Global business strategy
Global Business Strategy – INTL 706 – 004
Professor:
Professor: James MacDonald
Submitted By:
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Darshana Lad – 301201762 |
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Shamik Kunder – 301140117 |
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Syed Abdul Haseeb – 301217090 |
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Submitted on: 2nd February 2023 |
About the Company:
PhonePe is a mobile payments company based in Canada. It was founded in 2015 and operates as a platform for digital payments and financial services. The company provides a range of services including mobile recharge, utility bill payments, travel booking, money transfers, and online shopping. It uses the Unified Payments Interface (UPI) to enable instant transfer of money between bank accounts. PhonePe has partnerships with several banks and merchants to offer its services to a wide customer base in Canada (Singh, 2022).
Mission statement of PhonePe:
The official mission statement of PhonePe has not been made publicly available. However, the company aims to provide a comprehensive platform for digital payments and financial services in Canada, making financial transactions simple and accessible for everyone. It is committed to transforming the traditional banking and financial services industry by leveraging technology and innovation to create a more convenient and secure payment experience for its users.
Future of the company:
It is difficult to predict the exact future of PhonePe, as it depends on various factors such as market conditions, competition, and regulatory environment. However, the company has shown significant growth in recent years and has established itself as a leading player in the digital payments and financial services market in Canada.
As the adoption of digital payments continues to increase in Canada, PhonePe is well-positioned to benefit from the growing demand for its services. The company is also investing in new technology and expanding its product offerings to stay ahead of the competition and meet the evolving needs of its customers (Titus, & Mukherjee, 2019).
Porter’s analysis for PhonePe:
What is Porter’s analysis?
Porter's Five Forces is a framework for analyzing the competitiveness of an industry and the potential for profitability. The framework was developed by Michael E. Porter, a Harvard Business School professor, and is widely used in strategic planning and business analysis (Rahaman, & Mary, 2020).
The five forces in Porter's analysis are:
1. Threat of new entrants: The ease with which new competitors can enter the market and the level of barriers to entry.
2. Threat of substitute products or services: The availability of alternative products or services that can be used instead.
3. Bargaining power of suppliers: The ability of suppliers to drive up the cost of inputs and reduce the profitability of the industry.
4. Bargaining power of buyers: The ability of buyers to drive down the price of products or services and reduce the profitability of the industry.
5. Rivalry among existing competitors: The intensity of competition among existing players in the industry (Singh, 2022).
By analyzing each of these five forces, a company can assess the overall competitiveness of the industry and develop strategies to improve its position. In the case of PhonePe, a Porter's Five Forces analysis could help the company understand the competitive environment in the digital payments and financial services industry in Canada and identify potential opportunities and threats.
1-Threats of new entrants:
The threat of new entrants in the digital payments and financial services industry in Canada is moderate to high, depending on the specific circumstances. PhonePe will need to continue to innovate and differentiate itself to maintain its competitive edge and stay ahead of new entrants (Rahaman, & Mary, 2020).
How PhonePe will tackle the threats of new entrants:
PhonePe may use various strategies to tackle the threats of new entrants in the digital payments and financial services industry in Canada. Some of these strategies could include:
· Differentiation: PhonePe could focus on offering unique and innovative services that are not available from other players in the market, making it more difficult for new entrants to compete.
· Partnerships and collaborations: PhonePe could form partnerships and collaborations with banks, merchants, and other companies to strengthen its position in the market and make it harder for new entrants to gain a foothold.
· Customer loyalty: By providing excellent customer service and building strong relationships with its customers, PhonePe could increase customer loyalty and make it more difficult for new entrants to attract customers away.
· Brand recognition: PhonePe could continue to invest in marketing and advertising to increase brand recognition and awareness, making it more difficult for new entrants to establish themselves in the market.
· Technology: PhonePe could continue to invest in technology to maintain its competitive edge and ensure that its services are always at the forefront of innovation (Titus, & Mukherjee, 2019).
2-The threat of Substitute Products or services:
The threat of substitute products or services to PhonePe can be seen as moderate to high, depending on the specific circumstances. PhonePe will need to continue to innovate and offer compelling value to its customers to reduce the threat of substitutes and maintain its competitive position (Singh, 2022).
