BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel
Microfinance is a field that has received increasing attention over the years in the development community. It consists of the delivery of financial services to people excluded from traditional banking institutions. For many years, most work was done on issues like credit and saving methodologies. However, the emphasis has switched in recent years to institutional sustainability to maximize impact through the commercialization of microfinance. A key component of microfinance commercialization is the mobilization of funds from money and capital markets, to decrease dependency on donors and governments and to enhance the financial intermediation of microfinance institutions. One of the most innovative ways to mobilize funds for microfinance lending is through the establishment of microfinance funds that channel investments from capital markets to microfinance institutions either as loans, guarantees or - less often - equity. BlueOrchard Finance has been a major actor in this arena through the management of the Dexia Microcredit Fund (DMCF). HKS Case Number 1762.0
Authors :: Jean-Philippe de Schrevel, Marc Labie, Guy Stuart
Swot Analysis of "BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel" written by Jean-Philippe de Schrevel, Marc Labie, Guy Stuart includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microfinance Blueorchard facing as an external strategic factors. Some of the topics covered in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel case study are - Strategic Management Strategies, Corporate governance, Economics, Entrepreneurial finance, Financial management, Globalization, Security & privacy, Strategic planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microfinance Blueorchard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microfinance Blueorchard 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel can be done for the following purposes –
1. Strategic planning using facts provided in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel case study
2. Improving business portfolio management of Microfinance Blueorchard
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Microfinance Blueorchard
Strengths BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microfinance Blueorchard in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel Harvard Business Review case study are -
Innovation driven organization
– Microfinance Blueorchard is one of the most innovative firm in sector. Manager in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Microfinance Blueorchard 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 Microfinance Blueorchard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Microfinance Blueorchard in the sector have low bargaining power. BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microfinance Blueorchard to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Microfinance Blueorchard
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microfinance Blueorchard does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Microfinance Blueorchard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microfinance Blueorchard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel firm has clearly differentiated products in the market place. This has enabled Microfinance Blueorchard to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Microfinance Blueorchard to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Microfinance Blueorchard 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.
Strong track record of project management
– Microfinance Blueorchard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Microfinance Blueorchard has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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.
Successful track record of launching new products
– Microfinance Blueorchard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microfinance Blueorchard 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 lead change in Finance & Accounting field
– Microfinance Blueorchard is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Microfinance Blueorchard in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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.
Weaknesses BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microfinance Blueorchard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Microfinance Blueorchard has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Microfinance Blueorchard, firm in the HBR case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Microfinance Blueorchard has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Microfinance Blueorchard 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.
Capital Spending Reduction
– Even during the low interest decade, Microfinance Blueorchard 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.
Aligning sales with marketing
– It come across in the case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel can leverage the sales team experience to cultivate customer relationships as Microfinance Blueorchard is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Microfinance Blueorchard 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel, in the dynamic environment Microfinance Blueorchard has struggled to respond to the nimble upstart competition. Microfinance Blueorchard has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Microfinance Blueorchard is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Microfinance Blueorchard needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microfinance Blueorchard to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Microfinance Blueorchard products
– To increase the profitability and margins on the products, Microfinance Blueorchard needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel | 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel are -
Better consumer reach
– The expansion of the 5G network will help Microfinance Blueorchard to increase its market reach. Microfinance Blueorchard 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
– Microfinance Blueorchard can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Microfinance Blueorchard 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Microfinance Blueorchard in the consumer business. Now Microfinance Blueorchard can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Microfinance Blueorchard 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
– Microfinance Blueorchard 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.
Developing new processes and practices
– Microfinance Blueorchard 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Microfinance Blueorchard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Microfinance Blueorchard has opened avenues for new revenue streams for the organization in the industry. This can help Microfinance Blueorchard to build a more holistic ecosystem as suggested in the BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel case study. Microfinance Blueorchard can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Microfinance Blueorchard 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.
Learning at scale
– Online learning technologies has now opened space for Microfinance Blueorchard 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Microfinance Blueorchard can use these opportunities to build new business models that can help the communities that Microfinance Blueorchard operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Microfinance Blueorchard 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.
Threats BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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. Microfinance Blueorchard 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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Microfinance Blueorchard in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Microfinance Blueorchard has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Microfinance Blueorchard 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Microfinance Blueorchard 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.
Stagnating economy with rate increase
– Microfinance Blueorchard 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Microfinance Blueorchard business can come under increasing regulations regarding data privacy, data security, etc.
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.
Increasing wage structure of Microfinance Blueorchard
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Microfinance Blueorchard.
Environmental challenges
– Microfinance Blueorchard needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Microfinance Blueorchard can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Microfinance Blueorchard 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 Microfinance Blueorchard is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Microfinance Blueorchard.
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.
Weighted SWOT Analysis of BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Microfinance Blueorchard needs to make to build a sustainable competitive advantage.