Banca Regional Andino: Facing the Globalization of Microfinance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Banca Regional Andino: Facing the Globalization of Microfinance
Three leading Latin American microfinance banks join forces to face the new challenges of globalization, competition, and politics while common shareholder ACCION investments considers its options. From an initial project to share costs in the revamping of their IT systems, the Banca Regional Andino develops into the possibility of a common operating platform across three separate institutions, BancoSol of Bolivia, Mibanco of Peru, and Banco Solidario of Ecuador. The Banca Regional is a response to forces that the banks perceive as potentially threatening to their long history of success. In the process, presents the evolution of the national microfinance markets of Bolivia, Ecuador, and Peru within the context of global microfinance.
Swot Analysis of "Banca Regional Andino: Facing the Globalization of Microfinance" written by Michael Chu, Jean Steege Hazell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banca Microfinance facing as an external strategic factors. Some of the topics covered in Banca Regional Andino: Facing the Globalization of Microfinance case study are - Strategic Management Strategies, Economy, Entrepreneurial finance, Globalization, Social enterprise and Global Business.
Some of the macro environment factors that can be used to understand the Banca Regional Andino: Facing the Globalization of Microfinance casestudy better are - – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
there is backlash against globalization, increasing commodity prices, etc
Introduction to SWOT Analysis of Banca Regional Andino: Facing the Globalization of Microfinance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Banca Regional Andino: Facing the Globalization of Microfinance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banca Microfinance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banca Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance can be done for the following purposes –
1. Strategic planning using facts provided in Banca Regional Andino: Facing the Globalization of Microfinance case study
2. Improving business portfolio management of Banca Microfinance
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Banca Microfinance
Strengths Banca Regional Andino: Facing the Globalization of Microfinance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banca Microfinance in Banca Regional Andino: Facing the Globalization of Microfinance Harvard Business Review case study are -
Diverse revenue streams
– Banca Microfinance is present in almost all the verticals within the industry. This has provided firm in Banca Regional Andino: Facing the Globalization of 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.
Successful track record of launching new products
– Banca Microfinance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Banca Microfinance 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.
Sustainable margins compare to other players in Global Business industry
– Banca Regional Andino: Facing the Globalization of Microfinance firm has clearly differentiated products in the market place. This has enabled Banca Microfinance to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Banca Microfinance to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Banca Microfinance in the sector have low bargaining power. Banca Regional Andino: Facing the Globalization of Microfinance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Banca Microfinance to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Banca Microfinance 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 Banca Microfinance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Banca Regional Andino: Facing the Globalization of Microfinance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Banca Regional Andino: Facing the Globalization of 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.
High brand equity
– Banca Microfinance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Banca Microfinance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Banca Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Banca Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Banca Microfinance 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.
High switching costs
– The high switching costs that Banca Microfinance 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.
Ability to lead change in Global Business field
– Banca Microfinance 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 Banca Microfinance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Banca Regional Andino: Facing the Globalization of Microfinance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Banca Regional Andino: Facing the Globalization of Microfinance are -
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Chu, Jean Steege Hazell suggests that, Banca Microfinance 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.
Need for greater diversity
– Banca Microfinance 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Banca Microfinance 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Banca Regional Andino: Facing the Globalization of Microfinance 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 Banca Microfinance 's lucrative customers.
Lack of clear differentiation of Banca Microfinance products
– To increase the profitability and margins on the products, Banca Microfinance needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Banca Microfinance, firm in the HBR case study Banca Regional Andino: Facing the Globalization of Microfinance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Banca Microfinance 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 - Banca Regional Andino: Facing the Globalization of Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance can leverage the sales team experience to cultivate customer relationships as Banca Microfinance is planning to shift buying processes online.
High cash cycle compare to competitors
Banca Microfinance 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Banca Regional Andino: Facing the Globalization of Microfinance, in the dynamic environment Banca Microfinance has struggled to respond to the nimble upstart competition. Banca Microfinance has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Banca Regional Andino: Facing the Globalization of Microfinance 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 Banca Microfinance has relatively successful track record of launching new products.
Opportunities Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of Microfinance are -
Learning at scale
– Online learning technologies has now opened space for Banca Microfinance 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.
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 Banca Microfinance 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Banca Microfinance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Banca Microfinance 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. Banca Microfinance 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Banca Microfinance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banca Microfinance is facing challenges because of the dominance of functional experts in the organization. Banca Regional Andino: Facing the Globalization of Microfinance 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.
Better consumer reach
– The expansion of the 5G network will help Banca Microfinance to increase its market reach. Banca Microfinance 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
– Banca Microfinance 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.
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 Banca Microfinance in the consumer business. Now Banca Microfinance can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Banca Microfinance can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banca Microfinance 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 Banca Microfinance to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Banca Microfinance 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Banca Microfinance 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, Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of Microfinance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Banca Regional Andino: Facing the Globalization of Microfinance are -
Stagnating economy with rate increase
– Banca Microfinance 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Banca Microfinance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Banca Microfinance is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Banca Microfinance has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Banca Microfinance needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Banca Microfinance in the Global Business sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Banca Microfinance in the Global Business industry. The Global Business 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 Banca Microfinance
– 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 Banca Microfinance.
High dependence on third party suppliers
– Banca Microfinance 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.
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 Banca Microfinance.
Environmental challenges
– Banca Microfinance 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. Banca Microfinance can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Consumer confidence and its impact on Banca Microfinance 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Banca Regional Andino: Facing the Globalization of Microfinance, Banca Microfinance may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Weighted SWOT Analysis of Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of 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 Banca Regional Andino: Facing the Globalization of 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 Banca Microfinance needs to make to build a sustainable competitive advantage.
