A leading financial services company based in Philadelphia, PA needed to identify new business segments so as to garner greater market share. They needed to achieve this by leveraging their existing resources & with a minimal amount of additional spending.
The client requested Relevante to develop a strategic overview document which would identify the specific segment in the financial services domain that they needed to expand into.
Relevante’s professionals identified the lucrative factoring industry as the core new business segment. This business segment fitted in well with the client’s existing leasing business as it was a forward integration of its existing business line and could be done without incurring large capital as well as revenue expenditure. Factoring services coupled with related financial services like credit recommendation services & private label programs gave the client the ability to increase its revenues & profitability thereby successfully leveraging their existing resources to achieve greater productivity.
Relevante’s professionals prepared a detailed overview document which highlighted the following:
Size of the factoring industry
Relevante’s professionals sized up the existing and the potential market both internationally and within the USA. This analysis enabled the client to understand the various facets of the opportunity that lay ahead of them.
Competitive landscape in the USA
The Relevante team analyzed the existing players in the factoring industry on various parameters including turnover, market share, geographical presence, focus areas of business, profitability etc. This analysis enabled the client to understand the benefits that they could achieve by leveraging their existing resources to a greater extent.
Factoring Products
The existing product offerings of the competition were analyzed and the high revenue drivers were identified by the Relevante team which was factored into the recommendations made to the client.
Financial models used by the competition
The financial models of the competition were analyzed so as to identify the capital structure model & the overall profitability drivers.
Sales & marketing strategies
The sales and marketing strategies adopted by the competition were analyzed and that enabled Relevante’s professionals to provide the client with a strategic marketing framework that was currently being followed by the industry leaders in the segment.
Technology requirements of the industry
Since the factoring industry is a highly knowledge based and service oriented business, Relevante’s professionals suggested a technological solution that took into account risk management, pricing, market intelligence, structured deals and legal and operational complexities.
Laws & regulations affecting the industry
Since the factoring industry in North America is unregulated, with the exception of those factors that are bank-owned and who report to the United States Federal Reserve Bank, the provisions of the Uniform Commercial Code Article 9 which have a bearing on the factoring industry were analyzed in detail and their implications were highlighted in the overview document to the client.
Key manpower requirements of the industry
Human Resources in the factoring industry includes people who understand the businesses of their clients very well in order to be able to provide best in class services in a competitive financial services industry. Therefore key management and operational personnel that satisfied the above criteria were identified. Relevante’s professionals also assisted the client with the staffing requirements that were needed to kick start operations and move forward effectively.
