WU has re-invented itself once more. This time over the past 20 years the corporation serves as a bank for people without bank accounts by transferring money around the world at the tune of $20 billion/year. WU has grown exponentially over the last few years, especially internationally. The bulk of the transfers consist of small amounts earned by immigrant workers in wealthy countries sent home to assist families in poor countries.
As WU expands into the Middle East, India and China, revenue is growing at a 20% annually. Yet it is estimated that WU has only penetrated 15-20% of the $150 billion global money-transfer market.
Today, 75% of WU agents are outside the US, including more than 25,000 locations in India and China and over 2,000 new agents in the Middle East, mostly from Pakistan, a source of many millions of migrant workers.
In 2003 WU set up operations with a state-controlled Syrian bank. The agent in Jordan and Palestinian Territories is Arab Bank. The best way to add capacity is to simply authorize additional agents and affiliates.
What strategy would you pursue to achieve corporate goals?
What strategy would you pursue to achieve corporate goals? If we assume that the corporate strategy is to penetrate the 80-85% market that Western Union has not touched, we need to reexamine the current strategies of Western Union. Currently, the thinking is that the more agents Western Union has, the greater the market it will be able to penetrate. This is erroneous. This strategy only addresses the distribution aspect of the money transfer business. The product, price and promotion need to be looked into.
New entrants into the money transfer business are winning because of several reasons. In disruptive circumstances, entrants win because they are often unknowingly-taking advantage of the asymmetries on their side. Western Union's strengths are its weaknesses. Its values, which make sure it delivers excellent products to demanding customers, stop it from going after markets where ultimately its strongest competitors will forge their processes and values. The Western Union's processes, those that allow it to serve its customers well, are weaknesses when the game changes and new capabilities are necessary. Fleeing from the disruptive attacker feels good in the short term but further deprives the Western Union of the necessary skills to compete. ...
Here is just a sample of what you will find in the solution:
"Western Union's strengths are its weaknesses. Its values, which make sure it delivers excellent products to demanding customers, stop it from going after..."