Upload
sumit-chopra
View
46
Download
0
Embed Size (px)
Citation preview
US Market Entry Strategy for Touchtech PaymentsUCD Michael Smurfit Graduate Business SchoolFull-time Master of Business Administration
Agenda
IntroductionProject Scope Industry AnalysisCustomer SegmentationMarket Entry StrategyChallenges to InternationalisationRecommendations
Introduction
International market entry strategy for Touchtech
Academic frameworks to frame understanding
Segmented a market of 12,000+ institutions
We produced a shortlist institutionsGained first-hand information from key decision makers in US financial institutions.
12,000+ Financial Institutions
Project Scope
Phase 1: Business Model AnalysisUnderstanding how Touchtech compete in the market
Phase 2: Market AnalysisDetailed analysis of US market
Phase 3: Academic Literature ReviewFocused literature review on best practice for start-ups, internationalisation, and growing & scaling an organisation
Project Scope
Phase 4: Researching Potential CustomersStarting at a high level with 12,000+ institutions
Complete list of high level potential targets
Deep dive and shortlisting of the highest potential customers
Phase 5: Market Entry StrategyA guideline for Touchtech Outline the risks involved, key contacts, and estimated required resources
Industry AnalysisUS Market Entry Strategy for Touchtech Payments
Industry Analysis
High degree of competition
Authentication market
No preference of end-users
Access to distribution network Reliance on partnerships
Intricate selling process
Industry Analysis
12000+ Banks and CUs Role of new government Geographical distance Credit Union v/s Banks
US Market Analysis
Industry Analysis
Mobile Wallets3D Secure
Shopping Transactions Large scale identity management solutions
Competitor Categories
Industry Analysis
Product offeringLow High
Mat
urity
of p
rodu
ct /
Bran
d Eq
uity
Low
High
Competitor Diversity
Customer SegmentationUS Market Entry Strategy for Touchtech Payments
Customer Segmentation
US Banks & Credit Unions
Customer Segmentation
US Banks & Credit Unions
Customer Segmentation
Banks
Customer Segmentation
Banks: Segmentation Method
US Banks
Group 1 Group 2 Group 3
Asset Size
> $100 bn < $100 bn, > $2bn
< $2 bn
1. Assets:
Customer Segmentation
Banks: Segmentation Method
US Banks
Group 1 Group 2 Group 3
Asset Size
> $100 bn < $100 bn, > $2bn
< $2 bn
1. Assets:
2. Demographics:US Banks
Group 1 Group 2 Group 3
Population
Under 18 18 – 35 yr Over 35 yr
Customer Segmentation
Banks: Segmentation Method
US Banks
Group 1 Group 2 Group 3
Asset Size
> $100 bn < $100 bn, > $2bn
< $2 bn
1. Assets:
2. Demographics:
3. Geographical: Identified banking clusters
US Banks
Group 1 Group 2 Group 3
Population
Under 18 18 – 35 yr Over 35 yr
Customer Segmentation
Banks: $2b - $100b Assets
Customer Segmentation
Banks: Assets & Demographics (18-35)
Customer Segmentation
Banks: Assets, Demos & Clusters
Customer Segmentation
Credit Unions
Customer Segmentation
Credit Unions: Segmentation Method
US Credit Unions
Group 1 Group 2
Asset Size > $2bn < $2 bn
1. Assets: Top 100
Customer Segmentation
Credit Unions: Segmentation Method
US Credit Unions
Group 1 Group 2
Asset Size > $2bn < $2 bn
1. Assets: Top 100
2. Members: Top 100
3. Branches: Top 100
US Credit Unions
Group 1 Group 2
No. of Members
> 150,000 < 150,000
US Credit Unions
Group 1 Group 2
No. of Branches
> 20 < 20
Customer Segmentation
Credit Unions: Top 100 by Assets
Customer Segmentation
Credit Unions: Top 100 by Members
Customer Segmentation
Credit Unions: Top 100 by Branches
Customer Segmentation
Credit Unions: Common 37
Customer Segmentation
1. Strong retail / personal banking section? 2. Technology focused strategy? 3. Online banking capability? 4. Mobile banking capability? 5. Active on social media? 6. Decreased its number of branches over the
past five years? 7. Customer focused strategy? 8. Customer complaints re login / payment
systems? 9. Has new management / CEO been
appointed?