How PhonePe will tackle the Threats of Substitute Products and services:
PhonePe may use various strategies to tackle the threats of substitute products or services. Some of these strategies could include:
· Innovation: PhonePe could continue to innovate and offer new and unique services that are not available from other digital payment platforms, making it more difficult for customers to switch to substitutes.
· Customer experience: PhonePe could focus on providing an excellent customer experience, making it more likely that customers will continue to use its services and less likely to switch to substitutes.
· Partnerships and collaborations: PhonePe could form partnerships and collaborations with banks, merchants, and other companies to offer a more comprehensive range of services and reduce the threat of substitutes.
· Cost competitiveness: PhonePe could offer competitive pricing for its services, making it more attractive compared to substitutes.
· Brand recognition: PhonePe could continue to invest in marketing and advertising to increase brand recognition and awareness, making it more difficult for substitutes to establish themselves in the market (Rahaman, & Mary, 2020).
3-Rivalry among existing firms:
The rivalry among existing firms in the digital payments and financial services industry in Canada is high, and PhonePe will need to continue to innovate and differentiate itself to remain competitive. This could include offering unique services, improving the customer experience, and forming strategic partnerships and collaborations (Titus, & Mukherjee, 2019).
How PhonePe will tackle the Rivalry among existing firms:
PhonePe will have to navigate intense competition in the digital payments and financial services industry in Canada. To tackle the rivalry among existing firms, PhonePe may employ a combination of strategies. One approach could be to differentiate its services by offering unique and innovative features that set it apart from competitors. Another strategy could be to form partnerships and collaborations with banks, merchants, and other companies, making it harder for competitors to gain a foothold. Additionally, PhonePe could focus on building strong relationships with its customers and providing excellent customer service to increase customer loyalty and reduce the risk of customers switching to competitors. The company could also invest in marketing and advertising to increase brand recognition and make it more difficult for rivals to establish themselves in the market. Finally, PhonePe could continue to invest in technology to ensure that it remains at the forefront of innovation and maintain its competitive edge (Titus, & Mukherjee, 2019).
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4-Bargaining Power of Suppliers:
The bargaining power of suppliers for PhonePe is likely to be low to moderate. The company will still need to carefully manage its relationships with suppliers to ensure that it has access to the technology and services it needs to operate effectively (Rahaman, & Mary, 2020).
How PhonePe can tackle the Bargaining Power of Suppliers:
PhonePe can take various measures to reduce the bargaining power of suppliers and increase its own negotiating power. One strategy could be to diversify its supplier base by working with multiple suppliers rather than relying solely on one. This reduces the dependence on any one supplier and gives PhonePe more options in the event of a supply chain disruption. Another approach could be to negotiate favorable terms with suppliers, such as long-term contracts, volume discounts, and flexible payment terms. In addition, PhonePe could look to develop some technology and services in-house, reducing its dependence on external suppliers and giving it greater control over its operations. Finally, effective supplier management is key to reducing the bargaining power of suppliers. This involves regular performance evaluations, regular communication with suppliers, and ensuring that suppliers are meeting their obligations and delivering the best possible value for money (Rahaman, & Mary, 2020).
5-Bargaining Power of Buyers:
To tackle the bargaining power of buyers, PhonePe may focus on differentiating its services, providing excellent customer service, and continuously improving its offerings to meet the evolving needs of its customers. Additionally, the company may look to form partnerships and collaborations with other companies to increase its bargaining power and reduce the risk of buyers switching to competitors. Overall, the bargaining power of buyers will play a key role in determining PhonePe's success in the digital payments and financial services market (Titus, & Mukherjee, 2019).
How PhonePe will tackle the Bargaining Power of Buyers:
PhonePe can employ various strategies to reduce the bargaining power of buyers and increase its own negotiating power. Some of these strategies include:
· Offering unique and innovative services: By differentiating its services, PhonePe can make it more difficult for buyers to switch to alternative providers.
· Providing excellent customer service: Building strong relationships with its customers and providing excellent customer service can increase customer loyalty and reduce the risk of buyers switching to competitors.
