The First Credit Bureau SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The First Credit Bureau
This is a Darden case study.This case can be used in courses on credit markets, emerging markets finance, and economic and financial development. The Pragma Corporation, a northern Virginia-based international development consulting firm, won a bid put out in 2001 by the United States Agency for International Development (USAID) to help develop a credit bureau in Kazakhstan. Between 2001 and 2003, Javier Piedra, a senior consultant at Pragma, and a team of four local consultants assessed the market opportunity, prepared a business plan, and made the case to senior Kazakhstani government and private-sector officials that it was possible to develop a well-functioning private credit bureau based on international best practices. Key stakeholders accepted much of FSI's theoretical argument, but it was not clear that the financial community was willing to transfer their proprietary data, perhaps their most important asset to a credit bureau. To move forward, Piedra and his team had to negotiate with various stakeholders around two complex issues--the ownership and governance structure for the credit bureau and a legal framework for sharing credit data--and persuade a majority of the banks to share their data. The case gives detailed information on the credit bureau's business plan.
Swot Analysis of "The First Credit Bureau" written by Wei Li, Bidhan Parmar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bureau Credit facing as an external strategic factors. Some of the topics covered in The First Credit Bureau case study are - Strategic Management Strategies, Financial management and Global Business.
Some of the macro environment factors that can be used to understand the The First Credit Bureau casestudy better are - – geopolitical disruptions, there is backlash against globalization, central banks are concerned over increasing inflation, increasing energy prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of The First Credit Bureau
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The First Credit Bureau case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bureau Credit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bureau Credit 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 The First Credit Bureau can be done for the following purposes –
1. Strategic planning using facts provided in The First Credit Bureau case study
2. Improving business portfolio management of Bureau Credit
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 Bureau Credit
Strengths The First Credit Bureau | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bureau Credit in The First Credit Bureau Harvard Business Review case study are -
Highly skilled collaborators
– Bureau Credit 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 The First Credit Bureau HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Bureau Credit is one of the most innovative firm in sector. Manager in The First Credit Bureau Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Bureau Credit in the sector have low bargaining power. The First Credit Bureau has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bureau Credit to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Bureau Credit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bureau Credit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Bureau Credit has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bureau Credit 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
– Bureau Credit is one of the leading recruiters in the industry. Managers in the The First Credit Bureau are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Bureau Credit 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 Bureau Credit in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Bureau Credit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– The First Credit Bureau firm has clearly differentiated products in the market place. This has enabled Bureau Credit to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Bureau Credit to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The First Credit Bureau 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.
Training and development
– Bureau Credit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The First Credit Bureau Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Bureau Credit is present in almost all the verticals within the industry. This has provided firm in The First Credit Bureau 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.
Weaknesses The First Credit Bureau | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The First Credit Bureau are -
Need for greater diversity
– Bureau Credit 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.
Low market penetration in new markets
– Outside its home market of Bureau Credit, firm in the HBR case study The First Credit Bureau needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Bureau Credit 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 The First Credit Bureau, is just above the industry average. Bureau Credit 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.
Interest costs
– Compare to the competition, Bureau Credit 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The First Credit Bureau, in the dynamic environment Bureau Credit has struggled to respond to the nimble upstart competition. Bureau Credit 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 The First Credit Bureau 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 Bureau Credit has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Bureau Credit has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Bureau Credit 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 - The First Credit Bureau should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Bureau Credit is dominated by functional specialists. It is not different from other players in the Global Business segment. Bureau Credit needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bureau Credit to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Bureau Credit 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 The First Credit Bureau | 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 The First Credit Bureau are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bureau Credit 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.
Leveraging digital technologies
– Bureau Credit 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bureau Credit is facing challenges because of the dominance of functional experts in the organization. The First Credit Bureau 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.
Learning at scale
– Online learning technologies has now opened space for Bureau Credit 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.
Buying journey improvements
– Bureau Credit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The First Credit Bureau 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.
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 Bureau Credit 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.
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. Bureau Credit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bureau Credit 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, The First Credit Bureau, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Bureau Credit in the consumer business. Now Bureau Credit can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Bureau Credit to increase its market reach. Bureau Credit 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.
Developing new processes and practices
– Bureau Credit can develop new processes and procedures in Global Business 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bureau Credit 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 Bureau Credit to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bureau Credit can use these opportunities to build new business models that can help the communities that Bureau Credit operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats The First Credit Bureau External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The First Credit Bureau are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bureau Credit can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The First Credit Bureau .
Consumer confidence and its impact on Bureau Credit 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.
Shortening product life cycle
– it is one of the major threat that Bureau Credit is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Bureau Credit 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.
Stagnating economy with rate increase
– Bureau Credit 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.
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. Bureau Credit 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. Bureau Credit needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The First Credit Bureau, Bureau Credit 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 .
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. Bureau Credit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Bureau Credit
– 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 Bureau Credit.
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 Bureau Credit business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bureau Credit 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.
Technology acceleration in Forth Industrial Revolution
– Bureau Credit has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Bureau Credit 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.
Weighted SWOT Analysis of The First Credit Bureau 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 The First Credit Bureau 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 The First Credit Bureau 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 The First Credit Bureau 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 The First Credit Bureau 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 Bureau Credit needs to make to build a sustainable competitive advantage.
