2000wordsIn this Business Report you will work independently. Your task is to analyse how the same company could secure a sustainable competitive advantage with respect to ONE of its products or services.In this respect it is important that you use Porter’s five forces frame work toe valuate: a)the positioning of the company within its sector;and b)the potential for achieving a competitive advantage in this product or service; and c)the path to self-sustaining growth of the company in the in the foreseeable future, when the company follows your business plan for the development of this product or service. You should conclude by summarising the feasibility of long-term growth and the potential profitability of the company over a three-year horizon.useful links: https://hbr.org/2016/06/the-rise-of-fintech-in-supply-chainshttps://books.google.pl/books?id=QGPcDwAAQBAJ&pg=PA75&lpg=PA75&dq=Suppliers+fintech&source=bl&ots=kQq6r03Dto&sig=ACfU3U2BIm8sZopz6HdEinAjdxuVb9dGAw&hl=en&sa=X&ved=2ahUKEwiKiq2Dp_roAhUSsHEKHfK5BpMQ6AEwD3oECAkQAQ#v=onepage&q=Suppliers%20fintech&f=falsehttps://books.google.pl/books?id=0_VeDwAAQBAJ&pg=PA328&lpg=PA328&dq=Suppliers+fintech&source=bl&ots=w7MpuMbi5i&sig=ACfU3U2w6dKeMbLteWLMvFwNljGsV10OXQ&hl=en&sa=X&ved=2ahUKEwiIlbnBp_roAhUQzoUKHd5cCts4ChDoATACegQIBRAB#v=onepage&q=Suppliers%20fintech&f=falsehttps://books.google.pl/books?id=u0eHDwAAQBAJ&pg=PT248&dq=Monzo+suppliers&hl=en&sa=X&ved=0ahUKEwjr-aiDqProAhXL_CoKHagqBysQ6AEIKzAA#v=onepage&q=Monzo%20suppliers&f=false


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Malgorzata Sulimierska
Introduction to FinTech (N1624)
The Business Report
In the first part of this module you were assessed, via a group presentation, on examining a
FinTech company of your choice, focussing in the improvements that are possible with the
aid of new technologies.
In this Business Report you will work independently. Your task is to analyse how the same
company could secure a sustainable competitive advantage with respect to ONE of its
products or services. In this respect it is important that you use Porter’s five forces framework
to evaluate:
a) the positioning of the company within its sector; and
b) the potential for achieving a competitive advantage in this product or service; and
c) the path to self-sustaining growth of the company in the in the foreseeable future,
when the company follows your business plan for the development of this product or
You should conclude by summarising the feasibility of long-term growth and the potential
profitability of the company over a three-year horizon.
1. Aims and Objectives
with respect to your selected product or service (from henceforth, the “business’) you should
aim to: define potential barriers to entry in the business; anticipate any future disturbances
for this business; and investigate potential competition through the perspectives of both
demand and supply pressures.
The main objective is to understand the nature of the selected business and evaluate the
potential for the company to change using Porter’s five-forces framework.
2. Requirements
Product/Service (i.e. Business) Selection
First, meet as a group to select ONE of the company’s products or services for further
analysis. You need to differentiate the business you select. Independent work is very
important. We will be checking for no overlap within your group as part of the marking
You have until 21th March to submit 100-200 words describing your business
selection to the canvas site. Dr. Sulimierska will then ensure there is no overlap with
other members of your group. After she has signed this off, you are NOT allowed to
change your selection. Please consult Sussex Direct for all information regarding the
deadline and mode of submission.
The report should be 1800 — 2200 words (excluding references). Marks will be
awarded for clear, coherent and well-structured arguments with proper referencing
Malgorzata Sulimierska
in Harvard style. Links to websites should be in footnotes. More information regarding
references and style can be found here
– Extra marks are rewarded to students who participate activity during seminars between
weeks 5-10, this will be an additional 5% reward (the total mark for project is 100%)
Transferrable Skills
This business report aims to help you to work independently, as you develop a
business-oriented mindset. We hope that this enhances your preparedness to work in
your chosen FinTech sector.
3. Content and Structure
1. Introduction
Brief overview of the company, and the structure and growth of the industry sector
(200 words)
2. Porter’s Five Force framework
You will analyse the competition and the impact on profitability for this company (if it
develops the business that you have selected) within Porter’s Five-Forces framework. There
are five competitive forces: buyers, suppliers, substitutes products or services, new entrants
and existing rivals, as follows:

Consumer Power: This force refers to the relative strength customers have to reduce
prices, demand more service and move between competitors. The number of customers
a firm has, the availability of substitutable products and the cost customers face to switch
to a competitor all influence the significance customers have over business profitability.
Typically, the smaller the client base, the more power they hold. It is important to answer
the following question: is there any consumer impact and how large is it?
(300 words)

