A SWOT Analysis for the Visa Inc. Company

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High School ・Business ・APA ・3 Sources

Visa Inc. refers to an international payment technology organization that binds businesses, governments, consumers and financial institutions. It does so in over 200 countries making them to utilize digital form of currencies instead of checks and cash.

Strengths Weakness

Ownership of the largest electronic payment networks in the globe.

Uncommon and changeable payment processing platform in the globe.

Gives a large variety of electronic payment services and products.

Loop system tends to suffer from very low management over the services meant for cardholder.

There is failure of customer negotiation which influences the acceptance of Visa cards.
Opportunities Threats

There is a lapse in small business spending which requires to be tapped.

Momentous acquisitions.

The Regulatory changes in the industry may limit its expansion of profits.

Rapid advancement in technology also pose potential threat.

Strengths

  • The company tends to own the biggest electronic payment networks in the globe. It tends to operate one biggest retail electronic payment networks based on the number of transactions, total volume and payment volume. This includes consumer debit, credit as well as commercial payments which are mainly offered under visa Electron, PLUS brands and Interlink. Visa has a substantial competitive edge over is considerable in terms of total volume, cards issues, total volume and payment volume (Marketline, 2016). Visa tends to account for approximately half all the world's biggest electronic payments and three fourths of all the debit card transactions. Therefore, the company should capitalize on this strength to increase its profits and acquire new customers (Menon, 1999).
  • The company has a unique and scalable payment processing platform in the globe. The company tends to own as well as operate VisaNet which is regarded as a centralized, sure as well as international processing platform. The main advantage the company has over its competitors is that VisaNet was built on a consolidated architecture rather than what is known as distributed architecture which allows the organization to provide value-added, real-time information to its clients. This centralized platform of processing offers the firm the flexibility required to develop, enhance as well as modify its products and services in an efficient manner.
  • The company has a wide variety of electronic payment services and products. The firm’s product platforms tend to include cash access, debit, prepaid products and credit for clients, governments and businesses. This allows the organization’s clients in developing as well as customizing their personal payment programs with the purpose of meeting the specific needs of their merchants and card holders. The firm also tends to offer its clients issuer processing with the aim of supporting the organization’s prepaid and debit platforms.

Weaknesses

  • The company’s loop system tends to suffer from very low control over the services of the cardholder. Operator companies for open-loop networks under normal circumstances do not set fees, issue cards or even regulate the interest rates that the various cardholders are charged when using their cards. Issuers are the individuals with the sole responsibility of determining such factors as well as other numerous card features. As a result, the success of the company’s open loop system is highly reliant on the capabilities of the financial institutions in providing attractive packages to card holders.
  • There is failure of customer negotiation which affects the acceptance of Visa cards. For instance, in Canada acceptance of Visa cards has been strained by lack of customer negotiation. As a result, Walmart one of the largest retailers announced that it would no longer accept Visa cards in its Canada Stores. Therefore, the company should come up with strategies to improve Visa Card acceptance.

Opportunities

  • There is a gap in small business spending which needs to be tapped. According to reports, many of the small businesses tend to use only cheques and cash. As a result, the firm should exploit this chance.
  • Secondly, momentous acquisitions may help the firm in extending its service competences. This will help the company access more resources required to increase its revenue and growth (Hill & Westbrook, 1997).

Threats

  • The Regulatory changes in the industry may limit its expansion of profits. Over the past few years, the reimbursement fees such as interchange rates have come under a sharp scrutiny across the globe. These regulations are negatively impacting the firm's debit businesses particularly in the United States as well as the associated revenues through creation of negative pressure exerted on pricing.
  • Rapid advancement in technology also pose potential threat in a case where the company does not come up with any innovation

Positioning Analysis

The payment industry is in the middle of making some of the biggest changes. These changes will result in a better experience for consumers and faster growth for the company. In terms of performance, 2015 was perceived as a great year for Visa Inc. because it reported some adjusted earnings per share growth of a total of 16% and growth in revenue at a rate of 9%. According to the reports delivered, this has been the trend for the past few years. This shows that the company has been performing well and in a consistent manner.

In terms of growth, the company tends to evaluate its strategies to achieve long term goals. The company believes that strategies should be formulated and structured towards the accomplishment of long-term value. The company is adopting innovations to move with the first changing industry. According to the company's reports, people tend to view the Visa card as being an innovation. The company has been able to use the card to conduct as well as grow commerce in an easy and safe manner in partnership with its customers (Marketline, 2016). As a result, customers tend to have access to huge amounts of money that are beyond their carrying capacity. This provides convenience to the users. Visa Inc. has a competitive edge over its competitors. This is because, it is regarded as the largest retail network that engages in electronic payments. During the 2015 fiscal year, it recorded a total of $13,880 registering an increase of 9.3%. From this, it is evident that Visa. Inc. is widely accepted because it offers its client an easy, convenient and fast access to electronic funds.

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