Instructions
Students are required to perform an individual assignment analyzing a new opportunity. The instructor will assign a firm to each student and the student will come up with a new business opportunity for the firm which they will then analyze and research.
My Firm: http://www.ioufinancial.com
( IOU FINANCIAL)
Each student will write an assignment for their firm that encompasses three parts:
1) Concept statement (5%)
2) Competitive analysis grid (5%)
3) Market/industry analysis (5%)
The concept statement provides details on a new product/service that the student will choose and which the firm has not yet introduced. The competitive analysis grid defines important characteristics of the new product/ service and compares them across competitors. The market/ industry analysis requires the completion of the market/industry worksheet for the chosen firm.
Each of these items will be discussed in class as the class progresses.
Information on each of these elements can be found here:
1. Concept Statement: Barringer and Ireland, chapter 3, page 83.
2. Competitive Analysis: Barringer and Ireland, chapter 5, page 168.
3. Market/Industry Analysis: a step-by-step guide is given here:
http://www.concordia.ca/
There is a document on this site called “the business plan research worksheet” which you should edit and hand in. Note you do not need to hand in the SME benchmarking information or the executive summary from IBISworld.
Please write double-spaced, Times New Roman, Font Size 12, maximum of 5 pages (including references). The allocation of pages should be approximately as follows: concept statement (1 page), competitive analysis (1-2 pages), market/industry analysis (1-2 pages), and references (1 page).
Essay
Business Analysis
Concept Analysis
The products of IOU Financial will be online money transfer services in Canada and the USA. Moreover, the company will provide loans sent to recipients when necessary. Currently, the targeted market includes the customers in USA and Canada. The company targets individuals who are involved in wire transfer of money especially the small business owners (IOU Financial, 2015). With the advent of technological development and its embracement, there is need for implementation of this venture. There is also a need for development in wire transfer sector to reflect the changing needs of customers with technological advancement.
Despite allowing people to send deposited money, the company will provide loans to customers who wish to send money but who are lacking finances during such need. Currently, there no company that allows the customers to send money without depositing the money to them. IOU Financial is lead by a well-experienced and skilled team of managers. The CEO Phil Marleau has made the company to be among the fastest growing financial institution.
Competitive analysis grid
| Competitive Factor | IOU Financial | Western Union | Tranfast | Ria Money Transfer | TransferWise |
| Cost | Even | Even | Even | Even | Advantage |
| Uniqueness | Advantage | Even | Even | Even | Even |
| Global coverage | Disadvantage | Advantage | Advantage | Even | Advantage |
| Time | Advantage | Disadvantage | Even | Disadvantage | Disadvantage |
The principal competitive factors identified in the money transfer include the cost, uniqueness of the service, global coverage and the time required for the transfer of the money. The major competitors identified include the Western Union, Tranfast, Ria Money Transfer Services, and the TransferWise. All the companies are based in the USA and Canada.
IOU Financial will eliminate intermediary banks to cut the cost of sending money (IOU Financial, 2015). It will also act as a significant factor in reducing transfer time. Banks consumes time when confirming the authenticity of the receiver.
Most IOU Financial competitors provide services globally and hence have an advantage compared to it. However, IOU Financial will provide unique and quality services in the United States and Canada that will enable it to compete effectively (IOU Financial, 2015).
IOU Financial will offer credit to its customers for sending to their recipients (IOU Financial, 2015). Such service will help its customers to send money when they do not have the money or when under tight schedules.
IOU Financial will enable the business people to access money in the shortest period possible. Thus, the IOU Financial has an advantage over other companies on the time required to receive and access the money (IOU Financial, 2015). IOU Financial will allow real-time access to money that other operators do not allow.
Market/Industry Analysis
| Steps | |
| o | a. Description of the project
The IOU Financial would provide services for the transfer of money to the United States and Canada. The services will focus on the small businesspersons. They will be allowed to send any amount of money at a commission of one percent of the amount sent. Otherwise, the IOU Financial will lend up to a maximum of $1500 000 at an interest rate to its customers. |
| b. Geographical focus
Initially, the business would be restricted to the United States and Canada residents with expansion afterwards. The local market would facilitate the company to form a firm background to extend to the other parts of the world. |
|
| c. Users
The services are mainly directed to the small business owners. The major small business owners come from the restaurants, e-commerce, medicine, retail, and grocery stores. |
|
| 1 Understanding industry | NAICS CODES
Code Title 522110 Commercial Banking 523110 Investment Banking and Securities Dealing 522291 Consumer Lending TRADE ASSOCIATION 1. Long Syndications and Trading Associations (LTSA) It is non-profit making organization formed in 1995 to improve the practices and the standards in the money lending industry. 2. National Money Transmitters Associations It is an association of the people and companies involved in the remittance of money in the USA. |
| 2 company and industry | SME Benchmarking is not required
IBIS WORLD is not required |
| 3 competitors | COMPETITORS
The primary competitors include Western Union, Transfast, Ria Money Transfer, TransferWise, HyperWallet and Money Gram |
| 3 Government information | Canada Industry Statistics
Lending Industry In Canada, it was found that the market for loans grew at a rate of about 6%. Remittance Industry There is a potential for the growth of the remittance business in Canada due to the presence of immigrants who send about $24 annually (Canada Mortgage Trends, 2015). GOVERNMENT REGULATIONS Canada Revenue Agency requires all the companies involved in money transfer to submit reports to the tax regulator (Canadian Revenue Authority, 2015). Licences IOU Financial should seek advice concerning obtaining a license as required by the government. |
| 5 Market and consumer data | Consumer trends
There has been a significant change in the consumer needs in the Canada. The customers appreciate the advantages of the e-commerce and hence its use. The company ought to consider security concerns of customers. |
| 6 Statistics Canada | The total population in 2011 amounted to 33,476,688. In that number, 13,320,614 people represented the population of the private dwellings that were occupied by usual people. It was reported that every province in Canada saw its population increase between the years 2006 and 2011. |
| 7 Market Share | Total Revenue/ $510 000
Total market share: 3695754 000 000 510 000/3695754 000 000 = 0.00001379 |
| 8 news and articles | Hill (2015) argued that there was a need for action from the government and industry to provide transparent communication on the environmental problems facing industries. Schereyer (2014) argued that there is a need for trade associations in Canada to enhance the quality of the services provided by their members. Tomblin and Colgan (2014) addressed the reality and myths regarding regionalism in Canada and the issue of market leadership and competition.
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References
Canada Mortgage Trends. (2015). Mortgage industry reports. Retrieved from, http://www.canadianmortgagetrends.com/canadian_mortgage_trends/category/mortgage-industry-reports
Canadian Revenue Agency. (2015). Electronic Funds Transfer Reporting. Retrieved from, http://www.cra-arc.gc.ca/gncy/cmplnc/eft-ti/menu-eng.html
Hill, G. (2015). “The Industry Feels Unloved:” Economic Rhetoric and Environmental News Coverage of Lake Winnipeg, Canada. International Journal Of Interdisciplinary Environmental Studies, 9(1), 17-27.
IOU Financial. (2015). IOU Financial closes USD $99.5 in loan originations in 2014. Retrieved from, http://ioufinancial.com/2015/06/iou-financial-closes-usd-99-5-million-in-loan-originations-in-2014-2/
Schreyer, C. (2014). Canadian Geography as National Identity: Hudson’s Bay Company Place Names and their Aboriginal Counterparts. International Journal Of Canadian Studies, (49), 315-333.
Tomblin, S. G., & Colgan, C. S. (2014). Myth and reality in eastern Canada-northeastern u.s. regionalism. Canadian-American Public Policy, (82), 1-38.
