Strategy Formulation

Paypal Company

Paypal has been widely known as a global payment business company around the world. It has enabled many people around the globe to make and receive their payments more securely without the fear of sharing the customer’s financial details without their consent. The company has been operating ever since 1998 when it was founded (Leavitt, 2010). Paypal has been very successful due to the good implementation of its organization functions by the management. It is important for us to know that there are four functions of management in any organization. These functions include; controlling, planning, leading and organizing. Paypal has some factors that mainly affect it both internally and externally. These factors include; ethics, technology, diversity and innovation. These functions have always had some considerable impact on the management of the PayPal Company.

Competitive Advantage of Paypal Company

According to Keane, over the years, the company has been having some meaningful fist-mover advantage over the other online and mobile payments companies across the globe. The company has some huge competitive advantage over the others due to some several things. It is estimated that Paypal has over 169 million users around the world, over 10 million merchants. The company also has over two-thirds of the 100 largest online retailers (Peng & Sun, 2009). Keane goes ahead to state that Paypal will no doubt remain as one of the most widely digital wallet platform to be used around the world in the coming more years.

The company’s payment platform is often used more than five times around the world, compared to the other checkout payment options. The company’s one touch product has been viewed as one of the best game changer in the online payment options. The product has tremendously improved the value proposition of many merchants (It has improved the rate of conversion by about 50% in some instances). The proposition value of many consumers has also been improved through the One Touch product that was introduced by the company (It has enhanced the ease of use and speed for the customers). The One Touch product has simplified the payment process and also reduced the number of clicks that are required to make any purchase. The One Touch product has also improved the security of the stored payment credentials of the customers across the many multiple devices.

Through the product, many merchants and consumers have been automatically enrolled and integrated with the Paypal system. Since the merchants and the customers have been automatically integrated into the company system, they are no longer required to do anything for them to be upgraded to the new technology (zero integration). The One Touch technology has enabled the company’s many of its million users and almost half of the Internets 500 retailers to be automatically and immediately switched to the One Touch technology. Many experts around the world believe that the One Touch technology by the PayPal Company will help in the pushing of TPV above PayPal’s mid 20 % guidance.

Strategies used by Paypal Company to create value and gain competitive advantage

According to recent reports, the transaction driven sites like PayPal and Amazon have been increasingly embracing the Adaptive design technology in their operation. The main reason for using the adaptive design by these companies is because they want to deliver their sites on mobile up to to at least 40% faster (Roth, 2010). The companies believe that this can only be achieved by adopting the use of Adaptive design technology instead of the responsive Web Design technology. PayPal was listed as one of the top 15 companies in the world that have really adapted the use of the Adaptive design technology. Other companies that were listed include; Amazon, Bing, Pandora, CNN, Pinterest, Google among others.

Marketers around the world have come to realize that many people around the world are now acquiring mobile phones and it’s as if they depend upon them to carry out most of their operations. Due to this fact of acquisition of mobile phones by many people, the marketers have now been forced to go back to the drawing board and think of ways of how they are going to deliver the same content across the multiple screens instead of just having to maintain and build different sites for the mobile phones and desktops. The marketers have been increasingly trying to find and come with different methods on how they can successfully manage to deliver their content to the many multiple screens that have now emerged.

The Paypal Company has not been left behind in these efforts in making its payment system more simple and easy to use by its customers and merchants. The company has been doing everything in its power to try and make a mark in the mobile payments space. It is important to note that even though the company has some mobile payment capabilities, it has not managed to gain so much considerable traction in the mobile payment space unlike Apple that has successfully done it so far (Peng & Sun, 2009). We all know for a fact that Apple Pay came into the mobile payment market much later after Paypal had already entered and managed to easily outdo Paypal.

However, Paypal has learnt its lessons and is now putting in more efforts that are geared towards improving its mobile payment system. The company has already started taking some effective steps in the right direction and now the company is reported to be making some considerable strides each and every day. The company has now gone ahead to acquire Paydiant with a huge amount of $ 280 million. The company intends to use Paydiant’s platform to enable its merchants to create their own wallets and brand them on their own in turn this will accelerate the mobile in-store payments therefore driving the engagement of the consumers through the mobile payments, offers, prioritization of preferred payment types like the gift cards and the store branded credit cards and loyalty. This is projected to help the company to share the mobile payments spotlight.

The company has invested in many several initiatives in the last past years to enhance its competitive advantage over its rivals. The company is said to have heavily invested in biometrics through the support for smartphones that have the feature of fingerprint sensors. The company has successfully introduced payment support for some smart watches such as the Android Wear devices and the Pebble watch (Leavitt, 2010). The company also launched Pay after Delivery credit service. It did this through the partnership between it and other two companies; Cybersource and Authorize. The service has enabled many users around the world to pay for their goods up to 14 days after they have made their purchase.

Measurement guidelines used by Paypal Company to verify its strategic effectiveness

Fraud Detection and Handling:

The company has realized that electronic payment fraud is always costly as it can damage its reputation with its customers. Therefore, the company has put in place the necessary measure to curb such incidences (Roth, 2010). It has put in place robust fraud management capabilities.

Legal and Regulatory Issues:

The company has put in place some rules and regulations that all the customers and merchants are supposed to follow when transacting any business. Such laws include; laws relating to collecting value-added taxes, transaction reporting, handling return reports and many more other regulations.

References

Leavitt, N. (2010). Payment applications make e-commerce mobile. Computer, 43(12), 19-22.

Peng, H., & Sun, C. (2009, September). The Analysis on the Charging Mode of Third-Party Payment Platform in CC E-Commerce Market. In Management and Service Science, 2009. MASS'09. International Conference on (pp. 1-4). IEEE.

Roth, D. (2010). The Future of Money: It’s Flexible, Frictionless and (Almost) Free. Wired Magazine.