The case traces the journey of Mahindra & Mahindra Financial Services Ltd (Mahindra Finance), a pioneer and leader in catering to the financing needs of rural and semi-urban India – typically underserved, low income, agriculture-based customers. From 2006 to 2015 the company achieved a top line compounded annual growth rate of 26% by systematically creating new markets through new business verticals – vehicle finance, insurance, home loans and SME finance. Over two decades the company had diligently built a business model that hinged on customer centricity and trust and embodied its RISE philosophy for the rural sector. The case is set in 2015, when Mahindra Finance, along with its sister company Tech Mahindra, received government approval to open a payment bank in the country. This presented unprecedented opportunities while raising strategic choices for the company. Should Mahindra Finance stick to its core market – rural and semi-urban – or should it embark on a strategy that includes urban markets? A two-part version of this case is available as Mahindra Finance (A): Creating New Markets (IMD-7-1701) and Mahindra Finance (B): Creating New Markets (IMD-7-1702).
Creating new uncontested markets instead of developing new businesses
Building a scalable and repeatable business model
Integrating alternative thinking – to pivot and proceed
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