Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty
University of California, Berkeley-Haas collectionThe Valuing a Microfinance Institution (Or Private Growth Enterprise) case study provides students with a scenario where they can learn how to evaluate and value a microfinance investment target in Africa amidst high uncertainty, limited information, and few (if any) usable comparable companies. Even though the case study focuses on an MFI, it can easily be applied to all private growth enterprises. Given high forecast growth, an uncertain exit, diverse competition, and no standard methodology, the protagonist of the case must choose between five different valuation techniques. The case explores the pros and cons of each methodology; students will choose a methodology, derive a valuation, discuss how the techniques lead to a wide range of values, and finally understand the difference between calculating a valuation and making an offer during a negotiation.
Swot Analysis of "Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty" written by Sean Foote, Brian Busch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microfinance Methodology facing as an external strategic factors. Some of the topics covered in Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty casestudy better are - – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
technology disruption, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microfinance Methodology, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microfinance Methodology 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty can be done for the following purposes –
1. Strategic planning using facts provided in Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty case study
2. Improving business portfolio management of Microfinance Methodology
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 Microfinance Methodology
Strengths Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microfinance Methodology in Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty Harvard Business Review case study are -
Organizational Resilience of Microfinance Methodology
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microfinance Methodology does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Microfinance Methodology 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 Sean Foote, Brian Busch 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.
Effective Research and Development (R&D)
– Microfinance Methodology 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty - 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 Microfinance Methodology 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty firm has clearly differentiated products in the market place. This has enabled Microfinance Methodology to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Microfinance Methodology to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Microfinance Methodology 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 Microfinance Methodology in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Microfinance Methodology in the sector have low bargaining power. Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microfinance Methodology to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Microfinance Methodology has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microfinance Methodology to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Microfinance Methodology is one of the leading recruiters in the industry. Managers in the Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Microfinance Methodology is present in almost all the verticals within the industry. This has provided firm in Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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.
Operational resilience
– The operational resilience strategy in the Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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.
Highly skilled collaborators
– Microfinance Methodology 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Microfinance Methodology has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Microfinance Methodology 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.
Low market penetration in new markets
– Outside its home market of Microfinance Methodology, firm in the HBR case study Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Sean Foote, Brian Busch suggests that, Microfinance Methodology 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 Microfinance Methodology 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 - Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty should strive to include more intangible value offerings along with its core products and services.
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 Microfinance Methodology supply chain. Even after few cautionary changes mentioned in the HBR case study - Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Microfinance Methodology vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microfinance Methodology is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Microfinance Methodology products
– To increase the profitability and margins on the products, Microfinance Methodology needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Microfinance Methodology 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 operating costs
– Compare to the competitors, firm in the HBR case study Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Microfinance Methodology 's lucrative customers.
Opportunities Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty | 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty are -
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 Microfinance Methodology 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Microfinance Methodology can use these opportunities to build new business models that can help the communities that Microfinance Methodology operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Microfinance Methodology to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Microfinance Methodology 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microfinance Methodology to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Microfinance Methodology 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.
Loyalty marketing
– Microfinance Methodology 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Microfinance Methodology 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
– Microfinance Methodology 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microfinance Methodology is facing challenges because of the dominance of functional experts in the organization. Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Microfinance Methodology 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.
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 Microfinance Methodology in the consumer business. Now Microfinance Methodology can target international markets with far fewer capital restrictions requirements than the existing system.
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. Microfinance Methodology can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Microfinance Methodology can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty are -
Increasing wage structure of Microfinance Methodology
– 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 Microfinance Methodology.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Microfinance Methodology 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Microfinance Methodology with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Microfinance Methodology 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.
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. Microfinance Methodology needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Microfinance Methodology 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.
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. Microfinance Methodology can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Microfinance Methodology in the Finance & Accounting sector and impact the bottomline of the organization.
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 Microfinance Methodology business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Microfinance Methodology has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Microfinance Methodology 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
– Microfinance Methodology 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.
Environmental challenges
– Microfinance Methodology 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. Microfinance Methodology can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High dependence on third party suppliers
– Microfinance Methodology 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Valuing a Microfinance Institution (Or Private Growth Enterprise): Dealing with Uncertainty 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 Microfinance Methodology needs to make to build a sustainable competitive advantage.
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