PayPal Company business report
The company is one of the largest organizations involved in online payment services. PayPal operates as an acquirer, processing payments for commercial users, auctioning sites and online vendors through charging a processing fee. SWOT analysis This is a strategic planning tool which can be applied by managers at PayPal to perform a situational analysis to understand current strengths, weakness, opportunities, and threats. Strengths PayPal has various strengths that allow it to thrive in the marketplace making it one of the leading companies in the industries and helping it protect the market share in the market as well as helping it penetrate new markets. One of the strengths includes strong free cash flow which provides PayPal with the resources to expand into new projects.
In addition, PayPal has a track record of product innovation due to its regular development of new products as well as a track record of integrating complimentary companies through acquisition and mergers since it has integrated some technology firms successfully in the past few years with the aim of building a reliable supply chain and streamlining its operations. Weaknesses One of PayPal’s weakness is that it has registered limited success outside its main business. With its present culture, PayPal has faced challenges moving into new products despite its market leadership in the industry. High exposure to fraud is another weakness of the company (Trautman, 2015). Considering the risks of frauds, an electronic money transfer and payment electronic system require a very strong protection and technical support.
Digital payment methods have become more effective year over year due to higher digital literacy, increasing connectivity, and penetration of internet, all of which have boosted the digital currency. Another opportunity involves tying up with numerous B2C businesses and include itself as one of the payment options, which will increase its customer base and transactions. New customers in the online channel is another opportunity that PayPal can take advantage of. The company can use big data analytics to identify increasing number of customers joining the online platform and to also know and serve their needs satisfactorily. PayPal can also open up new market based on new trends in the consumer behavior which will lead to a better chance for the company to diversify into new products categories and build new revenue streams too.
New entrants to the credit service market introduce new ways of doing things, bring innovation and put pressure on PayPal through offering new value suggestions to the clients, reducing costs, and lowering pricing strategy. Alternatives such as Google Pay, Stripe, and Skrill pose a threat to PayPal because they are available with better interfaces, lower rates, and customer service. Bargaining power of buyers PayPal meets customization demands of its customers effectively and therefore buyers are less likely to switch to other services. The company offers customers a good experience which causes them to pay more willingly for further services. Customers use PayPal as a trustee as a result of having limited information. Despite the recent growth of PayBox, PayPal is still leading in all market share segments.
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