Case Study Description of Paybox.Net: Mobilizing mCommerce
Paybox.net AG was the world's first mass-marketable mobile payment system. Launched in 1999 at the height of the dot-com boom, it has been steadily losing ground. The company's founder, and architect of the technology underlying Paybox, must decide if his product has a future and, if so, what the market strategy should be.
Authors :: Michael Parent, Harpreet Singh, Matt Woerner, Yulian Zhang
Swot Analysis of "Paybox.Net: Mobilizing mCommerce" written by Michael Parent, Harpreet Singh, Matt Woerner, Yulian Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Paybox.net Paybox facing as an external strategic factors. Some of the topics covered in Paybox.Net: Mobilizing mCommerce case study are - Strategic Management Strategies, IT, Marketing, Strategic planning, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Paybox.Net: Mobilizing mCommerce casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Paybox.Net: Mobilizing mCommerce
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paybox.Net: Mobilizing mCommerce case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Paybox.net Paybox, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Paybox.net Paybox 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 Paybox.Net: Mobilizing mCommerce can be done for the following purposes –
1. Strategic planning using facts provided in Paybox.Net: Mobilizing mCommerce case study
2. Improving business portfolio management of Paybox.net Paybox
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 Paybox.net Paybox
Strengths Paybox.Net: Mobilizing mCommerce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Paybox.net Paybox in Paybox.Net: Mobilizing mCommerce Harvard Business Review case study are -
Innovation driven organization
– Paybox.net Paybox is one of the most innovative firm in sector. Manager in Paybox.Net: Mobilizing mCommerce Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Paybox.net Paybox has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Paybox.net Paybox to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Paybox.net Paybox in the sector have low bargaining power. Paybox.Net: Mobilizing mCommerce has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Paybox.net Paybox to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Paybox.net Paybox in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Paybox.net Paybox is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael Parent, Harpreet Singh, Matt Woerner, Yulian Zhang can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Paybox.net Paybox
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Paybox.net Paybox does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Paybox.Net: Mobilizing mCommerce 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.
Diverse revenue streams
– Paybox.net Paybox is present in almost all the verticals within the industry. This has provided firm in Paybox.Net: Mobilizing mCommerce 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Paybox.Net: Mobilizing mCommerce firm has clearly differentiated products in the market place. This has enabled Paybox.net Paybox to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Paybox.net Paybox to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Paybox.net Paybox 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.
Learning organization
- Paybox.net Paybox 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 Paybox.net Paybox is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paybox.Net: Mobilizing mCommerce Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Paybox.net Paybox has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Paybox.Net: Mobilizing mCommerce 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.
Weaknesses Paybox.Net: Mobilizing mCommerce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paybox.Net: Mobilizing mCommerce are -
Products dominated business model
– Even though Paybox.net Paybox 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 - Paybox.Net: Mobilizing mCommerce should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Paybox.net Paybox 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.
Increasing silos among functional specialists
– The organizational structure of Paybox.net Paybox is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Paybox.net Paybox needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Paybox.net Paybox to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Paybox.net Paybox 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.
High cash cycle compare to competitors
Paybox.net Paybox has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Paybox.net Paybox, firm in the HBR case study Paybox.Net: Mobilizing mCommerce needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Paybox.net Paybox 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 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 Paybox.net Paybox supply chain. Even after few cautionary changes mentioned in the HBR case study - Paybox.Net: Mobilizing mCommerce, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Paybox.net Paybox vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Paybox.net Paybox 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paybox.Net: Mobilizing mCommerce, it seems that the employees of Paybox.net Paybox 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Paybox.net Paybox is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Paybox.Net: Mobilizing mCommerce can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Paybox.Net: Mobilizing mCommerce | 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 Paybox.Net: Mobilizing mCommerce are -
Building a culture of innovation
– managers at Paybox.net Paybox 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Paybox.net Paybox is facing challenges because of the dominance of functional experts in the organization. Paybox.Net: Mobilizing mCommerce 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Paybox.net Paybox 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.
Leveraging digital technologies
– Paybox.net Paybox 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.
Manufacturing automation
– Paybox.net Paybox 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Paybox.net Paybox can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Paybox.net Paybox can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Paybox.net Paybox can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Paybox.net Paybox can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Paybox.net Paybox has opened avenues for new revenue streams for the organization in the industry. This can help Paybox.net Paybox to build a more holistic ecosystem as suggested in the Paybox.Net: Mobilizing mCommerce case study. Paybox.net Paybox can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Paybox.net Paybox can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Paybox.net Paybox 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.
Loyalty marketing
– Paybox.net Paybox has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Paybox.net Paybox 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.
Threats Paybox.Net: Mobilizing mCommerce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paybox.Net: Mobilizing mCommerce are -
Consumer confidence and its impact on Paybox.net Paybox 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.
Regulatory challenges
– Paybox.net Paybox 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.
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 Paybox.net Paybox in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Paybox.net Paybox needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Paybox.net Paybox can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Paybox.net Paybox has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Paybox.net Paybox 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.
Shortening product life cycle
– it is one of the major threat that Paybox.net Paybox is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Paybox.net Paybox
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Paybox.net Paybox.
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. Paybox.net Paybox needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Paybox.Net: Mobilizing mCommerce, Paybox.net Paybox 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Paybox.net Paybox can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Paybox.Net: Mobilizing mCommerce .
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. Paybox.net Paybox can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Paybox.net Paybox business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Paybox.Net: Mobilizing mCommerce 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 Paybox.Net: Mobilizing mCommerce 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 Paybox.Net: Mobilizing mCommerce 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 Paybox.Net: Mobilizing mCommerce 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 Paybox.Net: Mobilizing mCommerce 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 Paybox.net Paybox needs to make to build a sustainable competitive advantage.
