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Essay / Research Paper Abstract
This 4 page paper considers a case study supplied by the student; PRODEM FFP a company supplying banking services to the low income sector in Bolivia. The paper examines the strategy that has been used to compete and create competitive advantages, the longevity of this strategy and why it is so effective. The second part of the paper considers the future of this strategy, along with the opportunities and threats to PRODRUM FFP.
Page Count:
4 pages (~225 words per page)
File: TS14_TEprodum.rtf
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Unformatted sample text from the term paper:
and the need to maximise resources to provide for that market. If we examine this case study in terms of traditional approaches to strategy there the classic use of
innovation by a new market entrant in order to gain access to a difficult market. The company had looked at what the market needed and its own resources and capabilities
in order o get a match. They saw an opportunity in an undervalued market, the market of the low income formal and informal workers in Bolivia, and saw an opportunity.
Michael Porter argues that to survive and thrive a company needs to have a competitive advantage. Porter argues the development of a competitive advantage is to increase the profit
level. This is undertaken by satisfying customer needs. Profit may be created by supplying a product that is the same as other products on the market, at a lower cost,
or by adding extra value to the product which will mean a customer is happier to pay a higher price for the product, a price which is greater than the
cost level of providing that differentiation. As a new competitor the idea of providing themselves at a lower cost may be attractive in the long term, and with the development
of equipment that is much lower costing than that of competitors, for example the $18,000 ATM compared to the traditional $30,000 - $40,000 and the ability of the card to
store information including the account balance, resulting in the lack of need to build a supporting infrastructure are all areas that may give the potential of the company to gain
a cost advantage in the future. In line with this the company is not the cheapest provider of these services, and charges a middle market price. The current strategy
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