international business assignment 8
DESCRIPTION
TRANSCRIPT
![Page 1: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/1.jpg)
Page 2
Principles for BoP Market InnovationKelly Poppe-GaleSeptember, 2012
![Page 2: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/2.jpg)
Page 3
Overview
• Mobile Money Transfer Industry
• BOP Classification and Demographics
• BOP Opportunity
• Market for Mobile Money Services
• Models for MMS partnerships
• Kenya
• Afghanistan
• Phillippines
• 12 Principles for BOP Innovation
![Page 3: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/3.jpg)
Mobile Money Transfer Industry
• Reaching the Unbanked• Technology Dependent Banking
![Page 4: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/4.jpg)
Page 5
BoP Consumers
• Population of 4 billion
• They are brand conscious
• They are value conscious
• A higher percentage of money is spent on luxury goods
• They do not own their homes or real estate and therefore do not invest money there
• 85% of residents of one city in India own television sets, blenders, and gas stoves
![Page 5: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/5.jpg)
Page 6
Why BoP Markets for MMT?
• Consumers are:– connecting and
networking– Readily accepting of
advanced technology• Only 4%
penetration of existing companies
![Page 6: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/6.jpg)
Safaricom and M-PESA
• Only MNO in Kenya at launch• Vodaphone owned 40%• Targeted the Unbanked• Population was technologically
prepared• Kenyan Government does not
require bank accounts
![Page 7: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/7.jpg)
M-PESA Success Factors
• Simplicity
• Immediate functionality
• Differentiated fee structure
![Page 8: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/8.jpg)
Page 9
Vodaphone, Roshan and M-Paisa
• Roshan was leading MNO in Afghanistan
• Targeted Microfinance Loans Market
• Low Literacy• High Consumer
education needs
![Page 9: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/9.jpg)
USAID/Microenterprise Access to Banking Services
(MABS) - Philippines
• Smart Communications• Globe Telecom• Targeted large
population of rural banks
![Page 10: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/10.jpg)
Page 11
Recurring Considerations
• Importance of trust in agents
• Volatile market conditions
• Need for education of consumers
![Page 11: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/11.jpg)
• Customer Due Diligence (CDD)
• Know Your Customer (KYC)
• Anti-Money Laundering (AML)
Regulatory Considerations
![Page 12: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/12.jpg)
Page 13
12 Principles of Innovation
• Free accesses to the platform
• Subscription • Flat fee • Tiered transaction
basis.
1. Create a new price-performance envelope
![Page 13: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/13.jpg)
12 Principles of Innovation
2. Offer Hybrid solutions• Match existing structures
for similar services • Offer options when possible
3. Design scalable solutions for ease of adaptation in similar BOP markets
![Page 14: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/14.jpg)
12 P
rinc
iple
s of
Inno
vation
4. Reduce Resource Intensity
5. Design Products for Functionality
6. Develop a logistics Infrastructure
7. Deskill work
![Page 15: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/15.jpg)
Principles of Innovation
8. Inform Customers about product usage
– Transactions– Fees
9. Design products for durability and reliability
10.Research heterogeneity of the population
![Page 16: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/16.jpg)
11.Develop low cost distribution methods
12.Use a systems approach; design platform for ease of new feature introduction
Principles of Innovation
![Page 17: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/17.jpg)
Market Factors
• Literacy• % consumers with
Bank Accounts• Competition• Agent Network
Development• Availability of
Technology• Current Business
Practices
![Page 18: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/18.jpg)
Potential New Players
Grameen BankObopayNokia
![Page 19: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/19.jpg)
Page 20
Recommendations
• Complete a cultural analysis of market
• Determine Government Requirements
• Study consumer behavior
• Adopt best model
![Page 20: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/20.jpg)
Conclusions
• Choose partners carefully
• Best model currently is that of Safaricom in Kenya
• Modify for market conditions and adopt best practices from other models
![Page 21: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/21.jpg)
References
Mas, I., & Ng'weno, A. (2010). Three keys to M-PESA's success: Branding, channel management and pricing. Journal of Payments Strategy & Systems, 4(4), 352-370.
Mas, I., & Radcliffe, D. (2011). Scaling mobile money. Journal of Payments Strategy & Systems, 5(3), 298-315.
Merritt, C. (2011). Mobile money transfer services: The next phase in the evolution of person-to-person payments. Journal Of Payments Strategy & Systems, 5(2), 143-160.
De Sousa, S. (2010). The role of payment systems in reaching the unbanked. Journal Of Payments Strategy & Systems, 4(2), 145-155.
Jack, W., Suri, T., & Townsend, R. (2010). Monetary Theory and Electronic Money: Reflections on the Kenyan Experience. Economic Quarterly (10697225), 96(1), 83-122.
Abdalla, S. (2011). Stock market development and economic growth in Sudan (1995-2009): Evidence from Granger Causality Test. Journal of Business Studies Quarterly, 3(2), 93-105.
Boşcor, D. D., & Brătucu, G. G. (2010). Base-of-the-pyramid global strategy. Bulletin Of The Transilvania University Of Brasov. Series V: Economic Sciences, 311-16.
Majumder, M. (2012). A Critical Approach in Understanding Bottom of the Pyramid Propositions. Journal of Management & Public Policy, 3(2), 18-25.
Prahalad, C. K. (2005). The Fortune at the Bottom of the Pyramid. Wharton School Publishing, Upper Saddle River, NJ.
![Page 22: International business assignment 8](https://reader031.vdocuments.net/reader031/viewer/2022020122/548673ceb4af9f35548b4802/html5/thumbnails/22.jpg)
References
Griffin, R. W., & Pustay, M. W. (2010). International Business. 6th Ed. Upper Saddle River, NJ.
International Finance Corporation, (n.d.) M-money channel distribution case – Afghanistan. World Bank Group. Retrieved September 27, 2012, from: http://www.ifc.org/ifcext/gfm.nsf/AttachmentsByTitle/Tool6.9.CaseStudy-M-PaisaAfghanistan/$FILE/Tool+6.9.+Case+Study+-+M-Paisa+Afghanistan.pdf