez has now pinned his hopes on his operations director Sam Ulloa to help stem the tide. Can Ulloa do it? The future of Progreso Financiero depends on it.
Swot Analysis of "Progreso Financiero: Growing Sales" written by Arar Han, Mark Leslie, James M. Lattin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gutierrez Progreso facing as an external strategic factors. Some of the topics covered in Progreso Financiero: Growing Sales case study are - Strategic Management Strategies, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Progreso Financiero: Growing Sales casestudy better are - – increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Progreso Financiero: Growing Sales
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Progreso Financiero: Growing Sales case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gutierrez Progreso, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gutierrez Progreso 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 Progreso Financiero: Growing Sales can be done for the following purposes –
1. Strategic planning using facts provided in Progreso Financiero: Growing Sales case study
2. Improving business portfolio management of Gutierrez Progreso
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 Gutierrez Progreso
Strengths Progreso Financiero: Growing Sales | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gutierrez Progreso in Progreso Financiero: Growing Sales Harvard Business Review case study are -
Organizational Resilience of Gutierrez Progreso
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gutierrez Progreso does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Gutierrez Progreso 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 Arar Han, Mark Leslie, James M. Lattin 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.
Highly skilled collaborators
– Gutierrez Progreso 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 Progreso Financiero: Growing Sales 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 Gutierrez Progreso 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.
Learning organization
- Gutierrez Progreso 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 Gutierrez Progreso is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Progreso Financiero: Growing Sales Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Gutierrez Progreso is present in almost all the verticals within the industry. This has provided firm in Progreso Financiero: Growing Sales case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Finance & Accounting industry
– Progreso Financiero: Growing Sales firm has clearly differentiated products in the market place. This has enabled Gutierrez Progreso to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Gutierrez Progreso to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Gutierrez Progreso 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Gutierrez Progreso digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gutierrez Progreso 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.
Effective Research and Development (R&D)
– Gutierrez Progreso 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 Progreso Financiero: Growing Sales - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Gutierrez Progreso 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 Gutierrez Progreso in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Gutierrez Progreso is one of the most innovative firm in sector. Manager in Progreso Financiero: Growing Sales Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Progreso Financiero: Growing Sales | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Progreso Financiero: Growing Sales are -
Slow to strategic competitive environment developments
– As Progreso Financiero: Growing Sales HBR case study mentions - Gutierrez Progreso 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.
High cash cycle compare to competitors
Gutierrez Progreso 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Progreso Financiero: Growing Sales, it seems that the employees of Gutierrez Progreso 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gutierrez Progreso 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Progreso Financiero: Growing Sales, is just above the industry average. Gutierrez Progreso 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.
Need for greater diversity
– Gutierrez Progreso has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Arar Han, Mark Leslie, James M. Lattin suggests that, Gutierrez Progreso 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.
Products dominated business model
– Even though Gutierrez Progreso 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 - Progreso Financiero: Growing Sales should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Progreso Financiero: Growing Sales 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 Progreso Financiero: Growing Sales can leverage the sales team experience to cultivate customer relationships as Gutierrez Progreso is planning to shift buying processes online.
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 Gutierrez Progreso supply chain. Even after few cautionary changes mentioned in the HBR case study - Progreso Financiero: Growing Sales, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gutierrez Progreso vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Progreso Financiero: Growing Sales 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 Gutierrez Progreso 's lucrative customers.
Opportunities Progreso Financiero: Growing Sales | 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 Progreso Financiero: Growing Sales are -
Loyalty marketing
– Gutierrez Progreso 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.
Better consumer reach
– The expansion of the 5G network will help Gutierrez Progreso to increase its market reach. Gutierrez Progreso 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.
Leveraging digital technologies
– Gutierrez Progreso 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gutierrez Progreso can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Gutierrez Progreso in the consumer business. Now Gutierrez Progreso can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gutierrez Progreso 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 Gutierrez Progreso to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Gutierrez Progreso 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gutierrez Progreso can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Gutierrez Progreso can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Gutierrez Progreso can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Progreso Financiero: Growing Sales 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.
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. Gutierrez Progreso can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gutierrez Progreso can use these opportunities to build new business models that can help the communities that Gutierrez Progreso operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Gutierrez Progreso 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, Gutierrez Progreso 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.
Threats Progreso Financiero: Growing Sales External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Progreso Financiero: Growing Sales are -
Technology acceleration in Forth Industrial Revolution
– Gutierrez Progreso has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Gutierrez Progreso 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.
Stagnating economy with rate increase
– Gutierrez Progreso 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.
High dependence on third party suppliers
– Gutierrez Progreso 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.
Regulatory challenges
– Gutierrez Progreso 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.
Increasing wage structure of Gutierrez Progreso
– 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 Gutierrez Progreso.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Progreso Financiero: Growing Sales, Gutierrez Progreso 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 .
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. Gutierrez Progreso needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gutierrez Progreso 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.
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. Gutierrez Progreso 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.
Shortening product life cycle
– it is one of the major threat that Gutierrez Progreso is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gutierrez Progreso can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Gutierrez Progreso business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Progreso Financiero: Growing Sales 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 Progreso Financiero: Growing Sales 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 Progreso Financiero: Growing Sales 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 Progreso Financiero: Growing Sales 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 Progreso Financiero: Growing Sales 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 Gutierrez Progreso needs to make to build a sustainable competitive advantage.