Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds
Community Development Loan Funds (CDLFs) make up the largest sector of the community development finance industry, with more than 800 certified CDLFs. Ninety-eight percent of CDLFs are nonprofit, servicing mainly the small business sector, with the help of the CDFI Fund, the Small Business Administration, and, increasingly, mainstream banks. CDLFs venture into risky areas where others sometimes fear to go, yet they have high repayment figures and low loss rates.
Swot Analysis of "Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds" written by Gregory Fairchild, Jackie Thomas-Kennedy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cdlfs Community facing as an external strategic factors. Some of the topics covered in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing transportation and logistics costs,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cdlfs Community, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds can be done for the following purposes –
1. Strategic planning using facts provided in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds case study
2. Improving business portfolio management of Cdlfs Community
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 Cdlfs Community
Strengths Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cdlfs Community in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds - 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
– Cdlfs Community 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 Cdlfs Community 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
– Cdlfs Community is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Cdlfs Community 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.
Low bargaining power of suppliers
– Suppliers of Cdlfs Community in the sector have low bargaining power. Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cdlfs Community to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Cdlfs Community is one of the leading recruiters in the industry. Managers in the Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Cdlfs Community 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 Cdlfs Community is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Cdlfs Community 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.
Highly skilled collaborators
– Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Cdlfs Community digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cdlfs Community has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Cdlfs Community 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 Gregory Fairchild, Jackie Thomas-Kennedy 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.
Weaknesses Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds are -
Interest costs
– Compare to the competition, Cdlfs Community has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Cdlfs Community 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 - Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds can leverage the sales team experience to cultivate customer relationships as Cdlfs Community is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds, in the dynamic environment Cdlfs Community has struggled to respond to the nimble upstart competition. Cdlfs Community has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregory Fairchild, Jackie Thomas-Kennedy suggests that, Cdlfs Community 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 Cdlfs Community 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds, it seems that the employees of Cdlfs Community 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.
Slow decision making process
– As mentioned earlier in the report, Cdlfs Community 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. Cdlfs Community 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.
Capital Spending Reduction
– Even during the low interest decade, Cdlfs Community 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.
Lack of clear differentiation of Cdlfs Community products
– To increase the profitability and margins on the products, Cdlfs Community needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds, 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.
Opportunities Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds | 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cdlfs Community can use these opportunities to build new business models that can help the communities that Cdlfs Community operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Cdlfs Community 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cdlfs Community can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cdlfs Community to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Cdlfs Community 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.
Building a culture of innovation
– managers at Cdlfs Community 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.
Developing new processes and practices
– Cdlfs Community 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.
Better consumer reach
– The expansion of the 5G network will help Cdlfs Community to increase its market reach. Cdlfs Community 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cdlfs Community 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, Cdlfs Community is facing challenges because of the dominance of functional experts in the organization. Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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.
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. Cdlfs Community can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Cdlfs Community can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds are -
Stagnating economy with rate increase
– Cdlfs Community 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.
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.
Environmental challenges
– Cdlfs Community 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. Cdlfs Community can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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. Cdlfs Community needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Cdlfs Community is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Cdlfs Community has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Cdlfs Community 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.
High dependence on third party suppliers
– Cdlfs Community 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.
Consumer confidence and its impact on Cdlfs Community 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.
Increasing wage structure of Cdlfs Community
– 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 Cdlfs Community.
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 Cdlfs Community business can come under increasing regulations regarding data privacy, data security, 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 Cdlfs Community.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cdlfs Community with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Cdlfs Community needs to make to build a sustainable competitive advantage.
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