Question

please explain about swot analysis of grameen bank.

I just want to know the strengths and weaknesses but please add why it is important!

Answer 1

Grameen Bank is among the leading companies in its sector, and that position must be maintained. Grameen Bank checks the SWOT analysis regularly, and uses it to make strategic decisions. In order for the company to conduct a SWOT analysis, an interactive process must be undertaken by coordinating between all the company's departments such as finance, marketing, operations, human resources, logistics, strategic planning, management information systems etc.

Strengths of Grameen Bank

Distribution and Reach: Grameen Bank has a large number of outlets in almost every state, supported by a strong distribution network that ensures a large number of customers can easily access their products in a timely manner.
Cost structure: The low-cost structure of Grameen Bank helps it to produce at a low cost and to sell its products at a low price, making it affordable for its clients.
Dealer Community: Grameen Bank has a strong relationship with its dealers that not only supplies them, but also focuses on promoting the products and training of the company.

Financial position: Grameen Bank has a strong financial position with consecutive earnings over the last 5 years, together with accumulated income reserves that can be used to fund future capital spending.
Grameen Bank has a large base of assets which gives it better solvency.
Return on Capital Expenditure: Grameen Bank has in the past succeeded in producing positive returns on the capital expenditure it has incurred for various projects.

Weaknesses of Grameen Bank

Research and Development: While Grameen Bank spends more than the industry's average R&D budget, it is spending far less than a few industry players who have had a significant advantage as a result of their innovative products.
High Day Sales Inventory: The time it takes to buy and sell goods is higher than the industry average, meaning Grameen Bank builds on inventory adding unnecessary costs to the company.
Rented Property: A substantial proportion of the property owned by Grameen Bank is leased rather than purchased. It has to pay large sums of rent to add to its expenses on those.

Low current ratio: The current ratio indicating the willingness of the company to meet its short-term financial obligations is lower than the average industry. This might mean the company could have issues with liquidity in the future.
Compared to current liabilities, the company has low levels of current assets and this can cause liquidity problems in operations for it.
Cash flow problems: Grameen Bank lacks proper financial planning with regard to cash flows, leading to certain circumstances where cash flow is inadequate as needed, resulting in excessive unplanned borrowing.

Opportunities of Grameen Bank

Internet: The number of internet users around the world has been growing. Which means Grameen Bank has an opportunity to expand its online presence; by using the internet to connect with its customers.
E-commerce: the e-commerce industry has seen a new trend and rise in revenue. This means that many people are making online purchases now. Through opening online stores and making sales through them, Grameen Bank will earn revenue.
Social media: the number of social media users worldwide has grown. The three social media platforms, Facebook, Twitter and Instagram, reported the highest number of monthly active users rise

Threats of Grameen Bank

Competitor-led technological innovations; new technological advances by a few industry rivals pose a threat to Grameen Bank as customers drawn to this new technology may be lost to competitors, reducing the overall market share of Grameen Bank.
Suppliers: The suppliers ' bargaining power has increased over the years with the number of suppliers decreasing. This means that input costs for Grameen Bank will grow.
New entrants: numerous players have joined the market and are gaining market share by purchasing market share from existing companies. This is a threat to Grameen Bank as it will be able to lose its customers to those new members.