"While RubikSoft can count on a bustling business scenario, it could face trouble from a global budget that threatens to get out of hand" Anant Koppar, President & CEO, Kshema Technologies

For a company like Rubiksoft, which already basks in a fair amount of brand recognition, going all out with its own sales pitch and leveraging the cost savings that it is able to show (not only on installations but also on transaction costs), would be the right course of action. In the situation that the company finds itself, attractive costs are most certainly the deal-clincher. RubikSoft has a leading-edge brand, RubikIntegra, to support its claim. It would be right for RubikSoft to pull off a few installations itself, like the managers suggest, and draw vendors through the ensuing success for greater market penetration. American markets are high-risk, high-return environments. Bold, daring moves will pay off.

Electronic banking is a 'happening' industry in the US and consumers there are now spending more money buying personal computers than they are on buying television sets. As pc penetration goes up, banks and financial institutions need to devise ground-breaking service strategies, and this in turn creates huge opportunities in technology. The flurry of deals among banks, software companies, online services, credit card companies and financial institutions serves to underscore this process. All banks are going to have to make some critical choices about the electronic future. One of the choices would be to partner with software companies to create specialised and integrated packages for a competitive edge. In a scenario such as this, there is always a demand for the most flexible integrated banking packages. Therefore, RubikSoft is favourably positioned.

Let's do a quick SWOT on RubikSoft. Consider first, the company's strengths. RubikSoft is a risk-taking organisation that believes in packages rather than services, has a rare combination of banking expertise and tech prowess, has a brand positioned on flexibility, delivers low transaction costs, has a set of satisfied international clients, and is acutely conscious of competition. Among the company's weaknesses are a small budget and its lack of exposure to the US market.

While the company can count a bustling business scenario and the high-return markets it is geared to, as opportunities, it could potentially face trouble from a global budget that threatens to get out of hand, being at the mercy of US vendors, and failing to convince big banks to give up their existing cosy relationships with global software companies for a relative outsider.

RubikSoft would be better off making its own pitch. For which it must out-think its competition with a cost-driven strategy and guerilla marketing tactics.

"RubikSoft needs to develop the right equity in the market, and being a new player, it would be foolhardy to adopt a loner strategy for the North American market" Makarand Padalkar, Chief of Staff and Head (Product Marketing), i-flex Solutions

According to marketing guru Philip Kotler, it is more important to do what is strategically right than what is immediately profitable. The financial services industry in the US essentially faces three key challenges-integrating various channels, cutting operating costs and increasing profitability. Any new entrant in the market needs to help financial institutions address these key challenges by deploying the appropriate technology.

A technology provider like RubikSoft needs to develop the right equity in the market, and being a new player, it would be foolhardy to adopt a loner strategy for the North American market.

Therefore the first strategic step would be to forge and or extend technology and consulting partnerships with global leaders in the North American market, thereby enabling RubikSoft to develop a credibility that is much needed in the technologically conservative Banking and Financial Services Industry. After all, the old saying in the business still holds strong: "Nobody ever got fired for buying IBM." Simultaneously, RubikSoft needs to work with partners who understand the needs of the American market better, and who can complete the life cycle of engagement with the client, right from selling to implementation and support. In a mature market like North America, Industry Influencers or Research and Analyst firms play a major role in influencing the technology decision-making of banks and FIs. Therefore, a strong influencer strategy is crucial. Pivotal influencers must be identified on priority and convinced about the offerings of RubikSoft, its financial stability, successful global implementation and value proposition.

Thirdly, RubikSoft needs to stress on getting local technical architects on board who can position its flagship product RubikIntegra adequately and evaluate it for fitment to each market segment in North America.

A mission critical product like RubikSoft also needs to allay customers and potential customer's fears by having a strong local support capability (if not a local near shore kind of a development centre), so that customers are fully assured of round-the-clock capabilities.

Finally, winning customers depends on how best RubikSoft can position itself as a truly global company with a strong base in America-and with local talent, robust infrastructure and strong processes. It's also imperative that the product is sufficiently showcased at all the local exhibitions and seminars, thus subtly providing the almost local touch.

RubikSoft must also break the outsourcing obsession that exists in the US, and sell its products as being the appropriate technology to help Banks reduce costs, mitigate risk, and increase customer satisfaction. The real challenge for an ambitious non-commodity player is to compete on brand competency rather than cost.

"RubikSoft should align itself with boutique risk management consultancies or leading academics at US universities who can provide the credibility that RubikSoft so badly needs" Girish G. Vaidya, Sr. Vice President and Head, Banking Business Unit, Infosys Technologies

In order to arrive at a solution for the problem at hand for RubikSoft, let us first do a quick SWOT analysis for the company's product offering RubikIntegra. One of the strengths of RubikSoft is that it has a low-cost base. This will allow at least a little leverage for the company as it enters the US market. The other strength the company has is its installed base, which spans not only developing markets but also developed markets like Europe. Some of these customers in Europe could provide good reference inputs to US banks.

One of the weaknesses that the company faces is the lack of reference sites in the US. Another drawback that confronts the company could be higher entry barriers because of its origin in India. India has been known for its services capabilities and hence a product which requires in-depth domain knowledge may be seen as a weak offering by the US banks.

One of the threats that the company faces is that the product game being a long-term sales cycle business, the company may need to invest big money for a long period, before being able to see any returns. This could seriously affect the profitability of the company and hence erode the support of the Board. Thus, the key challenge confronting the company is that of "opening the doors" in the competitive US market.

In the Case Game, Vijay Dhar has rightly identified Basel II as an opportunity that RubikSoft can use to make its entry into the US market. While the strategy of going with big vendors like ICM may enable it to acquire some customers, the fact remains that motivating such big vendors to take active interest in their solution will be a steep challenge in itself. Additionally, such big vendors typically 'control' customers-thus defeating the purpose of RubikSoft trying to establish reference clients for its own sales efforts later on.

Keeping all these factors in mind, RubikSoft should look at a novel way of entering the US market. It should align itself with 'boutique' risk management consultancies or leading academics at US universities who can provide the credibility that RubikSoft so badly needs. As part of the entry strategy, RubikSoft should identify such individuals or consultancies, tie up with them to offer a joint solution to US banks in which such an alliance would provide the brand with credibility and reach in the US banking market.

The value proposition to the customer would be that the alliance partner provides Basel II related consulting, and RubikSoft provides the software which is flexible enough to incorporate Basel II principles as and when they crystallise. Clearly, this is a positioning strategy in which RubikSoft will use the established credibility of the alliance partner to open doors using the Basel II 'pain point', while selling its existing product.

As part of the entry strategy, the company should identify and target specific customers for pilot installations which can then be used as reference sites for the rest of the market. While targeting these specific customers, the prospect should be told about the various benefits that banks in Europe (which is comparable to US) have derived by using RubikSoft's software. This will make the pitch much more effective.

This strategy has the advantages of addressing both the issues of retaining customer control, while at the same time, providing credibility to potential customers in the US market.