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 - – increasing commodity prices, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, 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 -
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.
Analytics focus
– Banca Microfinance 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 Michael Chu, Jean Steege Hazell 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.
Organizational Resilience of Banca Microfinance
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Banca Microfinance does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Innovation driven organization
– Banca Microfinance is one of the most innovative firm in sector. Manager in Banca Regional Andino: Facing the Globalization of Microfinance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Banca Microfinance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Banca Microfinance 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.
Superior customer experience
– The customer experience strategy of Banca Microfinance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to recruit top talent
– Banca Microfinance is one of the leading recruiters in the industry. Managers in the Banca Regional Andino: Facing the Globalization of Microfinance are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Banca Regional Andino: Facing the Globalization of Microfinance, it seems that the employees of Banca Microfinance 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.
Interest costs
– Compare to the competition, Banca Microfinance has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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 Banca Microfinance supply chain. Even after few cautionary changes mentioned in the HBR case study - Banca Regional Andino: Facing the Globalization of Microfinance, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Banca Microfinance vulnerable to further global disruptions in South East Asia.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Banca Microfinance is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Banca Regional Andino: Facing the Globalization of Microfinance can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Slow decision making process
– As mentioned earlier in the report, Banca Microfinance has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Banca Microfinance even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Banca Regional Andino: Facing the Globalization of Microfinance HBR case study mentions - Banca Microfinance 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
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.
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 -
Buying journey improvements
– Banca Microfinance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Banca Regional Andino: Facing the Globalization of Microfinance 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.
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.
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. Banca Microfinance 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, Banca Microfinance can use these opportunities to build new business models that can help the communities that Banca Microfinance operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Banca Microfinance 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 Banca Regional Andino: Facing the Globalization of Microfinance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Banca Microfinance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Banca Microfinance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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 -
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. Banca Microfinance 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.
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.
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.
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.
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.
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.
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.
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. Banca Microfinance needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Banca Microfinance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 .
Regulatory challenges
– Banca Microfinance 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 Global Business industry regulations.
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.