Rural Credit Cooperatives in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rural Credit Cooperatives in India
Recently, the Indian Congress asked a distinguished committee of experts to analyze and make policy recommendations about India's Cooperative Financial Institutions (CFIs), which included organizations such as credit unions and cooperative banks. One committee member, Mohan R. Narayan, a leading economist at a prestigious Indian university, was enthusiastic about the job; it was an opportunity to help millions of rural poor and to have a positive effect on the country. Some poor farmers, deeply in debts to money-lenders, had been reported to resort to committing suicide when they faced with drought or other catastrophes and saw little reason to continue living. Well-functioning CFIs would certainly help restore hope and boost income for the rural poor. But he knew the system had a long history of overregulation, financial laxity, and corruption. Creating an actionable and clear strategy would be no easy task. The case, written at the invitation of the World Bank to study the challenges of building inclusive financial system in emerging countries, invites students to discuss 1) The roles and responsibilities of financial institutions in poverty-reduction and economic development, 2) the benefits and risks of using public versus private institutions to aid development, and more specifically, 3) the economics of credit cooperatives-in particular how they function in an emerging market setting.
Swot Analysis of "Rural Credit Cooperatives in India" written by Wei Li, Bidhan Parmar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cfis Rural facing as an external strategic factors. Some of the topics covered in Rural Credit Cooperatives in India case study are - Strategic Management Strategies, Emerging markets, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Rural Credit Cooperatives in India casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing energy prices,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Rural Credit Cooperatives in India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rural Credit Cooperatives in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cfis Rural, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cfis Rural 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 Rural Credit Cooperatives in India can be done for the following purposes –
1. Strategic planning using facts provided in Rural Credit Cooperatives in India case study
2. Improving business portfolio management of Cfis Rural
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 Cfis Rural
Strengths Rural Credit Cooperatives in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cfis Rural in Rural Credit Cooperatives in India Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cfis Rural 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 Rural Credit Cooperatives in India - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Cfis Rural 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 Cfis Rural in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Cfis Rural 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 Cfis Rural is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rural Credit Cooperatives in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Cfis Rural
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cfis Rural does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Cfis Rural is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Cfis Rural is present in almost all the verticals within the industry. This has provided firm in Rural Credit Cooperatives in India 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Rural Credit Cooperatives in India firm has clearly differentiated products in the market place. This has enabled Cfis Rural to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Cfis Rural to invest into research and development (R&D) and innovation.
Analytics focus
– Cfis Rural 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 Wei Li, Bidhan Parmar 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.
High brand equity
– Cfis Rural has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cfis Rural to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Cfis Rural is one of the leading recruiters in the industry. Managers in the Rural Credit Cooperatives in India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Rural Credit Cooperatives in India 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.
Cross disciplinary teams
– Horizontal connected teams at the Cfis Rural 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.
Weaknesses Rural Credit Cooperatives in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rural Credit Cooperatives in India are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rural Credit Cooperatives in India, it seems that the employees of Cfis Rural don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Cfis Rural 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Rural Credit Cooperatives in India, in the dynamic environment Cfis Rural has struggled to respond to the nimble upstart competition. Cfis Rural 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 Cfis Rural is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Cfis Rural needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cfis Rural to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cfis Rural supply chain. Even after few cautionary changes mentioned in the HBR case study - Rural Credit Cooperatives in India, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cfis Rural vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Cfis Rural products
– To increase the profitability and margins on the products, Cfis Rural needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Cfis Rural, firm in the HBR case study Rural Credit Cooperatives in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Cfis Rural 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.
Aligning sales with marketing
– It come across in the case study Rural Credit Cooperatives in India 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 Rural Credit Cooperatives in India can leverage the sales team experience to cultivate customer relationships as Cfis Rural is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Cfis Rural 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cfis Rural is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rural Credit Cooperatives in India can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Rural Credit Cooperatives in India | 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 Rural Credit Cooperatives in India are -
Building a culture of innovation
– managers at Cfis Rural 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cfis Rural can use these opportunities to build new business models that can help the communities that Cfis Rural operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Cfis Rural 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cfis Rural can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cfis Rural 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 Cfis Rural to hire the very best people irrespective of their geographical location.
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. Cfis Rural can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Cfis Rural in the consumer business. Now Cfis Rural can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Cfis Rural 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.
Loyalty marketing
– Cfis Rural 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cfis Rural 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cfis Rural is facing challenges because of the dominance of functional experts in the organization. Rural Credit Cooperatives in India 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.
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 Cfis Rural 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cfis Rural can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Rural Credit Cooperatives in India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rural Credit Cooperatives in India are -
Consumer confidence and its impact on Cfis Rural 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cfis Rural with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Cfis Rural 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cfis Rural 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 Rural Credit Cooperatives in India .
Environmental challenges
– Cfis Rural 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. Cfis Rural can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Cfis Rural can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rural Credit Cooperatives in India, Cfis Rural 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 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 Cfis Rural is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Cfis Rural 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.
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 Cfis Rural.
Increasing wage structure of Cfis Rural
– 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 Cfis Rural.
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 Cfis Rural business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Rural Credit Cooperatives in India 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 Rural Credit Cooperatives in India 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 Rural Credit Cooperatives in India 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 Rural Credit Cooperatives in India 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 Rural Credit Cooperatives in India 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 Cfis Rural needs to make to build a sustainable competitive advantage.