ASSIGNMENT ON: STRATEGIC MANAGEMENT SUBMITTED TO: MERVYN SOOKUN SUBMITTED BY: SAUMEN ADHIKARY ID: L0722RBRB1010 ID-L0722RBRB1010 STRATEGIC MANAGEMENT Executive Summary: Paypal is the largest e commerce business allows sending and receiving money through internet with safely. Transferring money with no traditional paper works and the process is quick as well. Actually PayPal is doing their business through the bank. They funded their account by a bank account or credit card at the person’s choice. Since 2010 paypal using bank verification because of security and safety reason. For exceeding the credit limit the payers must need to verify their bank account. Here I describe about their process of working, environmental analysis through swot, company brief and future project, their target and with own recommendation. ITRODUCTION: PayPal permits to any business or person with a valid email address to securely and cost-effectively receive and send money online. PayPal builds on the already exist economic infrastructure of bank accounts and credit cards to make a worldwide payment solution. They deliver product fit for small trade, online payers, personal and others recent activities by traditional payment value. The size of the network and expending acceptance of reliable service assist paypal to become no 1 leading networks in online payments solution. PAYPAL WORKING PROCESS AND TIMELINE: After opening in account with paypal must need to verify by bank statement document. They send a few amount of money to the bank statement and we need to submit the amount in payal website. And code verification as well. The funding hierarchy working process: A PayPal account with balance Paypal extra, Paypal credit card, Paypal smart-connections or pay later option A valid registered bank account Different payment options such as non PayPal account The receiver can either request a check from PayPal established their own PayPal balance to their account. Paypal charges a bit to transfer the money they just work as a medium to make the internet paying process securely Timeline: Confinity was found in last of 1998 by Max Levchin, Peter Thiel, Luke Noesk and Ken Howery at the beginning time it was a palm pilot payments and cryptography organisation. And the X.com was founded by elon musk in March 1999, that time it was internet financial service. Two organisation confinity and x.com lauched their website in 1999. They working together in palm pilot. In 2000 paypal was founded in between confinity and x.com. To block the fraud accessed by automated system, paypal used a system called CAPTCHA by entering number from a picture. That time ebay become more popular and they also need to fix an online payments sysmstem, because the increase of online shopping. After that ebay is announced paypal as their official payment method. In January 2008 paypal connected with new technological company which was situated in israil, starting balance of $168 million, for improving eBay and PayPal security managing system. Paypal use total amount pay volume and the total amount of money was $60billion increase rate is 27% over ID-L0722RBRB1010 the last year. As 2011 paypal controls in 195 marketplace and handle nearly 235 million user accounts and above 105 million accounts are active. SWOT ANALYSIS OF PAYPAL: STREANGTH WEAKNESS OPPORTUNITY THREAT STREANGTH: Their business is totally cost effective The communication system is far better from the past, paypal take the great advantages from it. Now online shopping is very popular so its online growth is outstanding They got a big hand of loyal customer They leading the market share with high growth rate. At this moment they don’t have any strong competitor as well. Paypal has a strong brand image and well known to globally They have the powerful financial stability. Lots of liquid money and capital. Their price reasonable and attractive. By paying a few £ people can get high security Their reputation and customer service is 24/7 base. So any time any customer face any problem they will lend their hand. WEAKNESS: A bit burden for the people who are not interested in technology. Quite boring for him as we. Need to do so many things verifying bank account and set up direct debit as well. People feel unsecure as the pay hold their bank account and debit card no as well In currency converting process, sometimes they charge a lot, which is unexpected to the people. Alert pay is coming and people using their method as well. Financial difficulties faces when the recession coming, because want to keep their money on their hand instead of spending ID-L0722RBRB1010 OPPORTUNITY: Paypal are very popular in Europe but on the other hand they can choose a big market which is situated in south Asia like Bangladesh, India and Pakistan. Now a day’s credit cards are getting the popularity in asian country. So there is a big market waiting for them, if they can capture it tactfully. Now the emerging asian market are very important in world economy. People are felling interest in technology and they also love to shopping from home with relax mode. Payal through their business totally online, even on mobile phone as well. If they made symbian application for phone users they must get more popularity. They can enlarge their business and expend it to other places. THREATS: They still not face strong competition from any opposition. Alert pay coming in this business but still not financially strong or cannot make hindrance in paypal trading Now people using their debit card, through online shopping, no body want to give any bank details and waiting for verification Exchange rate conflictions always happen, because the rate is always changing No so many low cost competitors coming in the market and create a strong competition in their business. Example: alert pay doesn’t take any money transfer fee over £2. Price wars seen in every where Internet hacking groups always looking for sites week points to hack customer information. Always be aware of the cyber attack. MISSION AND VISION STAEMENT: Like other company paypal has also some mission for future and some vision as well. To thinking about future activities are called vision and the target to reach the goal is the mission. To be the number on secure online payment company in the world. Their future mission is to expand their business to asia pacific area main target to india. India starting to access paypal now but still not get the popularity and that could be the huge market for paypal. Over 120million people leaving there. Make their site more stronger in security purposes Careful about hacker attacks and they monitor it from 24/7 basis. PAYPAL BUSINESS MODEL: Pay pal success in the terms of customer and number was the three product phase strategy by former ceo of ebay says. First paypal give attention to enlarge its services among ebay users in the u.s then expand it to international market. Then expand paypal s business outside the ebay as well. Stage1: In the starting of the paypal the payments volume were mostly coming from ebay auction website. The system was much more attractive to used material sellers, most of them were personal or small in trade that was not valid for credit card and for the buyers as well. Actually many buyers are not ID-L0722RBRB1010 succeed for credit card seller account cause the lacked a commercial credit background. The facility also petition to buyers cause they funding paypal using their card or by through a bank account. Paypal owner an aggressive marketing campaign to run the business properly, they offered $10 if new customer register through him. STAGE 2: The main challenge for paypal in 2000 was its indefensible industry model. Primarily paypal offered its deals with very low cost and decide to earn on funds, which use paypal accounts. However, most recipients try to withdraw their money immediately. And most of the recipients sending their money through their credit and paypal will pay 2% of payment value. Sometime they face some problem when people say they don’t get the product yet and they want their money back. In delivery process they using new rule that must be signature if the product price is over $250 STAGE 3: Reduce their transaction fee for high level customer from 2.2% to 1.8%. but qualify for this section the transaction volume in monthly basic should be over $100000 Inspire their users not to recruit the ebay products by raising its referral bonus which can the maximum of $1000 In us credit card Providers Company pay pal offer them to their online merchants. Hiring the new sales forces to get large merchants company like apple, yahoo, itunes and thousands of online merchants They diminish their fees to encourage people to buy music online and a option for micropayments By opening new mobile application in apple store and android market. After that lots of people can use paypal through their mobile phone. It makes our life more easier. GLOBAL CHALLENGES FOR PAYPAL: Paypal has not established yet in many places that shows in the statistics that high no of people using internet there like Bangladesh, Egypt and Geogia. Coutry basis restriction for paypal: CHINA: In china paypal offer two types of account. There is no relation in between this account. Paypal.com accounts are global account for sending more and receiving money. In this account people cannot add money from other bank account. All non Chinese payment are paypal.com accounts On the other hand paypal.cn is the account for Chinese bank user. People can add money , buy products but the only currency is renminbi.