Paytm: Targeting More Pockets for Its Mobile Wallet SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Paytm: Targeting More Pockets for Its Mobile Wallet
Paytm enjoyed a position as the leader in India's market for mobile wallets, a digital service that enabled payments to be made through mobile devices. Paytm's major client, Uber, which developed and operated a smartphone-based, ride-hailing app as a way to compete with traditional taxi companies, had initially used Paytm's mobile wallet as the sole payment mode for Uber rides in India. However, in 2015 Uber revised its payment policy by adding a variety of payment options, such as debit cards, credit cards, and the addition of several other mobile wallet providers. Did Uber's strategies and plans represent a major concern for Paytm? Amid such changes in the highly competitive digital payment industry, what strategies should Paytm adopt to expand its own offerings and maintain its position as the market leader? What other options could the company pursue to ensure its sustainability and continuous growth? Sandeep Puri is affiliated with Institute of Management Technology, Ghaziaba.
Swot Analysis of "Paytm: Targeting More Pockets for Its Mobile Wallet" written by Sandeep Puri, Shivani Upadhyay, Siddharth Agarwal, Debasish Chatterjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Paytm Wallet facing as an external strategic factors. Some of the topics covered in Paytm: Targeting More Pockets for Its Mobile Wallet case study are - Strategic Management Strategies, International business, Strategy, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Paytm: Targeting More Pockets for Its Mobile Wallet casestudy better are - – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing commodity prices, geopolitical disruptions,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of Paytm: Targeting More Pockets for Its Mobile Wallet
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paytm: Targeting More Pockets for Its Mobile Wallet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Paytm Wallet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet can be done for the following purposes –
1. Strategic planning using facts provided in Paytm: Targeting More Pockets for Its Mobile Wallet case study
2. Improving business portfolio management of Paytm Wallet
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Paytm Wallet
Strengths Paytm: Targeting More Pockets for Its Mobile Wallet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Paytm Wallet in Paytm: Targeting More Pockets for Its Mobile Wallet Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Paytm Wallet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Paytm Wallet is one of the leading recruiters in the industry. Managers in the Paytm: Targeting More Pockets for Its Mobile Wallet are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Paytm Wallet 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.
Ability to lead change in Leadership & Managing People field
– Paytm Wallet 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 Paytm Wallet in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– Paytm: Targeting More Pockets for Its Mobile Wallet firm has clearly differentiated products in the market place. This has enabled Paytm Wallet to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Paytm Wallet to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Paytm Wallet digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Paytm Wallet 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
– Paytm Wallet has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Paytm: Targeting More Pockets for Its Mobile Wallet 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.
Cross disciplinary teams
– Horizontal connected teams at the Paytm Wallet 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.
High brand equity
– Paytm Wallet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Paytm Wallet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Paytm Wallet is present in almost all the verticals within the industry. This has provided firm in Paytm: Targeting More Pockets for Its Mobile Wallet 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.
Operational resilience
– The operational resilience strategy in the Paytm: Targeting More Pockets for Its Mobile Wallet 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.
Weaknesses Paytm: Targeting More Pockets for Its Mobile Wallet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paytm: Targeting More Pockets for Its Mobile Wallet are -
High operating costs
– Compare to the competitors, firm in the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm Wallet 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Paytm Wallet 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. Paytm Wallet 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet, is just above the industry average. Paytm Wallet needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Paytm Wallet is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Paytm Wallet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet, in the dynamic environment Paytm Wallet has struggled to respond to the nimble upstart competition. Paytm Wallet has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Paytm: Targeting More Pockets for Its Mobile Wallet HBR case study mentions - Paytm Wallet 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm Wallet has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Skills based hiring
– The stress on hiring functional specialists at Paytm Wallet has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Sandeep Puri, Shivani Upadhyay, Siddharth Agarwal, Debasish Chatterjee suggests that, Paytm Wallet 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, Paytm Wallet 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.
Opportunities Paytm: Targeting More Pockets for Its Mobile Wallet | 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 Paytm: Targeting More Pockets for Its Mobile Wallet are -
Better consumer reach
– The expansion of the 5G network will help Paytm Wallet to increase its market reach. Paytm Wallet 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Paytm Wallet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Paytm Wallet can use these opportunities to build new business models that can help the communities that Paytm Wallet operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Paytm Wallet 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, Paytm: Targeting More Pockets for Its Mobile Wallet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Paytm Wallet can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Paytm: Targeting More Pockets for Its Mobile Wallet 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Paytm Wallet in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Paytm Wallet is facing challenges because of the dominance of functional experts in the organization. Paytm: Targeting More Pockets for Its Mobile Wallet 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.
Leveraging digital technologies
– Paytm Wallet 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.
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. Paytm Wallet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Paytm Wallet 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. Paytm Wallet 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.
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 Paytm Wallet 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.
Developing new processes and practices
– Paytm Wallet can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Paytm Wallet can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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 Paytm: Targeting More Pockets for Its Mobile Wallet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet are -
Regulatory challenges
– Paytm Wallet 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 Leadership & Managing People 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.
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 Paytm Wallet in the Leadership & Managing People sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Paytm Wallet 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Paytm Wallet 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 Paytm Wallet
– 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 Paytm Wallet.
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 Paytm Wallet.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Paytm Wallet with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Paytm Wallet business can come under increasing regulations regarding data privacy, data security, etc.
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.
Environmental challenges
– Paytm Wallet 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. Paytm Wallet can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Paytm Wallet is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm Wallet needs to make to build a sustainable competitive advantage.
