Private companies were being turned to for potable water in the world’s megacities due to impacts of climate change including droughts and flooding. Mexico City had endured several water-related crises, with its population suffering from floods, droughts, water shutoffs and disease. Although some access to piped water services was practically universal for Mexico City residents, services were limited or discontinuous. An accommodation that most households had made was in purchasing and installing a water holding tank on the roof or in the ground, with Rotoplás, a Mexican based water product and services provider, enjoying more than 55% of tank market share in Mexico. Rotoplás had ventured into wastewater treatment and recycling in 2016 with the acquisition of Sytesa, a design, construction, financing, operation, and maintenance business for wastewater management for industry and businesses. Market segments included lighter corporate users like shopping malls and heavy users like food processors or mining companies, and maybe “water as a service” would also end up as the place to be to supplement and assist homeowner associations and even municipal governments. However, services revenue was today a tiny fraction of overall cash flow at Rotoplás. The presence of larger competitors like Suez and Veolia and as well as unfavorable pricing and regulations could potentially slow down future growth. Could Rotoplás services be part of the solution to the water crisis in the nation’s capital? Or was the situation too intractable for even this local champion company to tackle? What pricing and regulatory changes might lead to financial and technical solutions for Mexico City’s water crisis?
In mid-2019, Carlos Hank, was deliberating over the results for Banorte Móvil – the mobile application for Banorte, Mexico’s most profitable and second-largest financial institution. Hank, who had been appointed as Banorte´s Chairman of the Board in January 2015, had overseen Banorte’s transformation (and multi-million-dollar investment) from a product and client volume-focused bank into a customer-centric, technology and data-driven organization with a radically new focus. Beyond investing in a new technology platform and deploying new digital channels, Banorte also invested in the development of internal capacities to convert data intelligence into profits. Spearheaded by José Antonio Murillo, an economist with a Ph.D. from Rice University, Banorte’s Analytics Business Unit (ABU) kicked off early on 2015, reporting directly to upper management and focused on increasing customer lifetime value. Over the course of its four-year trajectory, through data analytics and experimentation, which involved both experimenting with client incentives and tailored communication strategies through multiple channels, the ABU had successfully achieved higher product placement rates, particularly under Banorte Móvil’s platform. Yet, with 2.25 million active users, Banorte Móvil was still far from reaching its 4-million-user target by 2020. Adoption picked up, but Banorte Móvil was still losing many potential adopters along the mobile customer journey, particularly in its activation phase. Furthermore, 81% of app activity was for account balance or transaction views, with financial operations, such as card or service payments or acquisition of new bank products, accounting for a minority of the activity. If Banorte wanted to remain a top player in Mexico’s financial sector, it was clear to upper management that growth in mobile banking needed to be a priority. How could the bank successfully achieve its target? And, even if Banorte Móvil’s adoption numbers increased, would it be possible to get more value and engagement through this channel? As Banorte Móvil took off, Hank dwelled on the strategic decisions he had to make, especially considering what client segments to focus on for mobile adoption and use and how to effectively reach out to them. Furthermore, Hank knew they could not afford to neglect other banking channels, which still accounted for the bulk of Banorte’s operations.
Brothers André and Daniel Albuquerque founded the company Terra Nova in 2001 to mediate land disputes between poor families illegally living in urban areas and the official landowners—with the aspiration to improve the lives of the poor. A business-led approach to the issue, like Terra Nova’s, was innovative and contested amid the widespread belief that land disputes fell solely within the public sector’s purview. After struggling to develop a viable business model, the company received support from impact investing firm MOV Investimentos. By 2019, Terra Nova finally broke even and was exploring opportunities for scaling. But its leaders had to decide the right expansion model for the social business.
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Maria Fernanda Miguel joined Harvard Business School in 2013 as Executive Director for the Latin America Research Center (LARC). Her responsibilities include leading research activities for Spanish speaking countries in LATAM, and providing programmatic support to different areas of HBS including admissions, executive education, and immersion programs. Fernanda is based in Buenos Aires, Argentina.
Prior to join Harvard Business School, Fernanda was a Senior Director and Leader for LATAM Business Development at Merck and senior consultant at McKinsey & Co., serving as global Practice Manager for the Business Technology Office Health Care Practice.
Fernanda holds a degree in economics from the Argentine Catholic University, an MBA from Harvard Business School, and a Master of Research from University of Bath.
Fernanda has been very active in non-profit activities, including fund rising at the Fundación Acción Hemato-oncologica – Argentine National Academy of Medicine, and acting as advisor to the Board of Directors of the Hospital Garrahan.