Should Kredivo prioritize expanding its merchant network or focus on deepening relationships with existing high-performing partners?

Introduction

The trade-off Kredivo faces is whether to prioritize expanding its merchant network or focus on deepening relationships with existing high-performing partners. This decision is crucial for Kredivo's growth strategy and market positioning. I'll analyze this trade-off by examining the current business context, evaluating potential impacts, and proposing a data-driven approach to make an informed decision.

Step 1

Clarifying Questions (3 minutes)

• Based on Kredivo's current market position, I'm thinking about the scale of our existing merchant network. Could you provide some context on our current merchant base size and growth rate over the past year?

Why it matters: Helps understand the potential for expansion vs. optimization Expected answer: Moderate-sized network with steady growth Impact on approach: Would influence the balance between expansion and deepening relationships

• Considering our revenue model, I'm curious about the contribution of transaction fees vs. interest income. What's the approximate split between these revenue streams?

Why it matters: Informs which strategy might have a more significant impact on revenue Expected answer: Majority from interest income, growing share from transaction fees Impact on approach: Would guide focus on high-value transactions or volume increase

• Looking at user behavior, I'm wondering about the repeat purchase rate with existing merchants. What percentage of our users make multiple purchases with the same merchant within a 3-month period?

Why it matters: Indicates potential for deepening merchant relationships Expected answer: Moderate repeat rate, varies by merchant category Impact on approach: High repeat rates would favor deepening relationships

• Considering technical scalability, how much additional load can our current system handle if we rapidly expand our merchant network?

Why it matters: Determines if expansion is feasible without major infrastructure investments Expected answer: System can handle 2-3x current load without significant upgrades Impact on approach: Limited scalability would favor focusing on existing partners

• Regarding our team capacity, what's the current split of resources dedicated to merchant acquisition vs. account management for existing partners?

Why it matters: Assesses our ability to execute either strategy effectively Expected answer: 60% acquisition, 40% account management Impact on approach: Would influence resource reallocation needs for chosen strategy