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Published by:
ESMT European School of Management and Technology (2014)
August 15, 2014
14 pages
Data source:
Field research


Launched in early 2005, Zopa is a peer-to-peer online brokerage that couples British residents who want to lend with those who want to borrow. The company represents a new business model in the retail financial services industry, and since Zopa is not technically a bank and does not lend money itself, the capital requirements to run the business are relatively small. Compared to a traditional full service bank Zopa concentrates on only a few steps of the value chain. This case study provides an overview of how Zopa, a value innovator, has developed a unique position in the market through an innovative business model. This case enables students to develop a good understanding of the elements of a value innovation and how technologies have the potential to shake up an established industry structure and its key players. Students also get to discuss the sustainability of competitive advantage in a business in which network effects play an important role. Finally, the case can be used to address the topic of how incumbent firms should respond to innovative new business models.


Competitive advantage; Tipping point; Disruptive innovation; Strategic innovation; Business model; Business model innovation; Differentiation; First-mover advantage; New market space; On-line banking; Peer to Peer; UK banking industry; Value innovation; ZOPA; New-product development
GBP3 million revenue, 27 employees
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