Fundamo Case Analysis

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A better business model often will beat a better idea or technology”---- Says Aletha Ling, COO, Fundamo. The year 2000, the founder Hannes had an inkling of the problems and solutions. Based on past experience, he also understood a better business model often will beat a better idea or technology. Regularly he had brainstorming sessions with the founding team. The company’s strategy was (a) To think in the present, even though the cogent vision was to become world’s No.1 mobile payment solution provider, and executed a lean structure with a “getting things done” attitude, (b) To use a customer-centric approach and hone in on early adopters, (c) To find out the specific issues on the early adopters and narrowed down the distinguishing characteristics …show more content…
The company provides value through a single access to the existing payment infrastructure and a transaction platform capable of supporting all kinds of payment methods. As a pioneer, the company’s software solution platform has been original and unique in thinking as well as in delivery. It is that authenticity attracted and retains clients as partners who believe in Fundamo’s unique value proposition (UVP). The UVP configuration is as follows (see Table 1):
Table 1: Value Elements Value offered.
Trust Secure Payment, Control over transactions, Guaranteed Delivery.
Ease of use Mobile phone as an access device, No changes needed in Point of Sale (POS).
Cost Not different from normal transactions, cheap electronic POS.
Reach Increasing number of retailers in different countries.

Discussion on Value Elements:
a. Trust---Fundamo leadership team was aware that “trust" is of crucial importance. Therefore formed alliances with MNOs, FIs, and SOEs so that end users deal with their trusted FIs, MNOs and SOEs. The company profited from the generally trusted laws and codes of conduct of FIs/MNOs/SOEs and the relationship already existed between the end users
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The intention was to deploy Mobile Money (the MTN brand) in each country that MTN is operational during the next three years. Almost halfway through the deployment, Fundamo was very much on track to meet all of the deployment milestones. This achievement was made possible because of the flexibility of the platform, the standardization of deployment methodology and the in-depth experience that the company had in deploying solutions in many other countries. The value proposition of mobile payments in mature markets was not clear to Fundamo from the beginning. While it was interesting to offer these types of solutions in first world countries, Fundamo did not pursue the 1st world countries because the company did not foresee a sustainable business model. Experience has taught the Founder Hannes and the leadership team that it is folly to build a business on an assumption that is not sustainable [1,

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