The Growth Dilemma at GrameenKoota Harvard Case Solution & Analysis

In 2010, the Indian state of Andhra Pradesh made regulatory reforms in the microfinance industry that led to various crises in the industry, butGrameenKoota succeeded to avoid any aftereffects of the crisis.It also produced impacts on the sustainability of the industry as it lost many of its fundingsources. The managing director of GrameenKoota, Suresh Krishna, was concerned about the decline in growth, after the evaluation of the company’s last two years performance.This volatile situation of the industry also integrated with the varying regulatory environment.

Krishna needed to evaluate that whether it would be better to expand operations to new districts and states to embrace the growth opportunities or to consolidate and grow in the current market. It represents a high risk in focusing operations in a few stateswhich, accompanied by uncertain regulatory environment. Whileswitching towards new markets could possibly dissolve the low margins.As the decision was critical, Krishna needed to ensure that he pursue a most appropriate approach after a detailed analysis of the associated opportunities, costs, and risks with her decision.

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