· Forming partnerships and collaborations: Partnering with other companies can increase PhonePe's bargaining power and reduce the risk of buyers switching to competitors.
· Continuous improvement: Continuously improving its services and offerings to meet the evolving needs of its customers can help PhonePe remain competitive and reduce the bargaining power of buyers.
· Adaptive pricing strategy: PhonePe may also adjust its pricing strategy to take into account the bargaining power of buyers. For example, it may offer volume discounts or flexible pricing options to customers that agree to long-term contracts (Titus, & Mukherjee, 2019).
PESTEL Analysis:
The PESTEL analysis of PhonePe examines the political, economic, sociocultural, technological, environmental, and legal factors that impact the company's operations and future growth prospects. The political environment in Canada is supportive of digital payments and financial services, but changes in government policies or regulations can impact PhonePe. The growing Canadian economy is driving increased demand for digital payments, but the company must adapt to changes in the economy. Sociocultural factors, such as the increasing awareness of digital payments in Canada, can benefit PhonePe, but cultural differences between regions may present challenges. PhonePe operates in a rapidly changing technological environment and must continuously innovate to remain competitive. The company must also consider the environmental impact of its operations and ensure its services are eco-friendly. Finally, PhonePe must comply with legal and regulatory requirements in the digital payments and financial services sector, including privacy and data protection laws (Saravanan, 2019).
Political:
The political factor of the PESTEL analysis for PhonePe refers to the impact of government policies and regulations on the company's operations and future growth prospects. In Canada, the government has been supportive of digital payments and financial services, promoting the growth of companies such as PhonePe. However, changes in government policies or regulations can have a significant impact on the company, potentially limiting its operations or increasing its costs. PhonePe must be prepared to navigate the regulatory environment in Canada and be ready to respond to changes in government policies or regulations. It is important for PhonePe to stay up-to-date with the latest developments in government policies and regulations in order to ensure that it is able to operate effectively and meet the needs of its customers (Rahaman, & Mary, 2020).
Economic:
The economic factor of the PESTEL analysis for PhonePe refers to the impact of the economy on the company's operations and future growth prospects. The Canadian economy is growing and has a large population, providing a large market for digital payments and financial services companies such as PhonePe. However, the company must also be prepared to adapt to changes in the economy, such as shifts in consumer spending patterns or economic slowdowns. PhonePe may also face competition from other companies offering similar services, and must be able to effectively differentiate itself in order to maintain its market position. The company should also be mindful of its own financial performance, balancing growth with profitability and sustainability. It will be important for PhonePe to continue to evaluate and respond to economic trends in order to stay ahead of the competition and maintain its growth trajectory (Saravanan, 2019).
Social:
The sociocultural factor of the PESTEL analysis for PhonePe refers to the impact of social and cultural factors on the company's operations and future growth prospects. In Canada, awareness and adoption of digital payments and financial services are growing, presenting an opportunity for companies like PhonePe. However, there may be cultural differences between regions that the company must take into account, such as varying levels of comfort with technology or differences in preferred payment methods. PhonePe must also be mindful of social and cultural norms in Canada, such as privacy and security concerns, in order to build trust and credibility with its customers. The company should also be prepared to respond to changing social and cultural trends, such as shifts in consumer preferences or attitudes towards digital payments. By considering and responding to sociocultural factors, PhonePe will be better positioned to meet the needs of its customers and maintain its market position (Manish & Sergeeva, 2022).
Technological:
The technological factor of the PESTEL analysis for PhonePe refers to the impact of technology on the company's operations and future growth prospects. PhonePe operates in the digital payments and financial services sector, which is rapidly evolving and requires companies to stay up-to-date with the latest advancements in technology. The company must be prepared to invest in technology in order to maintain its competitiveness and offer the latest features and services to its customers. For example, PhonePe may need to invest in developing new features, improving the user experience, or enhancing security measures. At the same time, the company must also be mindful of the potential risks associated with technology, such as the possibility of hacking or data breaches. By staying ahead of technological advancements and effectively managing technology risks, PhonePe will be better positioned to meet the needs of its customers and continue to grow (Saravanan, 2019).
