Deposita – Whether to Dominate the Value Chain or Not Harvard Case Solution & Analysis

Deposita — Whether to Dominate the Value Chain or Not

Step 01: General Impression

Deposita is an organization that basically is a part of information technology industry. But specifically talking about the sector it serves is the banking sector where the company is looking to provide security to individuals or the consumers, the retail business sector, the retail banking sector and the Reserve Bank. Therefore, Deposita was launched as an Automatic Banking Machine (ABM) whose basic purpose was to secure the cash of its customers. The organization has been doing pretty well so far. In fact it has been performing so good that the management has to decide the future prospect for the company as continuous growth has posed some serious challenges for the company. The company came in to existence 3 years back since then the company has had an unbreakable record of successful track record. The customer retention, customer satisfaction and expertise in the job have all been quite effective and efficient for the company.

The company over a period of time has concentrated on becoming an innovative organization. The company has been quite successful with its strategy of being an innovative company that has launched a new technology to provide safety and security to its clients. The company has looked to enter new markets and have introduced new features over the period of time. The organization has been quite successful with its innovation attribute. The company has looked to facilitate the needs of South Africa where the crime rate is quite high and the security remains a drawback for the consumers, investors and the banks. The main issue for the company is to develop or in fact revisit their strategic plan. The main issue for Deposita is the fact that the company has to pay high deposit fees to banks on each and every transaction. This issue makes them dependant on banks because the regulatory authority lies with the bank. Along with this as the case states, there was an incident when one of Deposita accounts was closed within 48 hour notice only. Basically the bank knew that the ability to deposit cash and receive it lies in the hand of the banks. Along with this, Deposita also confronts the challenge of finding the right tool for cash disbursing mechanism.

The industry is definitely on the growth stage. It is on the growth stage because as the case states since it was founded three years back, the customer demand for ABM has increased drastically. Therefore, the industry is an expanding market. The customer needs have been transferred from regal banking perspective to the more secured ABM tool. Deposita has quite a few options with their future strategic plan. One of the alternatives available for the company is develop or establish a strategic alliance with a bank in the country. Secondly, Deposita can look to develop an integrated system for itself where it minimizes the dependency and involvement of Deposita on banks.

STEP 2: Analysis

The company has been successful with the Automatic Banking Machine (ABM) where the company is serving the needs of customers, businesses and industrial clients to safely deliver their money and deposit on the behalf of businesses. The company has been facing problems with regards to the commitment with banks. Deposita has taken away their market share and people instead of relying on banks has look upon Deposita to secure the company. This has made banks make unfair and unjust approach against Deposita.

The nature of competitive environment of this industry is quite low. Although, banks present a serious competition as well as threat to Deposita and its business model, but since Deposita has a unique and different business model and service criteria; hence, they do not directly become a threat for Deposita.

SWOT Analysis


Easy to Use

The product or the service offered by Deposita is easy to use. Deposita can be used or functioned with just a generator, a cell phone signal and a concrete floor for bolting down the Automatic Banking Machine. The technology was quite easy to use that made the customers attracted towards it.

Innovative Technology

Deposita launched itself as a state of the art Automatic Banking Machine (ABM), which also included a precise and accurate supporting process along with it. The machine was operated through an access card that allowed the machine to activate. Once the machine is activated, it logs the customer and connects it to the machine. Now the client can enter cash into the system through unstructured Supplementary Services Data (USSD), which made sure that the transaction are completed on behalf of the customer into Deposita Automatic Banking Machine.

Crime Control

Since South Africa has been a place where robbery especially of money is a common practice, the introduction of Deposita ABM machine has allowed the customers to safely transfer and deposit their money. Therefore, Deposita introduced an accurate note counting and note validating device that received cash.............................

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Post-Apartheid South Africa has a high crime rate, but the steady growth of income previously disadvantaged black community. Cash is the preferred method of payment for new participants in the economy, but also an attractive target for criminals. Deposita captured business opportunities in this tension, and developed an automated banking machine, basically, "ATM in the opposite direction." Once the business to feed their money in the car on its own territory, the information on the deposit is transmitted via cell phone network in the database Deposita. With the realization that Deposita offers cash management system, which not only eliminates the time, cost and errors of manual counting of money, but also gives businesses the ability to view the cash flow interest in Deposita grew rapidly, both in South Africa and the internationally. The case emphasizes the systemic nature of innovation, technology to support innovation in the bottom of the pyramid, the hyper-mediation, and tensions between the product and geographic expansion, the owners Deposita redirect them to the strategic direction of the entire value chain in cash in South Africa or in international markets, or both . "Hide
by Helen Barnard Source: Richard Ivey School of Business Foundation 13 pages. Publication Date: October 23, 2008. Prod. #: 908M72-PDF-ENG

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