Facultad de Ciencias Económicas y Empresariales INTERNATIONALIZATION PLAN FOR BIZUM Autora: Alejandra Ramírez Amorós Director: Javier Morales Mediano MADRID | Abril 2020 INDEX INDEX .......................................................................................................................................... 1 FIGURES INDEX ......................................................................................................................... 4 TABLES INDEX .......................................................................................................................... 4 GRAPHS INDEX .......................................................................................................................... 4 SUMMARY .................................................................................................................................. 5 INTRODUCTION ......................................................................................................................... 6 METHODOLOGY ........................................................................................................................ 7 PART 1: THE STRATEGY OF BUSINESS INTERNATIONALIZATION .............................. 8 A) CURRENT STATE OF AFFAIRS .......................................................................................... 8 1. The payments industry in Spain ............................................................................................ 8 1.1 History of the traditional payments industry .................................................................... 8 1.2 Industry players and dynamics ....................................................................................... 11 1.3 The arrival of mobile payments: Fintech disruption ...................................................... 12 2. Bizum .................................................................................................................................. 15 2.1 A collaborative project of Spanish banks ...................................................................... 15 2.2 Current business model and future prospects................................................................. 17 2.3 Competitive landscape ................................................................................................... 21 2.3.1 Apple Pay ................................................................................................................ 21 2.3.2 Google Pay .............................................................................................................. 21 2.3.3 PayPal ...................................................................................................................... 22 2.3.4 Venmo ..................................................................................................................... 22 2.3.5 Twyp ........................................................................................................................ 22 2.3.6 Verse ........................................................................................................................ 23 B) THEORETICAL FRAMEWORK ......................................................................................... 25 1. Internationalization: Concept definition .............................................................................. 25 1.1 Market development strategy ......................................................................................... 25 1.2 Internationalization drivers and motives ........................................................................ 27 1 1.3 Internationalization advantages...................................................................................... 30 1.4 Internationalization risks ................................................................................................ 31 2. Analysis of theoretical internationalization models............................................................. 32 2.1 Uppsala internationalization model: Organic approach ................................................. 32 2.2 Born-global internationalization model: Challenging the traditional approach ............. 35 2.3 Comparison of the Uppsala and the Born-global models .............................................. 36 2.4 Internationalization model of the payments industry: The Visa vs. PayPal case ........... 39 2.4.1 Visa .......................................................................................................................... 39 2.4.2 PayPal ...................................................................................................................... 40 2.5 Bizum’s internationalization model and Hollensen’s internationalization phases ......... 41 PART 2: DESIGN OF AN INTERNATIONALIZATION PLAN FOR BIZUM ...................... 44 1. PHASE 1: The decision whether to internationalize ............................................................... 44 2. PHASE 2: Deciding which markets to enter ........................................................................... 48 2.1 Cultural factors .................................................................................................................. 49 2.2 Administrative factors ....................................................................................................... 50 2.3 Geographical factors .......................................................................................................... 52 2.4 Economic factors ............................................................................................................... 53 2.5 Competitive analysis of potential markets ......................................................................... 57 2.5.1 Competitive landscape in France ................................................................................ 57 2.5.2 Competitive ladscape in Germany .............................................................................. 58 2.5.3 Competitive ladscape in Italy ...................................................................................... 58 2.5.4 Competitive landscape in Portugal ............................................................................. 59 2.6 Potential markets conclusión ............................................................................................. 59 3. PHASE 3: Market entry strategies .......................................................................................... 62 4. PHASE 4: Design of a global marketing plan ......................................................................... 65 4.1 Solution instead of Product ................................................................................................ 66 4.2 Access instead of Place ...................................................................................................... 66 4.3 Value instead of Price ........................................................................................................ 67 4.4 Education instead of Promotion......................................................................................... 67 5. PHASE 5: Implementation and control of the internationalization plan ................................. 69 5.1 Timing of the internationalization plan ............................................................................. 69 5.2 Control of the internationalization plan ............................................................................. 69 2 CONCLUSIONS ......................................................................................................................... 71 CONTRIBUTIONS ..................................................................................................................... 73 LIMITATIONS ........................................................................................................................... 75 ACKNOWLEDGEMENTS ........................................................................................................ 76 BIBLIOGRAPHY ....................................................................................................................... 77 ANNEXES .................................................................................................................................. 84 3 FIGURES INDEX Figure 1: Illustrative example of three-step process………………………………………...17 Figure 2: Summary of Bizum's current situation (2020)…………………………………...20 Figure 3: Ansoff Matrix………………………………………………………………....26 Figure 4: Yip's Internationalization Driver Framework…………………………………….27 Figure 5: Main motives for starting export…………………………………………………..29 Figure 6: Johanson and Wiedersheim-Paul Framework……………………………………33 Figure 7: Uppsala vs Born Global models…………………………………………………...37 Figure 8: CAGE Framework………………………………………………………………….48 Figure 9: Member countries of the Single Euro Payments Area…………………………...51 Figure 10: Map of main mobile peer-to-peer apps and their adoption……………………..57 Figure 11: Potential Markets analysis………………………………………………………..60 Figure 12: Market entry strategies……………………………………………………………62 Figure 13: From the 4Ps to the SAVE model………………………………………………..65 Figure 14: Bizum’s internationalization tentative timetable……………………………….69 Figure 15: Feedforward control system……………………………………………………...70 TABLES INDEX Table 1: Comparative table of mobile payment apps……………………………………….24 Table 2: Comparison of Uppsala and Born Global models of internationalization………38 Table 3: Bizum SWOT analysis……………………………………………………………...44