Swot Analysis Of Norsad Finance

1. Executive Summary

Norsad Finance Limited is a development finance company which has been in existence since 1990. At its inception the business was established a multilateral entity owned by Governments. Its primary role was to provide foreign currency to SADC member states and to facilitate trade between them and the Nordic countries during the apartheid era. This has since changed and since 2012 the business has been undergoing transformation into a commercially driven development finance company. Following the 2012 transition, a strategic decision was made by the board to diversify the company’s product portfolio. In addition to the debt instruments, Norsad Finance has diversified its product offering to include mezzanine finance

However the company is not able to fully exploit this potential and performance objectives are often unmet.

• The major reason for failure to fully exploit the market potential is the top down approach in formulation of strategy. As a result of the foregoing there is no buy in from subordinates who are the drivers of the strategy

• The mission is clear and spells out what the business stands for and intends to achieve. However the vision in too long and has some elements of a mission which makes it very confusing. Because of its length it is not easy to absorb and internalise.

• The company has no set of core values which are intended to shape the organisational culture.

• There is a general mistrust and fear within the organisation. This stifles progress and impacts negatively on the company’s performance against set objectives.

• Decision making is vested on very few high ranking members. This has the potential to stifle progress and also does not afford the department an opportunity to benefit from the knowledge and experiences of all its

Because of these characteristics of the company is very agile and is able to respond to customer requirements in relatively short periods compared to competition. iv) Low operating costs

Success in the financial services sector hinges largely on the ratio of costs to income. In the case of Norsad the company is able to maintain low costs due to its lean structure.

v) Financially strong shareholders

The shareholders are government owned development finance institutions which have sizeable balance sheets. These institutions are able to syndicate with the company. This is beneficial on two fronts. Norsad is able to share investment risk with the partner institutions and it is also able to pursue larger transactions.

2.2 Weaknesses:

i) Poor geographical coverage of the region

The company has only one office in Gaborone which services the entire region. This is a major shortcoming which results in the company incurring travel costs which could be avoided. Furthermore like any other business, transactions in the financial services sector are dependent on relationships. With only one office, forging strong relationships with clients in other markets is a