Banks & Credit Unions: Shallow Dive
Customer Segmentation
1. How user friendly is their login platform? 2. How bad are the reviews of their payment /
login systems?3. Do they currently offer Apple Pay / Android
Pay / mobile wallet or any other payment system?
4. Do they currently use a Touch ID technology or any other biometric technology?
5. What is the reason for the % change in branch numbers (if any) over the past 5 years?
6. Do they have a digital development program in place?
Banks & Credit Unions: Deep Dive
Customer Segmentation
Final List : Banks & Credit Unions
Market Entry StrategyUS Market Entry Strategy for Touchtech Payments
Entry Strategy
TouchtechUS Market Entry
None of which can be viewed in isolation
Entry Strategy comprises of four elements -
Formulate a clear mission and vision statement prior to entering the USA
Strategy
Mission: Why we exist?
Vision: What future we want to create?
Mission and Vision
Strategy
Where to locate?- New York
Which market to tackle?- East coast Banks- Nationwide Credit Unions
What is Touchtech’s product offering?
- Explore and establish quickly
Structure, Geography and Focus
Finance
Ensure sufficient resources for market entry 2+ years Establish and affirm cost structure prior to internationalisation.
Understanding costs means you understand your product’s price
point
Costs and Financing
Operations
Don’t get spread too thin? Increased risk of failure by entering multiple geographies
simultaneously
Personnel Establish the right team
Senior US marketing and sales personnel with strong network connections
Junior US personnel Original / founding Irish personnel
Desired founding culture is embedded from initiation Original / founding Irish personnel continuity of desired standards and expectations – mission
and vision Senior management support is imperative during entry phase
strongest team members must be available to support market entry
Leverage Enterprise Ireland’s industry networks as part of the marketing plan
Resources Critical for Success
Operations
Things to know Human resources - critical differentiators between
success and failure. A key reason cited for market entry failure was
shortcomings in personnel and support structures for the market entry programme.
Human resources management costs are high and can be a barrier to entry.
Structural barriers, bureaucratic barriers and cost barriers are low e.g. US company ex-Delaware can be established in three days
Post establishment professional service costs are considerably higher than that of Europe e.g. accountancy, legal services
Resources Critical for Success
Operations
Understand the procurement processes of your clients Procurement processes for some tier 2 banks and
large credit unions will be well-defined, involving multiple business units evaluating the new technologies.
Example: Mountain America FCU’s Chief Risk Officer. (Information acquired through interview at recent CU conference, Belfast)
CUSO’s (Credit Union Service Organisations)
IT Dept. Risk Officer
Procurement Team
Finance
OfficerLegal
Officer CEO
Procurement Process
Marketing
Crucial to attend industry trade shows to gather first hand data
No amount of secondary research can replace primary,
in-person research! Attending tradeshows needs to be a disciplined process.
Establishing contact and pre-arranging meetings Information gathered and managed in a dedicated report
format Accessible and visible to all marketing and sales personnel Utilise CRM software to manage process – make it a
discipline Develop marketing materials based on customer feedback
Exhibiting at trade shows Expensive - $10,000 to $40,000
Marketing Process for the US
Challenges of InternationalisationUS Market Entry Strategy for Touchtech Payments
Challenges
Lucrative returns possible but face an uphill challenge
Attitude to risk from Organisation
Previously un-encountered Barriers-
1. Knowledge
2. Resources
3. Regulations
Challenges of Internationalisation
Challenges
1) Lack of InformationBarriers to informationLimited informationUnreliable informationAbility to identify opportunities
2) New norms of doing business
3) “Outsidership”Breaking into new marketsResistanceLiability of Smallness
Challenge 1: Knowledge
Challenges
1. Not just …..Although it is
Essential
2. Scaling and the experience curve
3. Personnel
4. Networks
$$$
Challenge 2: Resources
Challenges
1. Dodd Frank Act 2010
2. Regulation driving Institution
consolidation
3. Regulation compliance driving IT uptake
4. Regulation fear of jumping ahead of the
curve
Challenge 3: Regulation
RecommendationsUS Market Entry Strategy for Touchtech Payments
Recommendations
Strategy
FinanceOperati
onsMarketi
ng
• Mission and Vision• Geography• Focus
• Funding• Costs
• Logistics• Human Resources• Procurement• Customer Database and
Learn!• Banks AND Credit unions• Trade Shows
Roadmap forward for Touchtech
The Sky is the Limit