Cash Connection

Payday Loans
Strategy, Ethics and Forces

1. What is Cash Connections strategy? * Differentiate itself from competitors to gain the largest piece of the $40 billion dollars of paid lending that the United States industry has to offer, while adhering to government restrictions and meeting customer’s needs.
Reference: Thompson, Peteraf, Gamble, and Strickland. P. (2010). Crafting and Executing Strategy: The Quest For Competitive Advantage Concepts and Cases (18th ed.). Page, C-114.

Which of the five generic strategies discussed in Chapter 5 most closely fits the competitive approach that Cash Connections is taking? * I choose a broad differentiation strategy as a best fit. Allen Franks seeks to produce …show more content…
Consumers used to be limited to options like payday loans or other existing credits. But since now banks are offering new similar products at lower interest rates (Wells Fargo`s check advance products) to consumers, it looks like substitutes are EXTREMELY HIGH and that payday loan companies will need to change their strategies in order to be able to compete.

Reference: http://blogs.wsj.com/economics/2010/09/14/report-blames-big-banks-for-payday-loan-growth/ (click link to a new study)

Reference: http://www.thewester.com/2011/03/ * Reference: https://www.wellsfargo.com/help/faqs/dda_faqs

Credit Card Statistics:
It is estimated that, on average, 20% of Americans have "maxed out" their credit cards.
About 25% of adults in the United States have a history of credit problems.
Americans' average credit card debt is approaching $10,000 per household.
Over 8 BILLION pre-approved credit card offers were mailed to American Consumers last year.

Approximately 65% of consumers carry a balance on one or more credit cards. 23% have maxed out one or more cards. 40% have missed at least one payment in the last 3 months. Fully 33% can no longer make the minimum payments required on their credit cards.
Total unsecured debt for consumers now approaches ONE TRILLION dollars in the United States as of the end of 2007.
The most recent Federal Reserve study showed that 43% of U.S. families spent more than