Environmental:
The environmental factor of the PESTEL analysis for PhonePe refers to the impact of the physical environment and sustainability concerns on the company's operations and future growth prospects. As a digital payments and financial services company, PhonePe has a relatively low environmental impact compared to other industries. However, the company still has a responsibility to operate in an environmentally responsible manner, such as by reducing its carbon footprint, recycling materials, and promoting sustainable practices. Additionally, the company must be prepared to respond to shifts in public attitudes towards environmental sustainability, such as increased concern for reducing waste or reducing carbon emissions. By considering and responding to environmental concerns, PhonePe will be better positioned to maintain its reputation, attract customers who are environmentally conscious, and ensure its long-term viability (Manish & Sergeeva, 2022).
Legal:
The legal factor of the PESTEL analysis for PhonePe refers to the impact of laws and regulations on the company's operations and future growth prospects. PhonePe operates in a highly regulated industry, with numerous laws and regulations that govern digital payments and financial services. The company must be compliant with these laws and regulations in order to maintain its business operations and avoid costly legal issues. This includes complying with laws related to privacy, data security, anti-money laundering, and consumer protection, among others. Additionally, the company must be prepared to respond to changes in laws and regulations, such as new privacy requirements or updates to anti-money laundering regulations. By staying informed about legal developments and complying with relevant laws and regulations, PhonePe will be better positioned to maintain its credibility and attract customers who are concerned about privacy and security.
In conclusion, by considering and responding to the various PESTEL factors, PhonePe will be better positioned to take advantage of opportunities for growth, manage potential challenges and risks, and ensure its long-term viability (Singh, 2022).
Market Analysis for PhonePe
If you own a smartphone and spend any time in India, there's a good chance that the Phonepay app is on your home screen. Most individuals in India use it to choose insurance plans, apply for loans, buy food, and pay for school tuition, among other things.
PhonePe is a leading digital payment platform in Canada that offers a range of financial services to its users. The platform has seen significant growth in the past few years and has established a strong user base in the country. The Canadian digital payment market is highly competitive, with players such as Paytm, Google Pay, and Amazon Pay. However, PhonePe has managed to differentiate itself by offering a wide range of services beyond just digital payments, including insurance, mutual funds, and gold investment options. The platform has also leveraged the widespread adoption of UPI in Canada to its advantage, offering seamless and secure digital transactions to users. Looking forward, the Canadian digital payment market is expected to grow at a rapid pace, and PhonePe is well positioned to capture a significant share of this growth. The company has also expanded its operations to other countries in South Asia, further consolidating its position in the region. In conclusion, PhonePe is a strong player in the Canadian digital payment market and has a promising future ahead (Titus, & Mukherjee, 2019).
Economic
PhonePe is a key player in the Canadian digital payment market and has seen tremendous growth in recent years. The platform has leveraged the widespread adoption of the Unified Payments Interface (UPI) in Canada to offer seamless and secure digital transactions to its users. PhonePe's revenue is primarily generated from the transaction fees it charges for the digital payments and financial services it offers. The company has also been successful in acquiring new users through partnerships with merchants and strategic collaborations with various financial institutions. In terms of expenses, PhonePe has significant investments in technology and infrastructure to maintain its position as a leading player in the market. The company has also been actively expanding its operations in other countries in South Asia, which will require further investments in the future (Titus, & Mukherjee, 2019).
Business Model
PhonePe's business model is based on offering a range of financial services to its users through its digital payment platform. The company generates revenue by charging transaction fees for the various services it provides, such as digital payments, insurance, mutual funds, and gold investment options. PhonePe also earns revenue from partnerships with merchants and strategic collaborations with financial institutions. The platform has leveraged the widespread adoption of UPI in Canada to offer seamless and secure digital transactions to its users, which has helped it to acquire a large user base and establish itself as a leading player in the Canadian digital payment market. In addition, PhonePe is continuously expanding its product offerings and geographical reach to increase its revenue streams and maintain its position in the market. Overall, PhonePe's business model is focused on providing convenient and accessible financial services to its users, which drives its revenue and growth (Pachabotla, & Konka, 2022).
