Deposita: Whether to dominate the value chain or not

Author :

Helena Barnard

Pages :

13

Product Type :

Case

Reference # :

Ivey 9B08M027

Teaching Note :

Yes - see separate upload

Institute:

GIBS, Univ of Pretoria

Setting:

South Africa, small organisation

Year:

2008

Keywords:

AABS Case Competition Winner, Expansion , Innovation , Expansion Option , Hypermediation , Product versus Geographic Expansion , Home Country Advantages

Summary/Abstract:

Post-Apartheid South Africa has been characterized by high levels of crime, but also by sustained increases in the income levels of the previously disadvantaged black community. Cash is the preferred method of payment for new entrants into an economy, but it is also an attractive target for criminals. Deposita has seized the business opportunity presented by this tension, and developed an automated banking machine, basically an "ATM in reverse." As soon as businesses feed their cash into the machine on their premises, information about the deposit is relayed via a cellphone network to the Deposita database. With the realization that Deposita offers a cash management system that not only eliminates the time, cost and inaccuracies of manual cash counting, but also gives businesses remote visibility into the movement of cash, interest in Deposita grew rapidly, both within South Africa and internationally. The case highlights the systemic nature of innovation, technology-enabled innovation at the base of the pyramid, hyper-mediation, and the tension between product and geographic expansion as the owners of Deposita redirect their strategic focus to the entire cash value chain in South Africa or to international markets or both.