Paybox.net (Germany): A Mobile Payment Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Paybox.net (Germany): A Mobile Payment Service
Paybox.net, founded in 1999, is a frontrunner in providing mobile payment services in Germany and other European countries. The case discusses the development and roll- out of the m-payment services, the business model and marketing approach used, the technological and organizational challenges that the company faced as well as the sustainability of the paybox competitive position.
Swot Analysis of "Paybox.net (Germany): A Mobile Payment Service" written by Tawfik Jelassi, Philipp Leutiger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Paybox.net Payment facing as an external strategic factors. Some of the topics covered in Paybox.net (Germany): A Mobile Payment Service case study are - Strategic Management Strategies, Marketing, Strategy and Communication.
Some of the macro environment factors that can be used to understand the Paybox.net (Germany): A Mobile Payment Service casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Paybox.net (Germany): A Mobile Payment Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paybox.net (Germany): A Mobile Payment Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Paybox.net Payment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Paybox.net Payment 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 (Germany): A Mobile Payment Service can be done for the following purposes –
1. Strategic planning using facts provided in Paybox.net (Germany): A Mobile Payment Service case study
2. Improving business portfolio management of Paybox.net Payment
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Paybox.net Payment
Strengths Paybox.net (Germany): A Mobile Payment Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Paybox.net Payment in Paybox.net (Germany): A Mobile Payment Service Harvard Business Review case study are -
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Paybox.net Payment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Paybox.net Payment 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.
Innovation driven organization
– Paybox.net Payment is one of the most innovative firm in sector. Manager in Paybox.net (Germany): A Mobile Payment Service 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 Paybox.net Payment 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.
Ability to recruit top talent
– Paybox.net Payment is one of the leading recruiters in the industry. Managers in the Paybox.net (Germany): A Mobile Payment Service 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
- Paybox.net Payment 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 Payment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paybox.net (Germany): A Mobile Payment Service Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Paybox.net Payment in the sector have low bargaining power. Paybox.net (Germany): A Mobile Payment Service has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Paybox.net Payment to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Paybox.net Payment
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Paybox.net Payment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Paybox.net Payment 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 Tawfik Jelassi, Philipp Leutiger 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.
Sustainable margins compare to other players in Communication industry
– Paybox.net (Germany): A Mobile Payment Service firm has clearly differentiated products in the market place. This has enabled Paybox.net Payment to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Paybox.net Payment to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Paybox.net (Germany): A Mobile Payment Service 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.
Strong track record of project management
– Paybox.net Payment is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Paybox.net Payment 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 Paybox.net (Germany): A Mobile Payment Service - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Paybox.net (Germany): A Mobile Payment Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paybox.net (Germany): A Mobile Payment Service are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paybox.net (Germany): A Mobile Payment Service, it seems that the employees of Paybox.net Payment 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Paybox.net Payment 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.
High cash cycle compare to competitors
Paybox.net Payment 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.
Skills based hiring
– The stress on hiring functional specialists at Paybox.net Payment 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.
Aligning sales with marketing
– It come across in the case study Paybox.net (Germany): A Mobile Payment Service 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 Paybox.net (Germany): A Mobile Payment Service can leverage the sales team experience to cultivate customer relationships as Paybox.net Payment is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Tawfik Jelassi, Philipp Leutiger suggests that, Paybox.net Payment 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.
Low market penetration in new markets
– Outside its home market of Paybox.net Payment, firm in the HBR case study Paybox.net (Germany): A Mobile Payment Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Paybox.net (Germany): A Mobile Payment Service 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 Paybox.net Payment has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Paybox.net Payment 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. Paybox.net Payment 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.
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 Payment supply chain. Even after few cautionary changes mentioned in the HBR case study - Paybox.net (Germany): A Mobile Payment Service, 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 Payment vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Paybox.net Payment is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Paybox.net (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service | 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 (Germany): A Mobile Payment Service are -
Building a culture of innovation
– managers at Paybox.net Payment 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 Communication segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Paybox.net Payment 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.
Learning at scale
– Online learning technologies has now opened space for Paybox.net Payment 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.
Manufacturing automation
– Paybox.net Payment can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Creating value in data economy
– The success of analytics program of Paybox.net Payment has opened avenues for new revenue streams for the organization in the industry. This can help Paybox.net Payment to build a more holistic ecosystem as suggested in the Paybox.net (Germany): A Mobile Payment Service case study. Paybox.net Payment 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 Payment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Paybox.net Payment has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Paybox.net (Germany): A Mobile Payment Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Paybox.net Payment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Paybox.net Payment 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.
Buying journey improvements
– Paybox.net Payment can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Paybox.net (Germany): A Mobile Payment Service 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.
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 Paybox.net Payment in the consumer business. Now Paybox.net Payment can target international markets with far fewer capital restrictions requirements than the existing system.
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 Payment 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Paybox.net Payment 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 Payment 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 Payment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Paybox.net (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service are -
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. Paybox.net Payment 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
– Paybox.net Payment 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.
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 (Germany): A Mobile Payment Service, Paybox.net Payment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Increasing wage structure of Paybox.net Payment
– 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 Payment.
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.
Shortening product life cycle
– it is one of the major threat that Paybox.net Payment is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Paybox.net Payment 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 Payment can take advantage of this fund but it will also bring new competitors in the Communication industry.
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 Payment needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Paybox.net Payment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Technology acceleration in Forth Industrial Revolution
– Paybox.net Payment has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Paybox.net Payment needs to keep up with the evolution of technology in the Communication 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Paybox.net Payment in the Communication industry. The Communication 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.
Stagnating economy with rate increase
– Paybox.net Payment 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.
Weighted SWOT Analysis of Paybox.net (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service 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 (Germany): A Mobile Payment Service 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 Payment needs to make to build a sustainable competitive advantage.
