Microfinance at Credit Suisse: Linking the TOP with the BOP SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Microfinance at Credit Suisse: Linking the TOP with the BOP
"Microfinance investment opportunities have been well received by Credit Suisse clients seeking socially responsible investments. They provide a ""double bottom line"": a positive financial return (despite the global financial crisis), and a social impact by offering first-time access to financial services to the poor. From $5 million in 2003, total assets under management in microfinance at Credit Suisse reached $1 billion by 2009, and untapped demand is estimated at $300 billion. The firm has positioned itself as a link between the TOP of the wealth pyramid (its clients) and the BOP (base of the pyramid, the poor), but as microfinance comes under fierce criticism for over-indebting the poor, and with a decline in growth, performance and portfolio quality, Credit Suisse must consider its future engagement in this sector of the emerging markets. "
Authors :: Pierre Hillion, Jean Wee, Olivier Rousset
Swot Analysis of "Microfinance at Credit Suisse: Linking the TOP with the BOP" written by Pierre Hillion, Jean Wee, Olivier Rousset includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suisse Microfinance facing as an external strategic factors. Some of the topics covered in Microfinance at Credit Suisse: Linking the TOP with the BOP case study are - Strategic Management Strategies, Entrepreneurial finance, Recession, Risk management, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Microfinance at Credit Suisse: Linking the TOP with the BOP casestudy better are - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Microfinance at Credit Suisse: Linking the TOP with the BOP
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microfinance at Credit Suisse: Linking the TOP with the BOP case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suisse Microfinance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suisse Microfinance 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 Microfinance at Credit Suisse: Linking the TOP with the BOP can be done for the following purposes –
1. Strategic planning using facts provided in Microfinance at Credit Suisse: Linking the TOP with the BOP case study
2. Improving business portfolio management of Suisse Microfinance
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 Suisse Microfinance
Strengths Microfinance at Credit Suisse: Linking the TOP with the BOP | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suisse Microfinance in Microfinance at Credit Suisse: Linking the TOP with the BOP Harvard Business Review case study are -
Analytics focus
– Suisse Microfinance 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 Pierre Hillion, Jean Wee, Olivier Rousset 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.
Superior customer experience
– The customer experience strategy of Suisse Microfinance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Suisse Microfinance 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 Suisse Microfinance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Suisse Microfinance 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.
High brand equity
– Suisse Microfinance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suisse Microfinance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Suisse Microfinance 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 Suisse Microfinance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microfinance at Credit Suisse: Linking the TOP with the BOP Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Suisse Microfinance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suisse Microfinance 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.
Low bargaining power of suppliers
– Suppliers of Suisse Microfinance in the sector have low bargaining power. Microfinance at Credit Suisse: Linking the TOP with the BOP has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suisse Microfinance to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Suisse Microfinance is present in almost all the verticals within the industry. This has provided firm in Microfinance at Credit Suisse: Linking the TOP with the BOP 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.
Ability to recruit top talent
– Suisse Microfinance is one of the leading recruiters in the industry. Managers in the Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Microfinance at Credit Suisse: Linking the TOP with the BOP 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.
Effective Research and Development (R&D)
– Suisse Microfinance 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 Microfinance at Credit Suisse: Linking the TOP with the BOP - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Microfinance at Credit Suisse: Linking the TOP with the BOP | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Microfinance at Credit Suisse: Linking the TOP with the BOP are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Suisse Microfinance has relatively successful track record of launching new products.
Products dominated business model
– Even though Suisse Microfinance 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 - Microfinance at Credit Suisse: Linking the TOP with the BOP should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Microfinance at Credit Suisse: Linking the TOP with the BOP, 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.
Lack of clear differentiation of Suisse Microfinance products
– To increase the profitability and margins on the products, Suisse Microfinance needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Suisse Microfinance 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. Suisse Microfinance 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Microfinance at Credit Suisse: Linking the TOP with the BOP, in the dynamic environment Suisse Microfinance has struggled to respond to the nimble upstart competition. Suisse Microfinance has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Suisse Microfinance supply chain. Even after few cautionary changes mentioned in the HBR case study - Microfinance at Credit Suisse: Linking the TOP with the BOP, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suisse Microfinance vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Suisse Microfinance 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suisse Microfinance is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Microfinance at Credit Suisse: Linking the TOP with the BOP can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Suisse Microfinance 's lucrative customers.
Interest costs
– Compare to the competition, Suisse Microfinance 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.
Opportunities Microfinance at Credit Suisse: Linking the TOP with the BOP | 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 Microfinance at Credit Suisse: Linking the TOP with the BOP are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Suisse Microfinance 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.
Leveraging digital technologies
– Suisse Microfinance 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suisse Microfinance can use these opportunities to build new business models that can help the communities that Suisse Microfinance operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Building a culture of innovation
– managers at Suisse Microfinance 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 Leadership & Managing People segment.
Manufacturing automation
– Suisse Microfinance 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Suisse Microfinance 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 Suisse Microfinance to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Suisse Microfinance 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 Suisse Microfinance has opened avenues for new revenue streams for the organization in the industry. This can help Suisse Microfinance to build a more holistic ecosystem as suggested in the Microfinance at Credit Suisse: Linking the TOP with the BOP case study. Suisse Microfinance can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Suisse Microfinance 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.
Better consumer reach
– The expansion of the 5G network will help Suisse Microfinance to increase its market reach. Suisse Microfinance 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.
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 Suisse Microfinance in the consumer business. Now Suisse Microfinance can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Suisse Microfinance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Microfinance at Credit Suisse: Linking the TOP with the BOP 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.
Developing new processes and practices
– Suisse Microfinance 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.
Threats Microfinance at Credit Suisse: Linking the TOP with the BOP External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Microfinance at Credit Suisse: Linking the TOP with the BOP are -
Environmental challenges
– Suisse Microfinance 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. Suisse Microfinance can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Suisse Microfinance 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.
Shortening product life cycle
– it is one of the major threat that Suisse Microfinance is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Suisse Microfinance 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
– Suisse Microfinance 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.
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 Suisse Microfinance.
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. Suisse Microfinance needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Suisse Microfinance in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Suisse Microfinance
– 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 Suisse Microfinance.
Technology acceleration in Forth Industrial Revolution
– Suisse Microfinance has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Suisse Microfinance 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Suisse Microfinance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Suisse Microfinance 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 Microfinance at Credit Suisse: Linking the TOP with the BOP, Suisse Microfinance 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 .
Weighted SWOT Analysis of Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Microfinance at Credit Suisse: Linking the TOP with the BOP 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 Suisse Microfinance needs to make to build a sustainable competitive advantage.
