BASKET OPTIONTM: BEYOND INVESTMENTS

SUBMITTED BY GROUP 6 1) 2) 3) 4) BHARADWAJ D RYAKA SURYATEJA NAGULA PREETI ADMANE AYUSHEE NIGAM 1201014 1201047 1201037 1201073

INTRODUCTION: Basket Option is a financial service startup from Bangalore. It is currently operating in the areas of wealth management, loan management, claims management and stock market trading. Their culture is engaged minds where they believe that no fixed targets should be there and the ownership of the success should go to the originator of idea. Their strength lies in good executions and is known for its best pricing for consulting services even though it is a small firm. They also have strong networking skills, with the assistance of Jain groups. The guiding principle which they follow is heavy focus on customers with the provision of financial services which are customer oriented and unique. They are targeting for providing services with zero complaints. GROWTH STRATEGY: Basket Option looks for higher industry growth in the sector which it wants to enter. They majorly target financial sector vertical. They focused on the pain point of the customer or the financial industry players and attempt to come up with a solution that can relieve it. Most of the ideas emerged from Abduls personal experience and practical problems faced by his friends which helped him to come up with innovative existing solutions targeting the problems already faced. Basket Option believes in speed and not in being big. In about 6-7 years they have grown with tremendous speed. From March 2010 to March 2011 their total asset jumped 111.041 % (Exhibit 1). Due to the innovativeness of the services offered they have gathered so much trust in economy that they were able to mobilize such huge funds. In about just 6-7 years they diversified so rapidly that even their competitors cannot. Stock Market Institute which was opened just 14 months earlier proved record breaking as it formed 66% (Exhibit 2) of the total revenue of Basket Option. BUSINESS MODEL - CUSTOMER, COST AND RESOURCE ANALYSIS: Basket Option targets at executing the customer pain points by delivering financial and similar services. They do not target customers who know and are able to take out time. The value proposition they offer is the ease at which the customers can get some of the complex or tedious financial works done at best price possible. Also, innovative product designs like Student Insurance make Basket Option stand a level ahead compared to other competitors. Given the picture of rural population, most of them are in need of such services offered by Basket Option which will help them generate revenues. Most of the services are linked to finance related which is the area where the employees and the founder are

knowledgeable. Also most of the services offered are consulting based. Basket Option acts as a point of contact or a facilitator in most of the services.

Integration of Markets, Platforms and Competencies

Bangalore

Mysore

Sakleshpur

Corporate and retail insurance

Training in Stock Markets

Wealth Management for NRIs and HNIs

Smart kiosks for Financial products

Loans

Claims Management

Equity Trading and Commodity Trading

Market Insights: --Inability of customers to understand few complex financial products and their use --Latent demand for innovative insurance (Student Insurance) --Need for external management of customers wealth --Need for ease of application process for loans, IT filings, PAN, Passport, RTI, Pension, PPF etc

Domain Expertise: --Stock Market Expertise with real life lessons --Financial Products and related software expertise --Insurance products expertise --Loans issuance expertise

Resources utilization and performance: --Concept of Entrepreneurs and Intrapreneurs

The costs involved in infrastructure, operations and transportation are less. Hence, much of cost goes for administration costs. The initial capital has been provided by JGI ventures, and subsequently the company became profitable due to its operations. The company has been exploring many a verticals which are related and can be established with the present resources and talents. But since the offerings do not include any R&D, they are quite vulnerable to get copied. And, there are significant competitors in many verticals also.

The company has to keep its innovation wheel running all the time and come up with many new services to keep it growing. Their business model comes under 1st type i.e., Enhancements, Hybrids and Derivatives. They dont follow any framework for service/product development such as a stage-gate model. The employees and intrapreneurs having a sound idea of a new vertical would take up and develop mostly on their own frameworks. Thus they may need for reorganization of company hierarchy and policies as they grow at a later stage. Also the company generates ideas mostly from the experience of its founder and lead users to come up with solutions. Upon analysing the buyer utility map, the gaps which are existing are, when a customer buys, uses and maintains a financial or related products, there is a need for convenience and simplicity which when met increases the productivity or profitability of a customer. Bases on the above discussion we have provided possible recommendations below. RECOMMENDATIONS: 1. Income Tax Filing Services: The main core competency of Basket Options is providing financial services which are perceived difficult by customers at reasonable prices. The Income tax filing is considered to be difficult and tedious task, many working professionals are unable to file IT returns properly due to lack of time and the documentation to be done is quiet large. Hence it is very ideal for Basket Option to start a service for helping individuals file their IT returns. Since they already have many clients from various other verticals, these clients can be offered these solutions. Also Basket Option can provide services to small scale vendors, suppliers and single owner business for their requirement of financial services & Tax filing services. 2. Provident Fund: While getting the clearance for the provident fund, people find it too troubling to file it and get their money back. Since it is pain point for huge population group, so Basket Option can act as a mediator and process the application for people which will reduce paper work for the government organizations and ease out the process for getting money back for the general public. 3. Pension Funds: People after serving the organization have to wait for getting funds which belong to them. Basket Option can handle the request independently by servicing the request, easing out the operation and reducing the work of the government organization. 4. Camp Arrangements for RTO, PAN and Passport provision: Taxation, Accounting and Payroll processing can be time consuming for a company and company incurs more fixed cost to compensate the team. Basket Option can provide for outsourcing by setting up the camps at several places and smoothing the process, so that it is time saving for the applicants without any queues to stand, postponing important work or getting work delayed due to late processing of these requests. 5. Reward Points: The Company can offer reward points to its customers for using its services again and again. This helps the company to make the customer repeat purchase hence there is a constant source of revenue. The points can be used in various other

services which are being offered by the company. Also Basket Option can tie up with PAYBACK Loyalty Points Company to offer the reward points to its customers. The company should constantly explore for customer pain points in various other financial and related services and based on these pain points should design potential new service offerings. The company shall work extensively on improving their New Product Development organization structure to reap more revenues. They should try and maintain their differentiation aspects and differentiation requires choice of right customers. So it is very much essential never to incentivize sales to the wrong customers. The whole value is lost if right customers turn into wrong ones.