Introduction
A business case study is an in-depth examination of a particular business or organization. It can be used to explore a company's history, current operations, and future plans, as well as its strengths, weaknesses, opportunities, and threats. A case study of a financial services company, such as Cred, would likely focus on its products and services, target market, competitive landscape, and financial performance. It could also examine the company's organizational structure, leadership, and corporate culture. The goal of a case study is to provide a comprehensive understanding of a company, its industry, and its challenges and opportunities.
Business model of cred
Cred is a fintech company that specializes in lending and borrowing of crypto-assets. It uses blockchain technology to facilitate its lending and borrowing services, which allows for a more efficient and transparent process.
The core of Cred's business model is its lending platform, which enables users to borrow cash or stablecoins (cryptocurrencies pegged to the value of traditional fiat currencies) using their crypto-assets as collateral. Cred also offers a lending program where users can earn interest on their crypto-assets by lending them out to other users.
Cred's platform also has a borrowing program where crypto-assets holders can borrow cash or stablecoins, using their crypto-assets as collateral. This way Cred's customers can access cash or stablecoins to use it for their daily expenses or to purchase more crypto assets without selling their current holdings.
In addition to lending and borrowing, Cred also offers other financial services such as credit scoring and lending analytics, and other financial products such as crypto-backed loans.
Cred's revenue is generated through interest and fees charged on the loans and interest earned on the assets lent out. Cred also charges for its other financial services, such as credit scoring and lending analytics.
fig. Cred
Success strategy of cred
The company main strategy is to focus on the behavioural design. It extensively work on altering the behavioural design of the society. This strategy works out in 4 discrete steps
They are:
1.Research
The stronger the foundation, the stronger the house. Research is like the foundation of any startup. That is why Kunal Shah has done perfect research for his company.In that research he find so many issues that users are facing in credit card bill payments. The issues are
i) Hidden charges.
ii) More fees due to not pay ontime.
iii) Extra interest.
2.Design a system to overcome that issues
He build cred app completely transparent with no hidden charges, thereby increasing trust in customers. And the app interface is so simple for example some people have credit cards belonging to two or three banks and for bill payment they have to open and pay each bank separately but cred shows them all at one place.
3.Changed the habit by giving incentives
Approximately cred spends ₹727 to earn ₹1, it leads to 60 crores loss in 2019 and 360 crores loss in 2020. It give massive cashbacks and offers to incentivise the act of on-time payment, some incentives are like flight tickets discounts,1000 cashbacks etc. So, it present incentives in order to get customers to use their product or service and eventually to increase their user base.
As you already understand, we know that Jio has also applied the same strategy and achieved great success. First Jio identify the problem that mobile internet is very difficult for Indian and thought that business can be done by solving that problem. It created infrastructure by spending 1,50,000 crores. It made offers in 2016 in a way that no one could expect. It announced that mobile data free and topup free. It does not think about profits at all. It works with the aim of acquiring users. It took 20 years for Airtel to get 30 crore customers, but Jio got 30 crore customers in just two and a half years. Once we used to use mobile data thinking that we will run out of mobile data but now we don't think about running out of mobile data. Once we used to give missed calls if we don't have talktime, now there is no such system.
And Google pay did the same thing before it came, digital payments i.e. Paytm and phone pay were the most heard names, maximum everyone used them, Google Pay thought to enter at such a time, then the strategy used by Google Pay was in Scratch Cards, but those apps did not give us even a single rupee, but Google Pay used to give us cash back every time we made a payment. That's why many people have started using Google Pay.
4.Marketing
Cred's marketing strategy likely involves a combination of online and offline tactics to reach its target market, which is primarily made up of individuals and businesses that hold or are interested in holding crypto-assets. Some of the specific tactics Cred may use include:
- Cred may create and distribute valuable content such as blog posts, videos, and infographics to educate potential customers about the benefits of lending and borrowing crypto-assets, as well as how to use its platform.
- Cred may use social media platforms such as Twitter, Facebook, and LinkedIn to engage with its target audience and promote its platform and services.
- Cred may partner with influencers in the crypto-asset space to promote its platform and services to their followers.
- Cred may optimize its website for search engines to increase visibility and drive more traffic to its site.
- Cred may use paid advertising such as Google AdWords and Facebook Ads to reach a wider audience and drive more conversions.
- Cred may participate in conferences and events related to the crypto-asset space to network with potential customers and partners and promote its platform and services.
- Cred may incentivize existing customers to refer their friends and family to the platform by offering referral bonuses.
- Cred may build a community of customers and supporters around its platform through initiatives such as meetups, webinars, and social media groups.
