Consumer Finance Company (CFC): Volume Objective
Companies that are whole-owned subsidiaries are given objectives that are difficult to meet. Many times it can be advantageous to bring in a consulting firm to bring fresh eyes to a problem and generate previously unidentified solutions.
CFC was not growing as fast as the objectives dictated by its parent company required. Field operations and marketing were developing plans to stimulate business but it would not be quick enough to meet the objectives so the company began exploring alternatives.
Why Goff Associates, Inc. (GAI)?
GAI is known for creative problem solving and thinking outside the box. GAI is also known for taking new ideas and successfully implementing them.
GAI was asked for a strategy to increase volume quickly. After analyzing the market place, GAI identified a strategy based on the disintermediation of lending. This strategy breaks a company down into functions, determines the company’s core competencies and then determines what functions can be outsourced. The company’s functions were broken down into three components, Origination, Servicing and Funding. CFC’s servicing was clearly its strongest core competency and funding was a close second. As a result, GAI began working on a strategy of originating loans through different channels for CFC.
GAI wrote a strategy paper that was approved by the Board of CFC’s parent company who is a Major Manufacturer. Once approved, GAI formed a cross-department team for implementation of the strategy. GAI developed a marketing strategy and assisted in the implementation of the strategy through a new Division.
The new Division substantially helped CFC achieve its objectives. It generated $1 billion in assets, which represented 10% of the company’s volume through the acquisition of pools of assets ($300 million) and the origination of assets through alternative channels ($700 million). The Division department generated $25 million in annual profits.