Situation

One of the leading privately owned banks in Brazil had amassed more than 70 percent of the small-business market, but competitors were nipping at its heels and its position had begun to slip. Executives knew that for long-term success, they had to both protect their existing clients and increase their share of wallet. To do this, the bank engaged Kearney to help it design and implement a new business model to capture more of this potentially lucrative market.

Approach

Maintaining its leadership position clearly hinged on the bank’s gaining a better understanding of the small-business market. Our project team began with a segment analysis of the Brazilian banking market, including key characteristics and trends. We also benchmarked our client against its main competitors, focusing in particular on the retail service delivery model.

The insights gained from this groundwork suggested several strategic alternatives, each with a different market position, business model, and customer offering. We used financial modeling to conduct feasibility studies and met with the client to review them in detail and determine the best approach.

Finally, we delivered a business plan for the selected approach, and an implementation roadmap that included a responsibility matrix, organizational structure, pilot and rollout plans, training, technology requirements, distribution channels, product specifications, and marketing strategies.

Impact and advantage

We worked with the client to implement the new model and roadmap over the course of a year. Positive results started to appear after the first four months. The bank ultimately reaffirmed its leadership position in the small-business market and met its revenue and targets within the range of projected results:

Revenue growth of 15 to 20 percent on average per year (for five years)
Profit growth of 22 to 28 percent on average per year (for five years)
Net present value of $5 billion to $6 billion (for a period of five years)

Following this successful start, the executives now feel confident that the bank has a stronger grasp on the small-business sector and is in a far better position to meet customer needs.