Case Study Description of Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A)
University of California, Berkeley-Haas collectionIn January 2013, Nat Robinson, the 32-year old CEO of Juhudi Kilimo, is faced with the challenge of how to best introduce and implement an incentive plan among the microfinancing institution's (MFI) 78 employees. Established in 2004, Juhudi Kilimo provides microloans to Kenya's rural population and had approximately 10,000 customers at year-end 2012. With a new round of capital, Juhudi Kilimo's present goal is to scale-up and increase its customer base by ten-fold -- to 100,000 -- by the end of 2015. Robinson now wonders how he can best design an incentive plan -- particularly for its 36 loan officers -- that will allow the MFI to reach this goal most efficiently and effectively. Please note: this case also has a supplementary case available. The (B) supplement can be found using product number B5790.
Swot Analysis of "Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A)" written by Kristiana Raube includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Juhudi Kilimo facing as an external strategic factors. Some of the topics covered in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) case study are - Strategic Management Strategies, Emerging markets, Financial management, Human resource management, Labor, Managing yourself, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Juhudi Kilimo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Juhudi Kilimo 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) can be done for the following purposes –
1. Strategic planning using facts provided in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) case study
2. Improving business portfolio management of Juhudi Kilimo
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Juhudi Kilimo
Strengths Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Juhudi Kilimo in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) Harvard Business Review case study are -
Organizational Resilience of Juhudi Kilimo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Juhudi Kilimo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Juhudi Kilimo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Juhudi Kilimo 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Juhudi Kilimo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Juhudi Kilimo 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.
Analytics focus
– Juhudi Kilimo 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 Kristiana Raube 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
– Juhudi Kilimo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Juhudi Kilimo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Juhudi Kilimo is one of the most innovative firm in sector. Manager in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Juhudi Kilimo 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 Juhudi Kilimo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Juhudi Kilimo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Juhudi Kilimo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Juhudi Kilimo 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.
Diverse revenue streams
– Juhudi Kilimo is present in almost all the verticals within the industry. This has provided firm in Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Juhudi Kilimo 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) are -
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 Juhudi Kilimo supply chain. Even after few cautionary changes mentioned in the HBR case study - Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Juhudi Kilimo vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Juhudi Kilimo 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A), is just above the industry average. Juhudi Kilimo 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Juhudi Kilimo has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kristiana Raube suggests that, Juhudi Kilimo 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.
High cash cycle compare to competitors
Juhudi Kilimo has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Juhudi Kilimo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Juhudi Kilimo 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. Juhudi Kilimo 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) HBR case study mentions - Juhudi Kilimo 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.
Skills based hiring
– The stress on hiring functional specialists at Juhudi Kilimo 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.
Opportunities Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) | 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) are -
Creating value in data economy
– The success of analytics program of Juhudi Kilimo has opened avenues for new revenue streams for the organization in the industry. This can help Juhudi Kilimo to build a more holistic ecosystem as suggested in the Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) case study. Juhudi Kilimo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Juhudi Kilimo 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 Juhudi Kilimo to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Juhudi Kilimo to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Juhudi Kilimo can use these opportunities to build new business models that can help the communities that Juhudi Kilimo operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Juhudi Kilimo 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, Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Juhudi Kilimo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Juhudi Kilimo can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Buying journey improvements
– Juhudi Kilimo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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, Juhudi Kilimo 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.
Developing new processes and practices
– Juhudi Kilimo can develop new processes and procedures in Leadership & Managing People 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.
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 Juhudi Kilimo 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Juhudi Kilimo is facing challenges because of the dominance of functional experts in the organization. Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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.
Using analytics as competitive advantage
– Juhudi Kilimo 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Juhudi Kilimo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) are -
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 Juhudi Kilimo business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Juhudi Kilimo 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. Juhudi Kilimo can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Juhudi Kilimo 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 Leadership & Managing People industry regulations.
Stagnating economy with rate increase
– Juhudi Kilimo 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.
High dependence on third party suppliers
– Juhudi Kilimo 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Juhudi Kilimo in the Leadership & Managing People industry. The Leadership & Managing People 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Juhudi Kilimo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A), Juhudi Kilimo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Technology acceleration in Forth Industrial Revolution
– Juhudi Kilimo has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Juhudi Kilimo needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Consumer confidence and its impact on Juhudi Kilimo 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.
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. Juhudi Kilimo needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Juhudi Kilimo will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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 Juhudi Kilimo: Designing Microfinance Staff Incentive Plans (A) 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 Juhudi Kilimo needs to make to build a sustainable competitive advantage.
