Mr. Rao, with innumerable years of banking experience, approached People's Group Dubai, a venture capitalist company, seeking financing for a micro-remittance-cum-foreign exchange service operation in Hong Kong. Mr. Rao claimed that demand for currency exchange services in Hong Kong would continue to grow because of the large number of tourists who visited Hong Kong on their China tour. He also asserted that a captive market of domestic workers who remitted their wages to their home countries would supply continuous demand for remittance services. Mr. Rao was confident that he could begin fast with a small office staffed by a few tellers and one manager in a busy location of Hong Kong, and then expand operations to other places.
Yet, funding to cover fixed assets and working capital would be asked to start additional outlets. An important enabler of the planned strategy was the telecommunication network of Western Union, which had established a presence in a number of parts of the globe as a trustworthy provider of remittance services. Mr. Rao also intended to gain from the technology support and expertise of the IT arm of People's Group based in Bangalore, India. Entrepreneurial notions that were realistic were welcomed by people's Group Dubai if they were backed by clear strategies for business growth and promised an acceptable rate of return on investment (ROI). With rivalry and low cost micro-remittance services offered by pure Internet players, there were questions about the adequacy of technology support from the Bangalore arm in directing Mr. Rao's proposed venture to success and generating sufficient ROI in the short and long run. People's Group managers debated the utility of the proposed enterprise.
PUBLICATION DATE: August 26, 2014 PRODUCT #: HEC047-HCB-ENG
This is just an excerpt. This case is about TECHNOLOGY & OPERATIONS
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