Concerns:
PhonePe, like any other company, faces a number of concerns that it must address to maintain its position in the highly competitive Canadian digital payment market. One of the main concerns is competition from established players such as Paytm, Google Pay, and Amazon Pay. To differentiate itself and maintain its market share, PhonePe must continuously innovate and offer unique services to its users. Another concern is the regulatory environment in Canada, which can impact the company's operations. PhonePe must be proactive in adapting to regulatory changes to ensure its compliance with government policies. Security and privacy are critical concerns for the company, as it handles sensitive user data. To maintain the trust of its users, PhonePe must ensure that its systems are secure and user data is protected. The company must also address scalability concerns, as it must ensure its technology and infrastructure can accommodate its growing user base and product offerings. Additionally, PhonePe is actively expanding its operations in other countries in South Asia, which requires significant investments and resources. The company must carefully manage this expansion to ensure its profitability and long-term success (AJMERA, & BHATT, 2021).
Competitors
PhonePe operates in a highly competitive digital payment market in Canada. The company's main competitors include established players such as Paytm, Google Pay, and Amazon Pay. These competitors offer similar digital payment and financial services, and are well established in the Canadian market. To differentiate itself from its competitors, PhonePe has expanded its product offerings to include services such as insurance, mutual funds, and gold investment options. The company has also leveraged the widespread adoption of UPI in Canada to offer seamless and secure digital transactions to its users. Despite the competition, PhonePe has managed to establish a strong user base in Canada and has a promising outlook for the future. To maintain its competitive edge, the company must continuously innovate and improve its services to meet the evolving needs of its users (Manish & Sergeeva, 2022).
Concerns
Even said, Phonepe offers special services in India and offers user-friendly payment methods. Although Phonepe's business strategy and the state of the market have improved, there are still certain issues. The first point is that electronic transactions are obviously easy, useful, and suitable. It still requires some level of risk. As a consequence, you will require both technical support and a secure procedure to complete the transaction and transmit payments. Second, for the entire transaction process of opening an account, sending and receiving money, and so on, the internet and a fast connection are required. It has the potential to work in both developed and developing countries. Phonepe services, on the other hand, would not work well in developing nations or economies with limited internet access.
Conclusion:
In conclusion, PhonePe is a leading player in the Canadian digital payment market, offering a range of financial services to its users. The company has leveraged the widespread adoption of UPI in Canada to offer seamless and secure digital transactions and has established a strong user base. PhonePe's revenue is primarily generated from transaction fees and strategic partnerships with merchants and financial institutions. Despite the competition in the market, PhonePe has a promising outlook for the future, with plans to expand its product offerings and geographical reach. However, the company must continuously address concerns such as competition, regulatory changes, security, scalability, and geographical expansion to maintain its position in the market and achieve long-term success. PhonePe's business model, focused on providing convenient and accessible financial services, is well-positioned to capitalize on the growing trend of digitalization in Canada and other countries in South Asia.
References
AJMERA, H., & BHATT, D. V. (2021). A Study on Factors Affecting Consumer Attitude and Intention Towards the Mobile Payment Applications in Gujarat.
Manish, K. P., & Sergeeva, I. G. (2022). Paradigm shift in fintech landscape: a perspective from the Canadian marketplace. Научный журнал НИУ ИТМО. Серия «Экономика и экологический менеджмент», (2), 142-151.
Pachabotla, L. S., & Konka, C. (2022). Comparative Study of Mobile Payment Apps: Google Pay and PayPal using Nielsen’s Usability Heuristics.
Rahaman, S. H. U., & Mary, S. J. (2020). Assessment of Mobile Applications and its Uses for Home Makers. International Journal of Management and Humanities, 4(10), 5-9.
Saravanan, R. (2019). Is traditional retail moving to e-commerce in the field of the fashion industry in Canada? (Doctoral dissertation, Instituto Politecnico de Leiria (Portugal)).
Singh, C. (2022). Canada's Success with the Digital Payment System. Management Journal for Advanced Research, 2(6), 6-6.
Titus, N., & Mukherjee, S. (2019). Paytm: The Lucky Lifafa Campaign. In SAGE Business Cases. Canadian Institute of Management, Ahmedabad.
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