Before I debrief our recent Cross Continent MBA (CCMBA) residency in New Delhi, our business case study of a local company, and the critical steps we took towards building a global business competence, I want to take a second to reflect on the past year with my classmates.
Together, we’ve grown and have experienced the challenges of a full-time MBA program along with the day to day responsibilities of life that include full-time jobs, friends, family, engagements and newborns. Reflect on what we have accomplished, my CCMBA ’15 family. We have not only built upon our key business strengths in disciplines across strategy, marketing, finance, and statistical decisions & modeling, but have done so while integrating cultural, global market dynamics, and geopolitical deep-dives across three major global regions thus far: China, Latin America, and India.
So here is to a great first half, and a pat on the back to my fellow B-school warriors…#ccmba15family…trending…
The Business Landscape in India
India was absolutely amazing and is a country with immeasurable cultural and religious diversity. As we learned in our Global Markets & Institutions class, and from my fellow blogger Jennifer Petoskey, India is transitioning towards more inclusive institutions, but while that occurs, remnants of extractive influences continue to affect the business environment today. This presents unique challenges to companies in India, especially when faced with universal business issues such as product pricing and negotiations, supply chain and operational complexities, top-line vs. bottom-line pressures, and maximizing capital efficiencies.
I can’t think of a better way to navigate this landscape than to immerse ourselves in a local business case study of Eko—a mobile banking start-up in India—as part of our core marketing class taught by Professor Carl Mela. Speaking of which, I was ecstatic to have the opportunity to review a case study from the financial services industry—an area where my work background gave me the “home court” advantage.
The 3 C’s (Customers, Competitors and Company) and 4 P’s (Pricing, Promotion, Place and Product) provided the framework that guided our analysis of the Eko business case. Additionally, the opportunity to follow up directly with CEO Abhishek Sinha when he came to our class, and to engage in a thoughtful discussion of his strategic decision making was truly unique.
Talking and Strategizing with the CEO
As we analyzed the case, we learned that one of the key tenets to a healthy modern financial system is the widespread availability and adoption of basic banking services in a country. In India, something as simple as a checking or savings account had been unavailable to more than three-quarters of the country, especially those in traditionally lower income, rural areas. Abhishek Sinha (and his co-founder, Abhinav Sinha) realized this need and sought to apply his extensive telecom experience to create an innovative solution, tailored to both the demographic and the business landscape in India. Thus, Eko was born.
- The Business Model: As Abhishek Sinha explained to the class, the business model leveraged the use of mobile devices, an item that was universally owned in India, as the lynchpin to providing low-cost banking services to the country’s rural and urban markets, especially across the lower end of the economic spectrum. Consumers were able to visit retail outlets and use their mobile device to deposit savings, transfer money, and tend to other basic banking needs.
- Business Challenges: Despite getting out the gate early and achieving market penetration, Eko was faced with limited capital and near-term liquidity constraints. Additionally, it faced increasing price competition and was experiencing net losses that were further exacerbated by the increasing cost burden associated with expansion and educating the consumer in this new market. It was left with few options: (1) continue its current course of expansion, or, among other things, or (2) explore alternative business models.
- Lessons Learned by the CEO: Ultimately, Abhishek Sinha believed that competing on price was not a sustainable strategy. In order for the firm to survive, it must dig deep down into its core business model and innovate. Eko scaled back its expansion efforts to conserve capital and focused on getting its “house in order” so it could maximize profitability at each retail outlet, which it could then scale across its retail network. In doing so, Eko was able to differentiate on customer service and deliver more value to the customer while increasing profitability. With the “house” on more solid ground, its management team is poised to move forward in the future.
The Lessons Come Together
Being in this program, I feel extremely fortunate to be able to lean on the experiences of my peers. Even though at first I felt like I had a firm grasp of the case study on paper, especially following a discussion with the CEO, it was not until I debated the case with my classmates from across the world that I had gained the full spectrum of global business perspectives. It was the combination of these rich experiences shared by my peers, the top-down business case analysis of Eko (shout out to the 3 C’s and 4 P’s), and a discussion with the CEO that brought it all together for me.
It’s only fitting that when I asked my mentor what she remembered and valued most across her management career, she said that it wasn’t the accomplishments or accolades on paper, but it was the talented people she learned from and worked with along the way.
Looking forward to seeing the CCMBA ’15 family on our next residency in Istanbul!