Edyficar and Mibanco: The Emergence of M&A in Microfinance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Edyficar and Mibanco: The Emergence of M&A in Microfinance
Mibanco, a microfinance icon, is for sale and Edyficar, owned by BCP, Peru's largest bank, is evaluating its acquisition. Until recently, such a transaction would have been fanciful given Mibanco's pre-eminent role in Peruvian microfinance which has made it the country's fifth largest bank. The case examines why Mibanco is on the block, while also relating the evolution of Edyficar and its own acquisition by BCP (Banco del Credito) several years earlier. Percy Urteaga, Edyficar's CEO, and Gianfranco Ferrari, the chair of his board and senior BCP executive, must decide whether to go forward and, if so, at what price.
Swot Analysis of "Edyficar and Mibanco: The Emergence of M&A in Microfinance" written by Michael Chu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Edyficar Mibanco facing as an external strategic factors. Some of the topics covered in Edyficar and Mibanco: The Emergence of M&A in Microfinance case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions, Social enterprise and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Edyficar and Mibanco: The Emergence of M&A in Microfinance casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of Edyficar and Mibanco: The Emergence of M&A in Microfinance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Edyficar and Mibanco: The Emergence of M&A in Microfinance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Edyficar Mibanco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Edyficar Mibanco 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 Edyficar and Mibanco: The Emergence of M&A in Microfinance can be done for the following purposes –
1. Strategic planning using facts provided in Edyficar and Mibanco: The Emergence of M&A in Microfinance case study
2. Improving business portfolio management of Edyficar Mibanco
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 Edyficar Mibanco
Strengths Edyficar and Mibanco: The Emergence of M&A in Microfinance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Edyficar Mibanco in Edyficar and Mibanco: The Emergence of M&A in Microfinance Harvard Business Review case study are -
Diverse revenue streams
– Edyficar Mibanco is present in almost all the verticals within the industry. This has provided firm in Edyficar and Mibanco: The Emergence of M&A in 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.
Operational resilience
– The operational resilience strategy in the Edyficar and Mibanco: The Emergence of M&A in 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.
Innovation driven organization
– Edyficar Mibanco is one of the most innovative firm in sector. Manager in Edyficar and Mibanco: The Emergence of M&A in Microfinance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Edyficar Mibanco 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.
Successful track record of launching new products
– Edyficar Mibanco has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Edyficar Mibanco 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 Finance & Accounting industry
– Edyficar and Mibanco: The Emergence of M&A in Microfinance firm has clearly differentiated products in the market place. This has enabled Edyficar Mibanco to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Edyficar Mibanco to invest into research and development (R&D) and innovation.
Organizational Resilience of Edyficar Mibanco
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Edyficar Mibanco does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Edyficar Mibanco is one of the leading recruiters in the industry. Managers in the Edyficar and Mibanco: The Emergence of M&A in 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.
High brand equity
– Edyficar Mibanco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Edyficar Mibanco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Edyficar Mibanco 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.
Effective Research and Development (R&D)
– Edyficar Mibanco 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 Edyficar and Mibanco: The Emergence of M&A in 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
– Edyficar Mibanco 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 Edyficar and Mibanco: The Emergence of M&A in Microfinance HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Edyficar and Mibanco: The Emergence of M&A in Microfinance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Edyficar and Mibanco: The Emergence of M&A in Microfinance are -
Products dominated business model
– Even though Edyficar Mibanco 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 - Edyficar and Mibanco: The Emergence of M&A in Microfinance should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Edyficar Mibanco is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Edyficar Mibanco needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Edyficar Mibanco to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Edyficar Mibanco has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Edyficar and Mibanco: The Emergence of M&A in Microfinance HBR case study mentions - Edyficar Mibanco 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Edyficar Mibanco is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Edyficar and Mibanco: The Emergence of M&A in 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.
No frontier risks strategy
– After analyzing the HBR case study Edyficar and Mibanco: The Emergence of M&A in Microfinance, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar Mibanco has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Chu suggests that, Edyficar Mibanco 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.
Skills based hiring
– The stress on hiring functional specialists at Edyficar Mibanco 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.
High cash cycle compare to competitors
Edyficar Mibanco 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar Mibanco 's lucrative customers.
Opportunities Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar and Mibanco: The Emergence of M&A in Microfinance are -
Buying journey improvements
– Edyficar Mibanco can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Edyficar and Mibanco: The Emergence of M&A in 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.
Using analytics as competitive advantage
– Edyficar Mibanco 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 Edyficar and Mibanco: The Emergence of M&A in Microfinance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Edyficar Mibanco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Edyficar Mibanco 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.
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. Edyficar Mibanco can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Edyficar Mibanco 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.
Developing new processes and practices
– Edyficar Mibanco 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Edyficar Mibanco 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. Edyficar Mibanco 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Edyficar Mibanco is facing challenges because of the dominance of functional experts in the organization. Edyficar and Mibanco: The Emergence of M&A in 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.
Learning at scale
– Online learning technologies has now opened space for Edyficar Mibanco 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Edyficar Mibanco in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Edyficar Mibanco to increase its market reach. Edyficar Mibanco 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Edyficar Mibanco can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Edyficar Mibanco can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Edyficar and Mibanco: The Emergence of M&A in Microfinance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Edyficar and Mibanco: The Emergence of M&A in Microfinance are -
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. Edyficar Mibanco needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Edyficar Mibanco 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.
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. Edyficar Mibanco can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Edyficar Mibanco 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.
Environmental challenges
– Edyficar Mibanco 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. Edyficar Mibanco can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Edyficar Mibanco has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Edyficar Mibanco 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.
Increasing wage structure of Edyficar Mibanco
– 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 Edyficar Mibanco.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Edyficar and Mibanco: The Emergence of M&A in Microfinance, Edyficar Mibanco may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Edyficar Mibanco 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Edyficar Mibanco 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 Edyficar and Mibanco: The Emergence of M&A in Microfinance .
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 Edyficar Mibanco 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 Edyficar Mibanco business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar and Mibanco: The Emergence of M&A in 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 Edyficar Mibanco needs to make to build a sustainable competitive advantage.