Suppliers Power: This force addresses the relative influence suppliers hold over
participants in the business. In the case of FinTech, suppliers can be thought of as the
providers of funds. Suppliers can exert bargaining power by raising the cost of funding or
reducing the stability of funds. The fewer the number of suppliers to a business and the
greater the business’s dependence upon them, the more power a supplier holds over
profitability. It is important to answer the following questions: how many suppliers are
there and how can they affect the prices of the selected product or service?
(300 words)
– Threat to substitutions: This threat signifies the ease with which customers can
substitute one company’s business for the same business for another company. The more
attractive the price-performance trade-off is of a substitutable product or service, the
more significant the threat to the company’s profit potential. It is important to answer the
following question: how easy is it to substitute the product or service?
(300 words)
Malgorzata Sulimierska
– Threats of new entry: This threat represents the ease with which new entrants enter the
market. Its strength is dependent upon the barriers to entry and incumbents’ responses. If
barriers to entry are high or if new entrants expect a strong response from incumbents, then
newcomers will not pose a serious threat. The most significant barriers to entry are
economies of scale, cost advantages and capital requirements. It is important to answer the
following questions: what are the barriers to entry and how difficult is it to overcome these
(300 words)
– Existing Rivals: This force denotes the intensity of competition among incumbents in the
FinTech sector. The strength of rivalry is dependent upon several factors, including the
number of competitors, industry growth prospects, the similarity of products or services
offered, capital intensity and exit barriers. It is important to consider the position of your
selected business compared to its competitors and to identify their strength and weakness.
(300 words)
3. Further Implications and Summary
Each of the competitive forces can help reveal the root causes of an industry’s future
profitability and competition. This framework will allow student to see if this Fintech firm
can disrupt the sector and if it can be self-sustaining into the foreseeable future. Students
should be able to highlight the critical strengths and weaknesses of the entire sector, as
well as the particular company.
The relative strength of these forces can be influenced by several external factors, such as
government policy, regulation, monetary policy acquisition activity and consolidation.
This way you should consider how policymakers can affect the Fintech sector for both
incumbents and entrants.
Analyse the limitations of Porter’s five force framework. As there are also additional
models to help understand the fintech business and its potential such as, value chain
analysis and BCG matrix.
(300 words)
4. Assessment Criteria
Assessment Criteria
The introduction must briefly explain the activities of the company,
product/services and selection. Especially, explain well, the product/service
that you have decided to use for this analysis, an overview of the industry and
its structure
Correctly identify the competitors by dividing them into direct and indirect.
Explain clearly the method of identifying these competitors. Provide a proper
description your research on the competitors’ sales tactics and compare its
Malgorzata Sulimierska
competition’s content strategy. Analyse the level of engagement on your
competitor’s content and their market share
Competitive Rivalry and threats of new entry.
It is also important to analyse the number of strength of the competitors with
respect to the quality of their products and services in comparison to your
To define your company’s position and how it can be affected by another
firms’ ability to enter your market. How easy is it to get a foothold in your
industry or market? How much would it cost, and how strongly is your sector
Supplier Power.
Determine how easy it is for suppliers to increase their prices and how many
potential suppliers are there? Is it possible to substitute a supplier’s product
or how unique is the product or service that they provide, is it expensive?
Would it be easy to replace them?
Consumer Power
Explaining how easy it would be for buyers to drive your prices down. What
market share does your company operate with and how many buyers are
How much would it cost for them to switch from your product/service to
those of your rival? Are your buyers strong enough to dictate the terms of the
Threat to substitutions
Illustrating the likelihood of customers finding a different product or service.
Can customer substitute your product/service and how easily can they do it?
A substitution that is easy and cheap to make can weaken your companies
position and threaten its profitability.
Further Implications
Defining the limitations of Porter’s five force framework
If the company self-sustainable is or not
Highlighting what can disturb the finance industry and what are the possible
policy implications
Providing and keeping good arguments with the implementation of data
analysis and sources used.
Keeping to the word limit and the use logical and critical thinking in this
discussion and analysis
Use of correct references and sources
Introduction to
What is FinTech?
Financial Technology popularly referred to as FinTech is
an emerging business model premised on technology and
is aimed at not only rivaling traditional methods of
financing in relation to banking services but also
