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 - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, supply chains are disrupted by pandemic , increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, there is backlash against globalization, 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 -
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.
Successful track record of launching new products
– Paytm Wallet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Paytm 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.
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.
Highly skilled collaborators
– Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Paytm Wallet in the sector have low bargaining power. Paytm: Targeting More Pockets for Its Mobile Wallet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Paytm Wallet to manage not only supply disruptions but also source products at highly competitive prices.
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.
Learning organization
- Paytm Wallet 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 Paytm Wallet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paytm: Targeting More Pockets for Its Mobile Wallet Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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 -
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.
Products dominated business model
– Even though Paytm Wallet 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 - Paytm: Targeting More Pockets for Its Mobile Wallet should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Paytm Wallet 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Paytm Wallet is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Paytm: Targeting More Pockets for Its Mobile Wallet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet, it seems that the employees of Paytm Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet 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 Paytm: Targeting More Pockets for Its Mobile Wallet can leverage the sales team experience to cultivate customer relationships as Paytm Wallet is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Paytm Wallet, firm in the HBR case study Paytm: Targeting More Pockets for Its Mobile Wallet needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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 -
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Paytm Wallet 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 Paytm Wallet to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Paytm 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.
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.
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 Paytm Wallet in the consumer business. Now Paytm Wallet can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Building a culture of innovation
– managers at Paytm 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.
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.
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.
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.
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. Paytm Wallet can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Stagnating economy with rate increase
– Paytm Wallet 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Paytm: Targeting More Pockets for Its Mobile Wallet, Paytm Wallet may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Paytm 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.
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.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Paytm 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, Paytm 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.
Consumer confidence and its impact on Paytm Wallet demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.