I. Executive Summary
Strategic management has been given significant attention for this few decades, because of its mass contribution to the success of the company’s long term goal. The word “Strategy” has its roots of military science, deriving from the Greek’s word “Strategos” meaning plan the destruction of one’ enemies through effective use of resources.” (Calingo, n.d, as cited in Ting, 2012a, p. 8). A successful company has a very practical strategy. NIRON ADEC, one of the microfinance institutions in Cambodia, also has its own weapon – the strategy – to compete in this market. In 4 years time, NIRON has 41 branches located all around Cambodia, with 925 staffs, 53,120 clients, and a gross loan portfolio of over USD 5,000,000. For 2012 strategy, NIRON wants to be the easiest accessible financial product to all customers around Cambodia. With this view, NIRON has a very clear vision and mission, objective, and SWOT analysis. It has decided to shape their focus on three points in order to achieve their objectives which are to expand their operational coverage to 45 branches, use a direct collection and disbursement method, and to be the fastest loan provider. In doing so, they have uses the following tools: * Opening new branches
* Developing new policies and procedures
* Training and recruiting people
After implementing the strategies NIRON has met most of its objectives. This happens because the strategic makers understand well where they are and where they want to be in the future and they have come up with a very competitive strategy which is to provide the most convenient services to customer. Despite having met their objectives, a few flaws have been found. Firstly, it has been operated with a very high operational cost and a poor productivity rate. Secondly, they have not considered about their resources limitation before implementing the strategy, which leads to a low staff capacity and low productivity. In addition, they do not even have clear control guidelines for staffs to evaluate the strategy.
Therefore, in order to make the best use out of this strategy, I recommend the following points to be implemented. First, they should be more concern about the productivity and their cost analysis. Second, they have to identify all available resources such as financial, human, physical, and technical resources, before coming into implementation. Next, they should build their staff capacity through selecting the right person for the right job, which means select a well educated on to work. Furthermore, they also should introduce a pay for performance systems and profit sharing system in order to motivate their staffs to achieve the objectives. A strategic control should also be put along with the balance scorecard so that it will act as a tool to illustrate and deliver all strategy into practical implementation process
II. Background of NIRON ADEC
NIRON ADEC is an emerging financial institution which provides micro-loan to poor and medium class Cambodian citizen everywhere in Cambodia. Despite having just been opened in 2008, NIRON has gained dramatic recognition from other local financial institutions for their excellent market penetration strategy. By the end of September 2012, NIRON has 41 branches located all around Cambodia, 925 staffs, 53,120 clients, and a gross loan portfolio of USD 5,157,143. Table 1: Operational and Financial Highlight of NIRON
Source: NIRON ADEC, September, 2012a, p. 5
III. Strategic Management Process
To stay competitive and sustainable in this hyper competitive era, NIRON has to be creative and innovative with their strategy, despite having gained a large market share. 1. Vision and Mission
Unlike some companies in developing countries, NIRON has a clear vision and mission in doing this business. Table 2: NIRON ADEC’s Vision and Mission
Source: NIRON ADEC, 2012a, p. 10
2. Analysis – SWOT Analysis
The SWOT of the company is analyzed and...
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