Stripe: Helping Money Move on the Internet, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Stripe: Helping Money Move on the Internet, Spanish Version
This case features Stripe, a startup that enables merchants to accept payments from customers on the web, on mobile devices, and at the point of sale (POS). Stripe was launched in 2011 by the Collison brothers and quickly gained traction with e-commerce startups, particularly software and platform developers who needed help building their payment processing infrastructures. Stripe incurred high fixed costs in developing its platform and had low margins per transaction, so the company needed to reach high processing volumes (i.e., scale) to survive. This was challenging, as Stripe competed with large payment processors and traditional banks that had high processing volumes and were able to offer merchants significantly lower rates than Stripe. Still, merchants valued Stripe's solution because it was simple and versatile. Students assume the role of the Collisons to think about possible strategies Stripe could pursue to process higher volumes of transactions. Students are challenged to think about the potential response of the incumbents to Stripe's different growth alternatives. The teaching note presents the Value Net framework and discusses the importance of considering complementors and their effect on a firm's strategy. Finally, a discussion about Stripe's potential entry into the Indian market allows students to apply the concepts they learned in the discussion of a new market.
Authors :: Sarit Markovich, Nilima Achwal, Eric Queathem
Swot Analysis of "Stripe: Helping Money Move on the Internet, Spanish Version" written by Sarit Markovich, Nilima Achwal, Eric Queathem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stripe Stripe's facing as an external strategic factors. Some of the topics covered in Stripe: Helping Money Move on the Internet, Spanish Version case study are - Strategic Management Strategies, Decision making, Growth strategy, International business, Joint ventures, Market research, Mobile, Pricing, Research & development, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Stripe: Helping Money Move on the Internet, Spanish Version casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Stripe: Helping Money Move on the Internet, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stripe: Helping Money Move on the Internet, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stripe Stripe's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stripe Stripe's 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 Stripe: Helping Money Move on the Internet, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Stripe: Helping Money Move on the Internet, Spanish Version case study
2. Improving business portfolio management of Stripe Stripe's
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 Stripe Stripe's
Strengths Stripe: Helping Money Move on the Internet, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stripe Stripe's in Stripe: Helping Money Move on the Internet, Spanish Version Harvard Business Review case study are -
Learning organization
- Stripe Stripe's 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 Stripe Stripe's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stripe: Helping Money Move on the Internet, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Stripe Stripe's is one of the most innovative firm in sector. Manager in Stripe: Helping Money Move on the Internet, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Stripe Stripe's 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.
Superior customer experience
– The customer experience strategy of Stripe Stripe's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Stripe Stripe's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stripe Stripe's 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.
Training and development
– Stripe Stripe's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Stripe: Helping Money Move on the Internet, Spanish Version 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Stripe: Helping Money Move on the Internet, Spanish Version firm has clearly differentiated products in the market place. This has enabled Stripe Stripe's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Stripe Stripe's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Stripe Stripe's is one of the leading recruiters in the industry. Managers in the Stripe: Helping Money Move on the Internet, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Stripe Stripe's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stripe Stripe's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Stripe Stripe's 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 Stripe Stripe's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Stripe Stripe's 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 Stripe: Helping Money Move on the Internet, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Stripe Stripe's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stripe Stripe's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Stripe: Helping Money Move on the Internet, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stripe: Helping Money Move on the Internet, Spanish Version are -
High bargaining power of channel partners
– Because of the regulatory requirements, Sarit Markovich, Nilima Achwal, Eric Queathem suggests that, Stripe Stripe's 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.
High cash cycle compare to competitors
Stripe Stripe's 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.
Lack of clear differentiation of Stripe Stripe's products
– To increase the profitability and margins on the products, Stripe Stripe's needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Stripe Stripe's 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 Stripe Stripe's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Stripe: Helping Money Move on the Internet, Spanish Version, it seems that the employees of Stripe Stripe's 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.
Low market penetration in new markets
– Outside its home market of Stripe Stripe's, firm in the HBR case study Stripe: Helping Money Move on the Internet, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe Stripe's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe Stripe's has relatively successful track record of launching new products.
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 Stripe Stripe's supply chain. Even after few cautionary changes mentioned in the HBR case study - Stripe: Helping Money Move on the Internet, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stripe Stripe's vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Stripe Stripe's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Stripe: Helping Money Move on the Internet, Spanish Version | 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 Stripe: Helping Money Move on the Internet, Spanish Version are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Stripe Stripe's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stripe Stripe's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stripe Stripe's 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 Stripe Stripe's to hire the very best people irrespective of their geographical location.
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 Stripe Stripe's in the consumer business. Now Stripe Stripe's can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stripe Stripe's can use these opportunities to build new business models that can help the communities that Stripe Stripe's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Stripe Stripe's 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.
Better consumer reach
– The expansion of the 5G network will help Stripe Stripe's to increase its market reach. Stripe Stripe's 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, Stripe Stripe's is facing challenges because of the dominance of functional experts in the organization. Stripe: Helping Money Move on the Internet, Spanish Version 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.
Creating value in data economy
– The success of analytics program of Stripe Stripe's has opened avenues for new revenue streams for the organization in the industry. This can help Stripe Stripe's to build a more holistic ecosystem as suggested in the Stripe: Helping Money Move on the Internet, Spanish Version case study. Stripe Stripe's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Stripe Stripe's 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 Stripe Stripe's 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.
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. Stripe Stripe's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Stripe Stripe's 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.
Threats Stripe: Helping Money Move on the Internet, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stripe: Helping Money Move on the Internet, Spanish Version are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stripe Stripe's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Stripe: Helping Money Move on the Internet, Spanish Version, Stripe Stripe's 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 .
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. Stripe Stripe's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Stripe Stripe's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Stripe Stripe's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Stripe Stripe's
– 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 Stripe Stripe's.
Shortening product life cycle
– it is one of the major threat that Stripe Stripe's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Stripe Stripe's 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. Stripe Stripe's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Stripe Stripe's business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Stripe Stripe's 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.
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 Stripe Stripe's.
Technology acceleration in Forth Industrial Revolution
– Stripe Stripe's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Stripe Stripe's 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.
Regulatory challenges
– Stripe Stripe's 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.
Weighted SWOT Analysis of Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe Stripe's needs to make to build a sustainable competitive advantage.