Cash Connection - Ethically Sound
Cash Connection Strategic Analysis Case Study
October 24, 2011
Table of Contents
Cash Connection Strategic Analysis Case Study 3
Cash Connection’s Business Strategy 3
Cash Connection SWOT Analysis 4
Ethical or Unethical Industry 5
Cash Connection’s Porter Fives Assessment 7
Cash Connection Lending Key Success Factors 9
Economic Characteristics and Driving Forces 10
Industry Financials 12
Recommendations 13
Reference 14
Table of Figures
Figure 1: Cash Connection - SWOT analysis 4
Figure 2: Porter’s Five Forces Summary 7
Figure 3: Payday Advance Market…………………………………………………………..8
Figure 4: Reasons Why Households Never Banked or Unbanked 10
Figure 5: Cash Connection – Revenues (2007-2009) 12
Cash Connection Strategic Analysis Case Study
Cash Connection was started by Allen Franks in 1986, when he opened his first check-cashing store in Shreveport, Louisiana. Throughout the mid to late 1990’s Cash Connection services grew as a result of robust consumer demand, traditional banks leaving the short-term credit market, sky-rocketing costs associated with defaults associated with short-term credit and regulatory changes that provided increased customer protection (Thompson, Peteraf, Gamble & Strickland, 2012). Although small loans had been around for decades Cash Connection type services were likened to the billion dollar microcredit loans provided by the Grameen Bank of Bangladesh India.
During 2007, the payday advance industry provided close to $44 billion in short term credit to customers, contributed $2.9 billion in labor income, $6.4 billion in total labor income impact and generated over $2.6 billion in governmental taxes but ethical questions persist (Thompson, et. al, 2012).
Cash Connection’s Business Strategy
Cash Connection’s utilized a focused differentiation strategy to distinguish itself from its competitor’s while adhering to increasing government regulations. Their primary goal was to provide short term
October 24, 2011
Table of Contents
Cash Connection Strategic Analysis Case Study 3
Cash Connection’s Business Strategy 3
Cash Connection SWOT Analysis 4
Ethical or Unethical Industry 5
Cash Connection’s Porter Fives Assessment 7
Cash Connection Lending Key Success Factors 9
Economic Characteristics and Driving Forces 10
Industry Financials 12
Recommendations 13
Reference 14
Table of Figures
Figure 1: Cash Connection - SWOT analysis 4
Figure 2: Porter’s Five Forces Summary 7
Figure 3: Payday Advance Market…………………………………………………………..8
Figure 4: Reasons Why Households Never Banked or Unbanked 10
Figure 5: Cash Connection – Revenues (2007-2009) 12
Cash Connection Strategic Analysis Case Study
Cash Connection was started by Allen Franks in 1986, when he opened his first check-cashing store in Shreveport, Louisiana. Throughout the mid to late 1990’s Cash Connection services grew as a result of robust consumer demand, traditional banks leaving the short-term credit market, sky-rocketing costs associated with defaults associated with short-term credit and regulatory changes that provided increased customer protection (Thompson, Peteraf, Gamble & Strickland, 2012). Although small loans had been around for decades Cash Connection type services were likened to the billion dollar microcredit loans provided by the Grameen Bank of Bangladesh India.
During 2007, the payday advance industry provided close to $44 billion in short term credit to customers, contributed $2.9 billion in labor income, $6.4 billion in total labor income impact and generated over $2.6 billion in governmental taxes but ethical questions persist (Thompson, et. al, 2012).
Cash Connection’s Business Strategy
Cash Connection’s utilized a focused differentiation strategy to distinguish itself from its competitor’s while adhering to increasing government regulations. Their primary goal was to provide short term