MasterCard vs. Visa: The Fight for Mobile Payments SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MasterCard vs. Visa: The Fight for Mobile Payments
University of California, Berkeley-Haas collectionThe MasterCard vs. Visa case study allows students to put themselves in the shoes of Visa CEO, Joseph Saunders as Visa acquires CyberSource in 2010. Saunders at Visa and other CEOs at companies like MasterCard are facing new technologies such as mobile payments that might disrupt the ways they have been doing business for decades. The case study also presents background on Visa and MasterCard, as well as an overview of the mobile payments industry and players. Students are given an overview of the landscape and are asked to think about some of the key industry, competitive, strategic, and leadership issues that Saunders faces. The case study provides students with an opportunity to see the real-time challenges that a CEO might face and the decisions he or she would need to make with limited information.
Swot Analysis of "MasterCard vs. Visa: The Fight for Mobile Payments" written by Frank C. Schultz, Panyisa Samatadol includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Visa Mastercard facing as an external strategic factors. Some of the topics covered in MasterCard vs. Visa: The Fight for Mobile Payments case study are - Strategic Management Strategies, Competitive strategy, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the MasterCard vs. Visa: The Fight for Mobile Payments casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of MasterCard vs. Visa: The Fight for Mobile Payments
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MasterCard vs. Visa: The Fight for Mobile Payments case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Visa Mastercard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Visa Mastercard 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 MasterCard vs. Visa: The Fight for Mobile Payments can be done for the following purposes –
1. Strategic planning using facts provided in MasterCard vs. Visa: The Fight for Mobile Payments case study
2. Improving business portfolio management of Visa Mastercard
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 Visa Mastercard
Strengths MasterCard vs. Visa: The Fight for Mobile Payments | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Visa Mastercard in MasterCard vs. Visa: The Fight for Mobile Payments Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Visa Mastercard in the sector have low bargaining power. MasterCard vs. Visa: The Fight for Mobile Payments has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Visa Mastercard to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Visa Mastercard has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study MasterCard vs. Visa: The Fight for Mobile Payments - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Visa Mastercard
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Visa Mastercard does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Visa Mastercard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Visa Mastercard has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Visa Mastercard has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MasterCard vs. Visa: The Fight for Mobile Payments Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Visa Mastercard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Visa Mastercard is present in almost all the verticals within the industry. This has provided firm in MasterCard vs. Visa: The Fight for Mobile Payments 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.
Ability to recruit top talent
– Visa Mastercard is one of the leading recruiters in the industry. Managers in the MasterCard vs. Visa: The Fight for Mobile Payments are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Visa Mastercard 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 Visa Mastercard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MasterCard vs. Visa: The Fight for Mobile Payments Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the MasterCard vs. Visa: The Fight for Mobile Payments 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.
Cross disciplinary teams
– Horizontal connected teams at the Visa Mastercard 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.
High brand equity
– Visa Mastercard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Visa Mastercard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses MasterCard vs. Visa: The Fight for Mobile Payments | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MasterCard vs. Visa: The Fight for Mobile Payments are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Visa Mastercard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MasterCard vs. Visa: The Fight for Mobile Payments can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study MasterCard vs. Visa: The Fight for Mobile Payments 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 MasterCard vs. Visa: The Fight for Mobile Payments can leverage the sales team experience to cultivate customer relationships as Visa Mastercard is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MasterCard vs. Visa: The Fight for Mobile Payments, it seems that the employees of Visa Mastercard don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Visa Mastercard has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - MasterCard vs. Visa: The Fight for Mobile Payments should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank C. Schultz, Panyisa Samatadol suggests that, Visa Mastercard 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.
Need for greater diversity
– Visa Mastercard 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MasterCard vs. Visa: The Fight for Mobile Payments, is just above the industry average. Visa Mastercard 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MasterCard vs. Visa: The Fight for Mobile Payments 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 Visa Mastercard has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Visa Mastercard 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.
Skills based hiring
– The stress on hiring functional specialists at Visa Mastercard 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 operating costs
– Compare to the competitors, firm in the HBR case study MasterCard vs. Visa: The Fight for Mobile Payments has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Visa Mastercard 's lucrative customers.
Opportunities MasterCard vs. Visa: The Fight for Mobile Payments | 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 MasterCard vs. Visa: The Fight for Mobile Payments are -
Developing new processes and practices
– Visa Mastercard can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Visa Mastercard to increase its market reach. Visa Mastercard 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.
Manufacturing automation
– Visa Mastercard can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Visa Mastercard can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Visa Mastercard can use these opportunities to build new business models that can help the communities that Visa Mastercard operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Visa Mastercard has opened avenues for new revenue streams for the organization in the industry. This can help Visa Mastercard to build a more holistic ecosystem as suggested in the MasterCard vs. Visa: The Fight for Mobile Payments case study. Visa Mastercard can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Visa Mastercard is facing challenges because of the dominance of functional experts in the organization. MasterCard vs. Visa: The Fight for Mobile Payments 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Visa Mastercard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Visa Mastercard in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Visa Mastercard can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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 Visa Mastercard 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.
Learning at scale
– Online learning technologies has now opened space for Visa Mastercard 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 Visa Mastercard 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 Visa Mastercard to hire the very best people irrespective of their geographical location.
Threats MasterCard vs. Visa: The Fight for Mobile Payments External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MasterCard vs. Visa: The Fight for Mobile Payments are -
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 Visa Mastercard.
Stagnating economy with rate increase
– Visa Mastercard 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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Visa Mastercard in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Visa Mastercard is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Visa Mastercard 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.
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 Visa Mastercard business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MasterCard vs. Visa: The Fight for Mobile Payments, Visa Mastercard 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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Visa Mastercard in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
High dependence on third party suppliers
– Visa Mastercard 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.
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. Visa Mastercard can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Visa Mastercard needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of MasterCard vs. Visa: The Fight for Mobile Payments 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 MasterCard vs. Visa: The Fight for Mobile Payments 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 MasterCard vs. Visa: The Fight for Mobile Payments 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 MasterCard vs. Visa: The Fight for Mobile Payments 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 MasterCard vs. Visa: The Fight for Mobile Payments 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 Visa Mastercard needs to make to build a sustainable competitive advantage.
