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PayPal Holdings Inc (PYPL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for PayPal Holdings Inc (United States)


Based on various researches at Oak Spring University , PayPal Holdings Inc is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, supply chains are disrupted by pandemic , wage bills are increasing, talent flight as more people leaving formal jobs, increasing commodity prices, etc



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Introduction to SWOT Analysis of PayPal Holdings Inc


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PayPal Holdings Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PayPal Holdings Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PayPal Holdings Inc 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 PayPal Holdings Inc can be done for the following purposes –
1. Strategic planning of PayPal Holdings Inc
2. Improving business portfolio management of PayPal Holdings Inc
3. Assessing feasibility of the new initiative in United States
4. Making a Consumer Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PayPal Holdings Inc




Strengths of PayPal Holdings Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of PayPal Holdings Inc are -

Learning organization

- PayPal Holdings Inc 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 PayPal Holdings Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PayPal Holdings Inc emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– PayPal Holdings Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Consumer Financial Services industry. Secondly the value chain collaborators of PayPal Holdings Inc have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– PayPal Holdings Inc 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 Consumer Financial Services industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Digital Transformation in Consumer Financial Services industry

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

Ability to recruit top talent

– PayPal Holdings Inc is one of the leading players in the Consumer Financial Services industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.

Effective Research and Development (R&D)

– PayPal Holdings Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PayPal Holdings Inc staying ahead in the Consumer Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Training and development

– PayPal Holdings Inc has one of the best training and development program in Financial industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Diverse revenue streams

– PayPal Holdings Inc is present in almost all the verticals within the Consumer Financial Services industry. This has provided PayPal Holdings Inc 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 brand equity

– PayPal Holdings Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PayPal Holdings Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Consumer Financial Services industry

– PayPal Holdings Inc has clearly differentiated products in the market place. This has enabled PayPal Holdings Inc to fetch slight price premium compare to the competitors in the Consumer Financial Services industry. The sustainable margins have also helped PayPal Holdings Inc to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

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

Successful track record of launching new products

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



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Net Promoter Score



Weaknesses of PayPal Holdings Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of PayPal Holdings Inc are -

High dependence on PayPal Holdings Inc ‘s star products

– The top 2 products and services of PayPal Holdings Inc still accounts for major business revenue. This dependence on star products in Consumer Financial Services industry has resulted into insufficient focus on developing new products, even though PayPal Holdings Inc has relatively successful track record of launching new products.

Slow decision making process

– As mentioned earlier in the report, PayPal Holdings Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Consumer Financial Services industry over the last five years. PayPal Holdings Inc 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.

Skills based hiring in Consumer Financial Services industry

– The stress on hiring functional specialists at PayPal Holdings Inc 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.

Employees’ less understanding of PayPal Holdings Inc strategy

– From the outside it seems that the employees of PayPal Holdings Inc 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.

Interest costs

– Compare to the competition, PayPal Holdings Inc 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.

Lack of clear differentiation of PayPal Holdings Inc products

– To increase the profitability and margins on the products, PayPal Holdings Inc needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– PayPal Holdings Inc 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.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of PayPal Holdings Inc supply chain. Even after few cautionary changes, PayPal Holdings Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left PayPal Holdings Inc vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of PayPal Holdings Inc, it seems that company is thinking out the frontier risks that can impact Consumer Financial Services industry. 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.

Low market penetration in new markets

– Outside its home market of United States, PayPal Holdings Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though PayPal Holdings Inc has some of the most successful models in the Consumer Financial Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. PayPal Holdings Inc should strive to include more intangible value offerings along with its core products and services.




PayPal Holdings Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of PayPal Holdings Inc are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PayPal Holdings Inc can use these opportunities to build new business models that can help the communities that PayPal Holdings Inc operates in. Secondly it can use opportunities from government spending in Consumer Financial Services sector.

Using analytics as competitive advantage

– PayPal Holdings Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Consumer Financial Services sector. This continuous investment in analytics has enabled PayPal Holdings Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help PayPal Holdings Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects PayPal Holdings Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Consumer Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PayPal Holdings Inc 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. PayPal Holdings Inc 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, PayPal Holdings Inc is facing challenges because of the dominance of functional experts in the organization. PayPal Holdings Inc can utilize new technology in the field of Consumer Financial Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, PayPal Holdings Inc 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 PayPal Holdings Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Learning at scale

– Online learning technologies has now opened space for PayPal Holdings Inc 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.

Leveraging digital technologies

– PayPal Holdings Inc 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.

Finding new ways to collaborate

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

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 PayPal Holdings Inc 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.

Creating value in data economy

– The success of analytics program of PayPal Holdings Inc has opened avenues for new revenue streams for the organization in Consumer Financial Services industry. This can help PayPal Holdings Inc to build a more holistic ecosystem for PayPal Holdings Inc products in the Consumer Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions in Consumer Financial Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for PayPal Holdings Inc in the Consumer Financial Services industry. Now PayPal Holdings Inc can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– PayPal Holdings Inc can develop new processes and procedures in Consumer Financial Services 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.




Threats PayPal Holdings Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of PayPal Holdings Inc are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, PayPal Holdings Inc 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 PayPal Holdings Inc prominent markets.

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 PayPal Holdings Inc business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on PayPal Holdings Inc 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 Consumer Financial Services industry and other sectors.

Regulatory challenges

– PayPal Holdings Inc 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 Consumer Financial Services industry regulations.

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. PayPal Holdings Inc 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 PayPal Holdings Inc is facing in Consumer Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– PayPal Holdings Inc high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, PayPal Holdings Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Consumer Financial Services sector.

Easy access to finance

– Easy access to finance in Consumer Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. PayPal Holdings Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 PayPal Holdings Inc.

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. PayPal Holdings Inc needs to understand the core reasons impacting the Consumer Financial Services industry. This will help it in building a better workplace.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Consumer Financial Services industry are lowering. It can presents PayPal Holdings Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Consumer Financial Services sector.




Weighted SWOT Analysis of PayPal Holdings Inc Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PayPal Holdings Inc 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 PayPal Holdings Inc 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 PayPal Holdings Inc 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 PayPal Holdings Inc 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 PayPal Holdings Inc needs to make to build a sustainable competitive advantage.



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