- Sending cake to customers for paying bills in ontime.You may think that what is the use of sending cake as a reward? That one cake attracts colleagues and other people around him it results to increases the reach of the company to people even more.
- It giving advtisements by movie stars and cricket stars. These advtisements are presented in a different way and create unique opinion on people.
Overall, Cred's marketing strategy likely focuses on building trust and credibility with its target audience by providing valuable information and resources, as well as promoting its platform and services as a reliable and secure way to lend and borrow crypto-assets.
One interesting story about cred
One interesting story about Cred is their collaboration with the non-profit organization GiveCrypto.org in 2019. Cred partnered with GiveCrypto.org to provide financial aid to people in need in the form of cryptocurrency. The partnership enabled GiveCrypto to use Cred's lending platform to borrow cash and then convert it into cryptocurrency, which they then distributed to recipients in countries such as Venezuela and Zimbabwe. This partnership is interesting because it showcases how Cred's platform can be used for social good and to provide financial assistance to people in countries with unstable economies and lack of access to traditional banking services. This partnership is a great example of how Cred's platform can be used for more than just financial gain and be beneficial for the society.
How cred earn money ?
Cred earns money primarily through interest and fees charged on its lending and borrowing services. Here's a more detailed explanation of how Cred generates revenue:
1.Lending: When users lend out their crypto-assets on Cred's platform, they earn interest on their assets. Cred also earns money by charging a small fee on the interest earned by the lender.
2.Borrowing: When users borrow cash or stablecoins using their crypto-assets as collateral on Cred's platform, they are charged interest on the loan. Cred also earns money by charging a small fee on the interest charged to the borrower.
3.Credit Scoring and Lending Analytics: Cred also offers credit scoring and lending analytics services to its customers. These services help customers to understand their creditworthiness and their borrowing options. Cred charges a fee for these services.
4.Crypto-Backed Loans: Cred also offers crypto-backed loans, where customers can borrow cash or stablecoins using their crypto-assets as collateral. Cred earns money by charging interest on these loans.
5.Liquidity Services: Cred provides liquidity services to other platforms and exchanges, it earns money by charging a small fee for the service.
Overall, Cred generates revenue by charging interest and fees on its lending and borrowing services and its other financial products. It also earns revenue from its credit scoring and lending analytics services and liquidity services.
Innovation is the ability to see change as an opportunity - not a threat" - Anonymous
As an entrepreneur what can we learn from cred business case study?
• Leverage technology:
Cred's use of blockchain technology to facilitate its lending and borrowing services is a key aspect of its success. Entrepreneurs can learn from this to find innovative ways to leverage technology to improve their own products and services.
• Focus on a niche market:
Cred's focus on lending and borrowing crypto-assets is a specific niche market within the larger financial services industry. Entrepreneurs can learn from this to identify and focus on specific niches within their own industry to differentiate themselves from competitors.
• Understand the competitive landscape:
Cred operates in a competitive landscape with other lending and borrowing platforms. Entrepreneurs can learn from this to understand the competitive landscape in their own industry and to identify opportunities to differentiate themselves from competitors.
• Build trust and credibility:
Cred has built trust and credibility with its customers by providing valuable information and resources and promoting its platform as a reliable and secure way to lend and borrow crypto-assets. Entrepreneurs can learn from this to focus on building trust and credibility with their own customers.
• Continuously improve the product:
Cred's platform is continuously updated with new features and services, which is one of the reason it's able to retain its customers. Entrepreneurs can learn from this to continuously improve their own products and services to meet the changing needs of their customers.
• Think outside the box:
Cred's collaboration with GiveCrypto.org is a great example of thinking outside the box, finding ways to use their platform for social good, and creating new revenue streams. Entrepreneurs can learn from this to be open to new ideas and opportunities for growth.
• Build a community:
Cred has built a community of customers and supporters around its platform through initiatives such as meetups, webinars, and social media groups. Entrepreneurs can learn from this to focus on building a community of customers and supporters around their own products and services to increase brand loyalty and advocacy.
Conclusion:
Cred is a fintech company that specializes in lending and borrowing of crypto-assets through its platform that uses blockchain technology. It offers lending, borrowing, credit scoring and lending analytics, and crypto-backed loans. Cred generates revenue by charging interest and fees on its lending and borrowing services, and its other financial products, as well as credit scoring and lending analytics services and liquidity services. Entrepreneurs can learn from Cred's business case study by leveraging technology, focusing on a niche market, understanding the competitive landscape, building trust and credibility, continuously improving their product, thinking outside the box, and building a community of customers and supporters.
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