akpsi case competition

Recap

Cornering the Market: Financial Services for the Underdeveloped World

Juliana Diatezua || Shriya Ganti || Jeanne

Garner ReplicabilityFlexibilityExpansionAudiencePrioritiesAgenda

Agenda

RecapReplicabilityExpansionFlexibilityAudiencePrioritiesAgenda

1. Priorities

2. Audience

3. Flexibility

4. Expansion

5. Replicability

Recap

There are three main questions to answer when entering the industry:

1. What type of demographic are you trying to capture?

3. What is your intent for expansion?

2. What are your goals for long-term independence?

ReplicabilityExpansionFlexibilityAudiencePrioritiesAgenda

Recap

Audience


Recap

The MPESA model shows that a too diverse market creates needless cost.

Dollars Lost/Year transporting cash

Collective Days Lost/Year transporting cash

Dollars Lost/Year for travel fare expenses$3.45 million

115,000

$1,500-$3,900


Recap

Target demographic should be “Bottom of the Pyramid” and lower-middle class consumers.

Why you should choose a B.O.P target demographic

Differentiates being the “only” versus the

“preferred” service

The consumer base is large and relatively

untapped

Company success creates long term reliance

from customers


2 billion people are without financial service access

49.5% mobile penetration in undeveloped countries over 20 years

4.0 billion mobile subscribers worldwide

4.2 billion worldwide population at the BOP

Information to consider


Flexibility

Recap

Choose a money-transfer service model over a mobile banking model.

A money-transfer model identifies the needs of the

consumer base

A money transfer service promotes independence from third

parties A money transfer service reduces overhead

Mobile banking over-estimates the consumer’s needs


Recap

Make mobile networks the main partners of your company.

Benefits of aligning with mobile networks

Avoid instability related to banking services

SIM Cards can be used as a method of identification

Projected increase in mobile phone use makes all consumers

accessible


Recap

Avoid aligning your company with a banking service to avoid unnecessary instability.

Success is dependent on aligning with first tier banks

Business model becomes heavily reliant on external variables

Why to avoid bank partnerships



Expansion

Recap

Aim for quick expansion in order to create traction among consumers.

Models for quick expansion

Cut costs by hiring middlemen seasonally

Pay low wages and diminish overhead; increase this as company grows

Establish a grassroots business model


Recap

Sacrifices made for quick expansion will rectify themselves in the long run.

Adjust model around seasonal activity

Base service on SIM Cards


Accrue debt

Recap

Expanding internationally should be done with extensive knowledge of the new nation.

Required research aspects going forward

A country’s culture should influence the scale of the

expansion model Countries targeted for expansion must have similar economic

atmosphere

New country’s BOP should redefine the target population



Replicability

Recap

Your business model should have low levels of external specification.

A model based around those of lower income can be tailored

more easily

Low levels of initial dependence allow company model to

persist


Avoiding reliance on external factors avoids later

restructuring

Recap


1. Establishment of a niche is key

2. The ideal consumer has few alternatives3. The ideal model reduces variable dependence 4. For expansion, the ideal model sacrifices short term gain5. The ideal model requires little restructuring to replicate

akpsi case competition

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