Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness
Online trading continued to prosper throughout the 1990s, with acredit-card-based electronic payment system being the preferred mode of effecting payment. However, this payment system was not suitable for transactions valued at only a few cents or a few dollars. Minimizing transaction fees or developing new systems to settle micropayments were two options. IDE began developing a micropayment system, pay-EZ, in early 1999 to settle small transactions. Several competitive systems, Acosis and Millicent, had already penetrated the market. Management was under time pressure to make pay-EZ marketable and overcome its technical and operational issues. Pay-EZ's viability had to be demonstrated at the general board meeting on October 18, 1999, two months before its official launch.
Authors :: Ali F. Farhoomand, Katherine Lo, Peter Lovelock
Swot Analysis of "Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness" written by Ali F. Farhoomand, Katherine Lo, Peter Lovelock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ez Pay facing as an external strategic factors. Some of the topics covered in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness casestudy better are - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
increasing commodity prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ez Pay, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ez Pay operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness can be done for the following purposes –
1. Strategic planning using facts provided in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study
2. Improving business portfolio management of Ez Pay
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ez Pay
Strengths Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ez Pay in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ez Pay are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Ez Pay in the sector have low bargaining power. Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ez Pay to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ez Pay is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Ez Pay has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ez Pay to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ez Pay digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ez Pay has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Ez Pay has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Ez Pay is present in almost all the verticals within the industry. This has provided firm in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Ez Pay is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ez Pay is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Ez Pay in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Ez Pay has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Strategy & Execution field
– Ez Pay is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ez Pay in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness are -
Low market penetration in new markets
– Outside its home market of Ez Pay, firm in the HBR case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness can leverage the sales team experience to cultivate customer relationships as Ez Pay is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Ez Pay has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali F. Farhoomand, Katherine Lo, Peter Lovelock suggests that, Ez Pay is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Ez Pay has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Ez Pay has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Ez Pay has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ez Pay has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness, is just above the industry average. Ez Pay needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness, in the dynamic environment Ez Pay has struggled to respond to the nimble upstart competition. Ez Pay has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ez Pay supply chain. Even after few cautionary changes mentioned in the HBR case study - Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ez Pay vulnerable to further global disruptions in South East Asia.
Opportunities Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ez Pay to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Ez Pay has opened avenues for new revenue streams for the organization in the industry. This can help Ez Pay to build a more holistic ecosystem as suggested in the Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study. Ez Pay can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ez Pay can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Ez Pay to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ez Pay to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ez Pay to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Ez Pay can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Ez Pay has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ez Pay to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ez Pay can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ez Pay in the consumer business. Now Ez Pay can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Ez Pay to increase its market reach. Ez Pay will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ez Pay is facing challenges because of the dominance of functional experts in the organization. Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ez Pay can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Ez Pay can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness, Ez Pay may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Shortening product life cycle
– it is one of the major threat that Ez Pay is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Ez Pay high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ez Pay with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Ez Pay can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Ez Pay demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Ez Pay has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ez Pay needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ez Pay business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Ez Pay needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ez Pay can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ez Pay.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Pay-EZ: International Digital Enterprise's Solution to On-line Microbusiness is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ez Pay needs to make to build a sustainable competitive advantage.
