Stripe: Increasing the GDP of the Internet SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Stripe: Increasing the GDP of the Internet

In 2009, brothers Patrick and John Collison began working on a start-up called Stripe that made it simple for companies to send and receive money around the world. By the end of 2016, Stripe had expanded far beyond an online payment mechanism. Fueled by a belief that the Internet and developers would drive rapid economic growth across the world, Stripe created tools for social commerce and online marketplaces, as well as products to facilitate the creation and management of new businesses. Having raised nearly $450 million, Stripe was sufficiently funded to take advantage of a variety of industry tailwinds, including growth in global e-commerce, the proliferation of smartphones and mobile applications, and a rise in social media usage, among others. "Stripe: Increasing the GDP of the Internet" explores the challenges and opportunities faced by Stripe as it expanded from a small start-up to a company valued at $9 billion. Specific obstacles addressed in the case include: evaluating business opportunities, prioritizing new customers and markets, and assessing competition in a rapidly changing market. In a world with seemingly endless opportunities, the Collison brothers would have to be ruthless in prioritizing Stripe's product pipeline, geographical expansion, and partnerships, while continuing to provide value for Stripe's existing customers.

Authors :: Robert Siegel, Ryan Kissick

Topics :: Innovation & Entrepreneurship

Tags :: Growth strategy, International business, Internet, Joint ventures, Market research, Mobile, Social platforms, Time management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Stripe: Increasing the GDP of the Internet" written by Robert Siegel, Ryan Kissick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stripe Collison facing as an external strategic factors. Some of the topics covered in Stripe: Increasing the GDP of the Internet case study are - Strategic Management Strategies, Growth strategy, International business, Internet, Joint ventures, Market research, Mobile, Social platforms, Time management and Innovation & Entrepreneurship.

Some of the macro environment factors that can be used to understand the Stripe: Increasing the GDP of the Internet casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Stripe: Increasing the GDP of the Internet

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stripe: Increasing the GDP of the Internet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stripe Collison, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stripe Collison 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Stripe: Increasing the GDP of the Internet can be done for the following purposes –
1. Strategic planning using facts provided in Stripe: Increasing the GDP of the Internet case study
2. Improving business portfolio management of Stripe Collison
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stripe Collison

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Strengths Stripe: Increasing the GDP of the Internet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Stripe Collison in Stripe: Increasing the GDP of the Internet Harvard Business Review case study are -

Operational resilience

– The operational resilience strategy in the Stripe: Increasing the GDP of the Internet 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.

High switching costs

– The high switching costs that Stripe Collison has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Effective Research and Development (R&D)

– Stripe Collison 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: Increasing the GDP of the Internet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Stripe Collison 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 Collison is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stripe: Increasing the GDP of the Internet Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Analytics focus

– Stripe Collison 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 Robert Siegel, Ryan Kissick 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.

Strong track record of project management

– Stripe Collison is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Stripe Collison has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Stripe: Increasing the GDP of the Internet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Successful track record of launching new products

– Stripe Collison has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stripe Collison 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.

Diverse revenue streams

– Stripe Collison is present in almost all the verticals within the industry. This has provided firm in Stripe: Increasing the GDP of the Internet 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.

Cross disciplinary teams

– Horizontal connected teams at the Stripe Collison 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.

Low bargaining power of suppliers

– Suppliers of Stripe Collison in the sector have low bargaining power. Stripe: Increasing the GDP of the Internet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stripe Collison to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Innovation & Entrepreneurship segment

- digital transformation varies from industry to industry. For Stripe Collison digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stripe Collison 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.

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Weaknesses Stripe: Increasing the GDP of the Internet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Stripe: Increasing the GDP of the Internet are -

Slow decision making process

– As mentioned earlier in the report, Stripe Collison 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 Collison 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.

Slow to strategic competitive environment developments

– As Stripe: Increasing the GDP of the Internet HBR case study mentions - Stripe Collison takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Stripe: Increasing the GDP of the Internet, it seems that the employees of Stripe Collison 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.

Aligning sales with marketing

– It come across in the case study Stripe: Increasing the GDP of the Internet 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: Increasing the GDP of the Internet can leverage the sales team experience to cultivate customer relationships as Stripe Collison is planning to shift buying processes online.

Capital Spending Reduction

– Even during the low interest decade, Stripe Collison 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stripe Collison is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Stripe: Increasing the GDP of the Internet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Stripe: Increasing the GDP of the Internet 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 Collison has relatively successful track record of launching new products.

No frontier risks strategy

– After analyzing the HBR case study Stripe: Increasing the GDP of the Internet, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.

Products dominated business model

– Even though Stripe Collison 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 - Stripe: Increasing the GDP of the Internet should strive to include more intangible value offerings along with its core products and services.

Increasing silos among functional specialists

– The organizational structure of Stripe Collison is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Stripe Collison needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stripe Collison to focus more on services rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Stripe: Increasing the GDP of the Internet, in the dynamic environment Stripe Collison has struggled to respond to the nimble upstart competition. Stripe Collison has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Opportunities Stripe: Increasing the GDP of the Internet | 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: Increasing the GDP of the Internet are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Stripe Collison 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Stripe Collison 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: Increasing the GDP of the Internet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Stripe Collison has opened avenues for new revenue streams for the organization in the industry. This can help Stripe Collison to build a more holistic ecosystem as suggested in the Stripe: Increasing the GDP of the Internet case study. Stripe Collison can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

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 Collison can use these opportunities to build new business models that can help the communities that Stripe Collison operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.

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 Collison to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Learning at scale

– Online learning technologies has now opened space for Stripe Collison 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.

Loyalty marketing

– Stripe Collison 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Stripe Collison can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 Collison can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stripe Collison 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 Collison to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Stripe Collison can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Stripe: Increasing the GDP of the Internet 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.

Using analytics as competitive advantage

– Stripe Collison 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 Stripe: Increasing the GDP of the Internet - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stripe Collison to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– Stripe Collison can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.

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Threats Stripe: Increasing the GDP of the Internet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Stripe: Increasing the GDP of the Internet are -

Technology acceleration in Forth Industrial Revolution

– Stripe Collison has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Stripe Collison needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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 Collison 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 Innovation & Entrepreneurship industry regulations.

High dependence on third party suppliers

– Stripe Collison 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.

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 Stripe Collison in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

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.

Stagnating economy with rate increase

– Stripe Collison 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Stripe Collison 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 Collison is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Stripe Collison

– 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 Collison.

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 Collison 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.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Stripe Collison 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 Stripe: Increasing the GDP of the Internet .

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 Collison business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of Stripe: Increasing the GDP of the Internet 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: Increasing the GDP of the Internet 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: Increasing the GDP of the Internet 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: Increasing the GDP of the Internet 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: Increasing the GDP of the Internet 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 Collison needs to make to build a sustainable competitive advantage.

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