Intuit

Intuit Case
Case
Individual
Individual Assignment
Assignment
Q.1 Why and how exactly might Xero (and similar competitors) be a threat to Quickbooks? How
concerned should Intuit be about competitors such as Xero?

• Xero and similar competitors like Cabbage pose a considerable

threat to Quickbooks. Both are SAAS based solutions and offer
similar products
• Both cater to Small and Medium Business
• Xero focuses mainly on connecting advisors with their clients and
hence a smaller market to focus to whereas Quickbooks offers a
plethora of services including IPP and Conceirage
• Xero and other competitors leverage data from other platforms like
Amazon whereas Quickbooks only relies on its own data
• Xero has presence in multiple countries including US. Whereas
Quickbooks also has presence in global market, its major market-
share is in US
• Quickbooks initially started as a desktop app and has to make
difficult choice between feature enhancement and moving exisiting
features to cloud.

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Q.2 What should be the business model for QuickBooks Financing? Substantiate your response by
listing pros and cons for the chosen business model.
1. Open marketplace similar to Google Adwords
2. Pre-negotiated offers from a limited set of pre-selected providers
3. Products or services offered directly by Intuit, similar to Financial Supplies

• Option 1 is not viable because Quickbook would want to limit the

financing options to trusted sources only and an open marketplace
would be hard to regulate
• Options 2 may not be attractive as it is found that the Quickbook
users would not like to see ads in the system and do not go for
reviews
• Option 3 looks more viable for multiple reasons:
– Quickbooks has direct control on who gets what based on the data of the
businesses used for several years
– They can use their own financial products for financing
– They can build the network effect and provide more options for lenders and
creditors
– Quickbooks can apply a commission model and make best use of the platform
with all the resources already available

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Q.3 Between QuickBooks Financing and Concierge, which is the more important opportunity to
pursue? Why?

• QuickBooks Financing is a better option to pursue than Concierge:

– Financing is closely related to the accounting business that Quickbooks has
experience with
– QuickBooks is highly customized and it is difficult for Data Scientists to predict
data in absence of standard fields
– Concierge may create issues as it is a multi-homing business while Finance can
be single homed
– Concierge can be tricky business as the financial users do not like to see ads
and reviews unless they are highly related to the work that they are doing and
the move can backfire as the users may move to other platforms
– Intuit has high competition in Concierge space as there are already established
players like American Express, Visa, Mastercard, ABN, ABC and Costco
– Intuit had access to data from only 24% of its customers (1.1 milj. out of 4.5
milj.) and issues with data quality

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Q.4 To what extent should Intuit pursue platform opportunities for QuickBooks (QB)? Why?
1. Peer-to-peer platform for QB customers (e.g. Intuit Customer Network). No Intuit Partner
Platform, no QuickBooks Financing (QBF), and no Concierge.
2. Peer-to-peer platform plus platform for third-party developers. No concierge and no QBF, but
possibly rely on third-party developers to develop similar initiatives
3. Peer-to-peer platform plus platform for third party developers plus Concierge and/or QBF
4. None of the above – stay focused on QB as a pure product

• Option3 – Intuit should pursue all the options except for the
Conierge
• Peer to peer platform –
– A peer-to-peer payment platform would enable QuickBooks to capture a large
market because approximately “12% of U.S. economy moves through
QuickBooks”. By taking just a small transaction fee such as 50 cents,
QuickBooks would be able to capitalize on the large market.
– Positive network effects: When customers of SMBs get exposure to QuickBooks
while using the payment platform, QuickBooks get free marketing and
branding. This will result in increased customer acquisitions.
• Platform for third party developers
– There is a clear value proposition for both sides of the platform: Customers of
QuickBooks benefit from the added functionalities in QuickBooks and high
customizability. Third-party developers gain access to the large customer base
of QuickBooks and an invaluable data through QuickBooks. Furthermore, Intuit
is able to gain revenue through a commission model from third-party apps.
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– To compete in the accounting software market, the third-party developer
Q.4 To what extent should Intuit pursue platform opportunities for QuickBooks (QB)? Why?
1. Peer-to-peer platform for QB customers (e.g. Intuit Customer Network). No Intuit Partner
Platform, no QuickBooks Financing (QBF), and no Concierge.
2. Peer-to-peer platform plus platform for third-party developers. No concierge and no QBF, but
possibly rely on third-party developers to develop similar initiatives
3. Peer-to-peer platform plus platform for third party developers plus Concierge and/or QBF
4. None of the above – stay focused on QB as a pure product

– To compete in the accounting software market, the third-party developer platform is almost essential as
many of QuickBooks customers are adding these additional features through third-party developers
including Xero.
• QBF ( No Concierge)
– Concierge is not an attractive investment because of the low switching costs for discount offer platforms,
which is a problem and because the market is already highly contested. Furthermore, functioning as an
advertisement platform would irritate its core accounting software users as revealed by the HBS 2013
study and functioning as a reseller would not add real value in the supply chain.
– QBF has clear value proposition for customers and lenders (see answer in Question 2), when taking into
account the amount of loan needed by QBF SMB customers per year: $24 billion. If 5% of that realized, it
would be $1.2 billion of loan transaction through the site.

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