improving them.
Majority of FinTech innovations in place are run by
established financial institutions and few start-ups
motivated to cause transformation in the industry.
Lufax International is one such institutions that this
presentation focuses on.
Lufax International: Background Information
? A lending and wealth management company
whose operations are based on the internet.
? The firm is under the ownership of Ping An
? It seeks to top the industry of wealth
management globally through provision of
efficient and comprehensive services.
? Founded by Greg Gibb in 2011 to provide online
lending, provide expertise on risk management,
provide information on financial assets trading
and related consultancies.
Lufax Business Journey
? The company started out in small scale
but experienced tremendous growth
within a short period of time.
? It grew its online originations from
151million yuan to 3.3 billion yuan ($24m
to $528m) between 2011 to 2013.
? This represented 2100% growth rate.
? This has repeated over the years hence
placing Lufax ahead of all other P2P
Market Positioning and Share
Position of China in relation to the Global Context in FinTech
Market Positioning and Share
? Lufax is regarded as the
global leader in P2P
internet lending.
? The company currently has
a 22% market share in the
very industry with 43 billion
outstanding loans and
expected yields of 8.4%
Products and services
Primarily, Lufax has two key products from which others are derived
from. These include:
? P2P
investment products
Wealth management products and related consultancies
P2P Investment Products
WenYing-An-e: a P2P loan
which is unsecured and has 13 years of average maturity
WenYing-AnYe: Which is an
investment product in the
form of real-estatemortgaged. The product has a
short average-maturity time
totaling to a minimum of
3months and maximum of 12
Wealth management products and related
FuYing RenSheng: a senior citizens’
investment product that requires
minimum of RMB1000 investment
amount. The product attracts an
annual return on deposit at the rate
of 5.5%. The product has a short
average-maturity time totaling to a
minimum of 3months and maximum of
12 months.
Exclusive Wealth Management: a
product that requires a minimum of
RMB100k investment amount. The
product attracts an annual return on
deposit at the rate of 15% -20%. The
product has a short average-maturity
time totaling to a minimum of 1
month and maximum of 12 months.
Company Profit Model
The company’s profit model involves
the following:
Matching investors with borrowers
then charging 4% percent fee.
The company also has other
investment products such as the
FuYing RenSheng from which it
creates a pool of capital and reinvests
Lufax also generates profits from
direct loans they issue. As of end of
2018, there were $43billion worth of
loans outstanding from which the
company expected 8.4% revenues
SWOT Analysis
What does SWOT analysis tell show about Lufax and FinTech in general?
Internal Factors
External Factors
SWOT Analysis
At Company Level
? Uses co-created
solutions to solve
pain points in the
? Higher interest rates
on customer deposits
than what banks
? Competetive
advantage offered by
the robust
infrastructure that the
company has.
? Low industry entry
? The company is too
dependent on the
Chinese and
Singapore markets
hence making it
susceptible to
uncertainties in the
two countries.
? Lufax has limited
options in the P2P
Lending space
? Close association
with Ping An Groups
helps it benefit from
rich innovation and
? Emerging IT and big
data technologies
help the company to
leverage the most
mechanism for risk
assessment and risk
control systems
? Low cost of switching
from traditional
banking system to
? Government
regulations that make it
difficult to operate P2P
within China and Hong
? Apparent lack of
enforcement on loan
? A lot of duplication in
technologies that
support the business
FinTech as a business model anchored on technology is already with us
and has proven to be popular among the low and middle income
The question that begs; will banks ever join FinTech model of
Lufax while focusing on P2P lending and wealth management over the
night is currently the global FinTech leader.
With a short lifespan that is characterized with high profit making and
rapid growth, Lufax also faces the challenge of government highhandedness through regulations and market uncertainties.
Lufax. (2020). Retrieved 24 April 2020, from


Harvard Business Publishing Education. (2020). Retrieved 24 April 2020, from
Lufax company is a Chinese online market place for financial assets trading that was
founded in September 2011 by Ping An Insurance Company. The company’s products include
peer to peer (P2P) lending services and wealth management products. Ping An Insurance
company chose P2P lending because the services are the backbone of investment banking,
commercial banking and consumer lending services for organizations and individuals. The
company earns by matching investors with borrowers at a 4% fee on each loan.
P2P lending products includes:
“WenYing-An-e” which is a loan that is unsecured and has a maturity of 1 to 3years, a
least investment of RMB10K with an annual rate of return of 7.08%.
“WingYing-AnYe” which is a mortgage freehold product that matures within 3 to 12
months, a least investment of RMB250K and an annual rate of return of 7.5% to 7.8%
(Jin & Liu, 2018).
Jin, J., & Liu, Y. (2018). Brief Analysis on Operating Model and Risks of “P2P Lending” in China. In
2018 4th International Conference on Economics, Social Science, Arts, Education and
Management Engineering.

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