Yoyo Wallet: Entering the Mobile Payment Space in the United States SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Yoyo Wallet: Entering the Mobile Payment Space in the United States
Yoyo Wallet, a technology start-up headquartered in London, United Kingdom, developed a mobile application for smartphones to facilitate in-store payments and loyalty data collection. Inspired by the success of Starbucks' loyalty-integrated mobile application, Yoyo Wallet strove to become the ultimate tool for retailers in enhancing customer experience. The company planned to enter the mobile payment industry in the United States; however, Yoyo had to compete with existing wallets (like Apple Pay, Samsung Pay, and Android Pay), navigate through the uncertainty of the industry's future, and adapt their strategy to the competitive environment in the United States.
Swot Analysis of "Yoyo Wallet: Entering the Mobile Payment Space in the United States" written by Bryan Hong, Sara Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yoyo Wallet facing as an external strategic factors. Some of the topics covered in Yoyo Wallet: Entering the Mobile Payment Space in the United States case study are - Strategic Management Strategies, Growth strategy, International business, IT and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Yoyo Wallet: Entering the Mobile Payment Space in the United States casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing energy prices, technology disruption, there is increasing trade war between United States & China, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Yoyo Wallet: Entering the Mobile Payment Space in the United States
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yoyo Wallet: Entering the Mobile Payment Space in the United States case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yoyo Wallet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yoyo 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States can be done for the following purposes –
1. Strategic planning using facts provided in Yoyo Wallet: Entering the Mobile Payment Space in the United States case study
2. Improving business portfolio management of Yoyo 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 Yoyo Wallet
Strengths Yoyo Wallet: Entering the Mobile Payment Space in the United States | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yoyo Wallet in Yoyo Wallet: Entering the Mobile Payment Space in the United States Harvard Business Review case study are -
Innovation driven organization
– Yoyo Wallet is one of the most innovative firm in sector. Manager in Yoyo Wallet: Entering the Mobile Payment Space in the United States Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Yoyo Wallet: Entering the Mobile Payment Space in the United States 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.
Diverse revenue streams
– Yoyo Wallet is present in almost all the verticals within the industry. This has provided firm in Yoyo Wallet: Entering the Mobile Payment Space in the United States 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.
High switching costs
– The high switching costs that Yoyo 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Yoyo Wallet: Entering the Mobile Payment Space in the United States firm has clearly differentiated products in the market place. This has enabled Yoyo Wallet to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Yoyo Wallet to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Yoyo 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Yoyo Wallet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yoyo Wallet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Yoyo Wallet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yoyo Wallet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Yoyo Wallet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yoyo Wallet 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.
Strong track record of project management
– Yoyo Wallet is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Yoyo Wallet in the sector have low bargaining power. Yoyo Wallet: Entering the Mobile Payment Space in the United States has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yoyo Wallet to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Yoyo Wallet 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 Bryan Hong, Sara Guo 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.
Weaknesses Yoyo Wallet: Entering the Mobile Payment Space in the United States | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yoyo Wallet: Entering the Mobile Payment Space in the United States are -
Increasing silos among functional specialists
– The organizational structure of Yoyo Wallet is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Yoyo Wallet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yoyo Wallet to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Yoyo Wallet 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.
Interest costs
– Compare to the competition, Yoyo 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.
Aligning sales with marketing
– It come across in the case study Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States can leverage the sales team experience to cultivate customer relationships as Yoyo Wallet is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Yoyo Wallet: Entering the Mobile Payment Space in the United States HBR case study mentions - Yoyo 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 operating costs
– Compare to the competitors, firm in the HBR case study Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Yoyo 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Yoyo Wallet: Entering the Mobile Payment Space in the United States, in the dynamic environment Yoyo Wallet has struggled to respond to the nimble upstart competition. Yoyo Wallet has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yoyo Wallet is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Yoyo Wallet: Entering the Mobile Payment Space in the United States can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Yoyo Wallet 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Yoyo Wallet: Entering the Mobile Payment Space in the United States, is just above the industry average. Yoyo 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.
Opportunities Yoyo Wallet: Entering the Mobile Payment Space in the United States | 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States are -
Leveraging digital technologies
– Yoyo 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.
Creating value in data economy
– The success of analytics program of Yoyo Wallet has opened avenues for new revenue streams for the organization in the industry. This can help Yoyo Wallet to build a more holistic ecosystem as suggested in the Yoyo Wallet: Entering the Mobile Payment Space in the United States case study. Yoyo Wallet can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Yoyo Wallet 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 Leadership & Managing People segment.
Loyalty marketing
– Yoyo Wallet 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 Leadership & Managing People industry, but it has also influenced the consumer preferences. Yoyo Wallet can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yoyo Wallet 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.
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 Yoyo Wallet in the consumer business. Now Yoyo Wallet can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yoyo Wallet can use these opportunities to build new business models that can help the communities that Yoyo Wallet operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yoyo 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.
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. Yoyo 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. Yoyo 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.
Better consumer reach
– The expansion of the 5G network will help Yoyo Wallet to increase its market reach. Yoyo 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.
Developing new processes and practices
– Yoyo 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yoyo Wallet is facing challenges because of the dominance of functional experts in the organization. Yoyo Wallet: Entering the Mobile Payment Space in the United States 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.
Threats Yoyo Wallet: Entering the Mobile Payment Space in the United States External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yoyo Wallet: Entering the Mobile Payment Space in the United States are -
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 Yoyo Wallet in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Yoyo 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 Yoyo Wallet.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yoyo 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States .
Environmental challenges
– Yoyo 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. Yoyo Wallet can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High dependence on third party suppliers
– Yoyo 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yoyo Wallet in the Leadership & Managing People industry. The Leadership & Managing People 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.
Technology acceleration in Forth Industrial Revolution
– Yoyo Wallet has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Yoyo Wallet needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
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 Yoyo Wallet business can come under increasing regulations regarding data privacy, data security, etc.
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. Yoyo Wallet needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Yoyo Wallet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Yoyo Wallet 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.
Weighted SWOT Analysis of Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet: Entering the Mobile Payment Space in the United States 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 Yoyo Wallet needs to make to build a sustainable competitive advantage.
