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 - – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Successful track record of launching new products
– Cdlfs Community has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cdlfs Community 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.
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.
Sustainable margins compare to other players in Finance & Accounting industry
– Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds firm has clearly differentiated products in the market place. This has enabled Cdlfs Community to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Cdlfs Community to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
Organizational Resilience of Cdlfs Community
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cdlfs Community does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Cdlfs Community is one of the most innovative firm in sector. Manager in Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Cdlfs Community in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cdlfs Community 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.
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.
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.
Slow to strategic competitive environment developments
– As Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds HBR case study mentions - Cdlfs Community 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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds 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 Cdlfs Community 's lucrative customers.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds, is just above the industry average. Cdlfs Community 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.
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.
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 -
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. Cdlfs Community can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Manufacturing automation
– Cdlfs Community 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cdlfs Community can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cdlfs Community can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Cdlfs Community 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.
Creating value in data economy
– The success of analytics program of Cdlfs Community has opened avenues for new revenue streams for the organization in the industry. This can help Cdlfs Community to build a more holistic ecosystem as suggested in the Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds case study. Cdlfs Community can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cdlfs Community 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 Cdlfs Community to hire the very best people irrespective of their geographical location.
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 -
Regulatory challenges
– Cdlfs Community 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 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cdlfs Community 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 Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds .
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.
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds, Cdlfs Community 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 .
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 Cdlfs Community in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Breaking Down Barriers, Rebuilding Walls: The Role of Community Development Loan Funds