CASE STUDY: One promising approach to promoting sustainable development in poor countries is to enable access to finance. However, a large part of the problem is how to transfer money between people. Many in poor countries do not have bank accounts or access to the formal financial systemthey are unbanked. Commercial banks in these countries serve only a small percentage of the population and their outlets are concentrated in urban centers. As a result, people mostly perform transactions in cash. A sustainable development team at Telco heard about this problem from the microfinance organization in Ghana. Telco is a large telecommunications company headquartered in and primarily serving Europe, with some subsidiaries in Africa (including Telco Ghana). The team thought they might be able to develop a solution to help unbanked consumers in Africa. What if consumers could turn their cash into e-money that could be transferred person-to-person via their phone? This would help money become a lot more mobile.

The team at Telco called their idea Project Shiller. The basic idea was as follows. Consumers could deposit their cash at one of Shillers distribution touchpoints, and this balance would show up on their Shiller account as e-money. They could then transfer this e-money to others via their phone. When they wanted to make a withdrawal of cash, they could do so from any Shiller distribution touchpoint. Shiller accounts were not official bank accounts, but they did provide a place to hold money until it could be transferred or withdrawn. The team thought Ghana would be a suitable market to launch the service, with the potential to expand into other African countries. The problem of money mobility was widespread beyond business transactions. About 50% of the population in Ghana lived in cities. Many people worked in cities so that they could send money home to families in rural areas. Sending home a packet of cash was a common occurrence. But again, moving this cash required a long and potentially dangerous journey.

1. Does Shiller have a sustainable competitive advantage, and if so, what does this advantage comprise of? If a commercial bank were to launch a copycat Shiller service in the future, would this pose a competitive threat? Why or why not?