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 - – geopolitical disruptions, there is increasing trade war between United States & China, increasing transportation and logistics costs, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, 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 -
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.
Successful track record of launching new products
– Stripe Stripe's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stripe Stripe's 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.
Low bargaining power of suppliers
– Suppliers of Stripe Stripe's in the sector have low bargaining power. Stripe: Helping Money Move on the Internet, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stripe Stripe's to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Analytics focus
– Stripe Stripe's 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 Sarit Markovich, Nilima Achwal, Eric Queathem 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.
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.
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.
Diverse revenue streams
– Stripe Stripe's is present in almost all the verticals within the industry. This has provided firm in Stripe: Helping Money Move on the Internet, Spanish Version 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.
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.
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.
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 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.
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.
Need for greater diversity
– Stripe Stripe's 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.
Increasing silos among functional specialists
– The organizational structure of Stripe Stripe's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Stripe Stripe's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stripe Stripe's to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Stripe: Helping Money Move on the Internet, Spanish Version 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 Stripe: Helping Money Move on the Internet, Spanish Version can leverage the sales team experience to cultivate customer relationships as Stripe Stripe's is planning to shift buying processes online.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stripe Stripe's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Stripe: Helping Money Move on the Internet, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Stripe: Helping Money Move on the Internet, Spanish Version, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Slow decision making process
– As mentioned earlier in the report, Stripe Stripe's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Stripe Stripe's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 -
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.
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.
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.
Loyalty marketing
– Stripe Stripe's 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.
Leveraging digital technologies
– Stripe Stripe's 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
– 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.
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 Stripe Stripe's 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 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stripe Stripe's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Stripe: Helping Money Move on the Internet, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Buying journey improvements
– Stripe Stripe's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Stripe: Helping Money Move on the Internet, Spanish Version 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.
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.
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. Stripe Stripe's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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.
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.
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.
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 .
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.
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.
High dependence on third party suppliers
– Stripe Stripe's 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 Stripe Stripe's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 Stripe Stripe's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.