2013PGPM004 Course: Growth Strategies for Developed and Emerging Economies
Assignment: NICT at a Crossroads
1) Do you think NICT should take up PBI Offer?
Advantages and disadvantages of PBI Offer:
Nice fit in current NICT Business Model Sustainable social intervention, regular employment and security for CSC VLE Fixed source of income. Assured Future Cash Flows. Excellent Relationship formation with one of the largest banks in India Will achieve economies of scale Will emerge pan India. National Brand Monopoly over technology in rural areas.
Status quo situation with stabilized system Strengthen relationship & ties with existing collaborators May aid in bringing new collaborators May have a chance with PBI in the future
May breed complacency and corruption among the ranks PBI has more bargaining power hence may misuse it PBI workload may constrain NICTs capability to offer diverse service portfolio PBI may enforce its own processes and software on NICT No guarantee of success of PBI
PBI might create substitute mechanisms to enter the market Or, bypass NICT and directly engage VLEs to setup standardized compatible networks encouraging them to sever ties with NICT SBI, BoI might consider opportunistic collaborations with other vendors setup by PBI
ACCEPTING THE PROPOSAL REJECTING THE PROPOSAL ADVANTAGES DISADVANTAGES
Based on these factors, NICT should accept the PBI offer.
2) What are ramifications with respect to SBI & BOI if it takes up PBI Offer? Ramifications that SBI and BOI may face if NICT accepts the PBI offer: With PBI already vast network in rural coupled with NICT technology will help PBI to reach rural crowd quicker and faster. This can affect SBI rural customer segment. PBI is launched under NREGA scheme. This will ensure wider customers base and more customer loyalty. It may happen that NICT may have to increase its CSC VLE to ensure proper resource allocation to SBI or BOI. SBI or BOI may look for other channels apart from NICT to reach to target customers.
Competencies and Capabilities based Scale Economy Business facilitators for Banks, insurance companies Current association with BOI, SBI, LIC, TATA AIG Content and Process of Building Core Competencies Common Service Centres (CSCs) VLE- Village Level Entrepreneurs Scope Economy based Diversification Strategies The scope economy for NICT if they accept PBI proposal would be it will get chance to serve schemes like NREGA and reach 22 million population. Serendipity Vs Planning Based Success Careful planned execution will help VLEs and NICT to increase their profit share. NICT will have monopoly. PBI will be able to reach maximum consumer through NICT vast existing network. This in turn will benefit the rural population. Core Analytical Framework Accepting the offer means scale economy More reach to the rural population which echoes with their core value of Techno-Socio-Economic organisation