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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, wage bills are increasing, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
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.
High switching costs
– The high switching costs that Microfinance Blueorchard 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.
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.
Analytics focus
– Microfinance Blueorchard 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 Jean-Philippe de Schrevel, Marc Labie, Guy Stuart 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.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Microfinance Blueorchard 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 decision making process
– As mentioned earlier in the report, Microfinance Blueorchard 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. Microfinance Blueorchard 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.
High operating costs
– Compare to the competitors, firm in the HBR case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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 Microfinance Blueorchard 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel, is just above the industry average. Microfinance Blueorchard 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.
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.
Slow to strategic competitive environment developments
– As BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel HBR case study mentions - Microfinance Blueorchard 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, 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 bargaining power of channel partners
– Because of the regulatory requirements, Jean-Philippe de Schrevel, Marc Labie, Guy Stuart suggests that, Microfinance Blueorchard 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.
Products dominated business model
– Even though Microfinance Blueorchard 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 - BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel should strive to include more intangible value offerings along with its core products and services.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Microfinance Blueorchard 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, BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Buying journey improvements
– Microfinance Blueorchard can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microfinance Blueorchard is facing challenges because of the dominance of functional experts in the organization. BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel 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.
Building a culture of innovation
– managers at Microfinance Blueorchard 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.
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.
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.
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.
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. Microfinance Blueorchard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microfinance Blueorchard 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 BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel .
High dependence on third party suppliers
– Microfinance Blueorchard high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
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.
Regulatory challenges
– Microfinance Blueorchard 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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BlueOrchard Finance: Connecting Microfinance to Capital Markets: Sequel, Microfinance Blueorchard 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 .
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.
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.
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.
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.
