What concept/theory can be applied to this case study with explanation?

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NetSpend Credit Cards

Brothers (Roy) and (Bertrand Suzette) immigrated from Mexico to the United States of America. When they arrived in the United States in 1986, they soon discovered that they needed a bank account and a credit card, but it was difficult for new immigrants to obtain credit cards. This is where they realized there was a huge untapped market waiting for someone to tap into it. So, the brothers founded a company called NetSpend, aimed at providing traditional financial services to new immigrants and people with modest credit histories. Using prepaid phone cards as their model, Roy and Bertrand copied and modified this model to innovated a business plan specifically for prepaid debt cards.

The brothers then discovered the Small Business Administration (SBA) Small Business Investment Company (SBIC) program, which guaranteed investments made by investors in small businesses through the program. With such guaranteed investment, bold capital investors associated with the SBIC program were encouraged to invest in small businesses that perhaps they would otherwise be reluctant to invest in, making NetSpend’s initial capital come from the SBIC program-linked investors. This equipped the venture with bold capital investors, taking it from a stage where they did not own anything to their first product in selling prepaid credit cards targeted at the unbanked consumers who wanted traditional payment options or other purchase options without cash or checks.

The company grew to become an industry leader in prepaid credit, selling over $26,000 worth of cards through 7-Eleven stores in its first year of operation. NetSpend expanded its offerings to include general retailers, check cashers, and became servicing over 400,000 active cardholders, and entered into a number of acquisition deals.

By mid-2018, NetSpend had around 500 employees and $351.1 million in annual revenue. The company’s board approved being acquired by a other company for approximately $1.4 billion in cash in 2018.

Questions:

1. What concept/theory can be applied to this case study with explanation?

2. What innovation did the Suzette brothers come up with, and how can the steps of creativity be applied to this venture?

3. Does the company have any intellectual property rights? What are they? And how can the company protect them?

4. Do you support the acquisition offer presented to it in 2018? Why or why not?

5. Do you think any of the brothers had traits of creativity? What are they? Comment on that.

Answers;

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