Lending Club’s Loose- Door Policy
Lending Club is a lending company, which lends from peers to peers. The company has its shares trading in the Securities Exchange Market but according to the article, the prices of its stocks are very high with the high risk that an investor in the shares is exposed to. The high risks and prices of the stocks make it expensive for a person to be admitted to the company. However, the company has promised to combine its analyses on proprietary credit and innovation in the technology sector. Such a combination will help in the transformation of the company’s banking system to reduce the costs of credit and reward more investments accordingly.
The high share price of the company is a problem because it exposes the company to more threats in its operations. Some of the threats that the company faces from its SWOT analysis include the increasing interest rates, possibly due to low demand of credit by potential customers and increasing inflation rates, which deteriorate the performance of the company, thus reducing its profitability (Ashta 127). With the high risks that buyers of the shares of the company are exposed to, the high profitability levels and revenues, which is one of the strengths of the company is threatened. Small business sectors, which are a major weakness of the company, are also threatened.
It is important that strategists scan the environment fully to determine the strategic decisions to make in respect to a particular opportunity that a business would make use of to solve a problem. To counter threats and its weaknesses, the company will enter into global markets, which will build a strong user base and demand of its shares. Through hedging techniques and its advanced technology, the company will be able to reduce the high risks that potential investors are exposed to (Stephany 176). Through the risk reduction, the share prices will reduce, and therefore attract new investors.
Ashta, Arvind. Advanced Technologies for Microfinance: Solutions and Challenges. Hershey, PA: Business Science Reference, 2011.
Stephany, Alex. E-marketing: Concepts, Methodologies, Tools, and Applications. Hershey, PA: Business Science Reference, 2012.