- 1 About MasterCard
- 2 Quick Stats About MasterCard
- 3 Strength In The SWOT Analysis of Mastercard
- 4 Weaknesses In The SWOT Analysis of Mastercard
- 5 Opportunities In The SWOT Analysis of Mastercard :
- 6 Threats In The SWOT Analysis of Mastercard :
- 7 Limitations of SWOT Analysis for MasterCard
- 8 Weighted SWOT Analysis of MasterCard
- 9 Weighted SWOT Analysis of Mastercard Template, Example
SWOT analysis by MasterCard examines the brand’s strengths, weaknesses, opportunities, and threats by its strengths weak points, weaknesses, opportunities, and threats.
In the analysis of MasterCard SWOT Analysis, the strengths and weaknesses are internal variables, while the opportunities, as well as threats, comprise external aspects.
SWOT Analysis is a tried and tested management system that allows an organization such as MasterCard to evaluate it’s business and performance when compared with its competitors.
MasterCard is among the most prominent brands in the banking and financial services industry.
The table below provides the MasterCard SWOT (Strengths Strengths, Weaknesses Opportunities threats) and the most prominent MasterCard competitors, as well as the market it is targeting, segmentation and positioning, as well as the unique selling proposition.
MasterCard has become a leading financial service sector, providing effective services that include a variety of features.
With its simplistic and striking colors, it is quickly identifiable and simple to remember.
MasterCard began to be introduced in the latter half of the 1940s when certain U.S. banks were pulling out and distributing paperwork to customers, which was then used as cash in local shops.
The company was officially established in the year 1966 as the Interbank Card Association (ICA).
The group was created due to 17 bankers wanted to obtain replicas of their credit cards.
This is why the ICA was not governed by one bank but was controlled by InterBank and MasterCard The InterBank card was renamed MasterCharge in the year 1968.
|Founder||Wells Fargo, Crocker National Bank, First Interstate Bancorp, Bank of California|
|Origin||New York, USA|
|No. of Employees||21000 (2020)|
|Market Cap||The US $ 352 Billion (2021)|
|Annual Revenue||The US $ 15.3 Billion (2020)|
|Net Income/ Profit||The US $ 6.41 Billion (2020)|
Strength In The SWOT Analysis of Mastercard
- Wide Presence MasterCard is present in more than 210 nations worldwide, and deals in 150 currencies and 53 languages. It has 2.2 billion customers in 36.5 million locations across the globe.
- Secure and safe whether it’s Mastercard Identity Check or a set of technology-based solutions that authenticate the identity of a person’s biometrics Decision Intelligence is a range of security tools that utilizes machine learning to provide information on transactions that are happening in real-time to increase approvals and minimize false declines. It also allows for the migration to EMV (the worldwide technology for chips technology); Mastercard has been the leader in terms of safety and security.
Weaknesses In The SWOT Analysis of Mastercard
- Four-Party Systems: Mastercard operates in the four-party payment network system as shown in the diagram below however other companies such as American Express, Discover, and other payment systems are an external third-party system with which they have a direct relationship with the company to consumers and merchants.
Three-party payment systems assist in providing better control over the merchant and consumer client service than four-party payment systems.
- Lawsuits: Since the financial industry is extremely regulated throughout the world, a variety of legal and regulatory cases, as well as investigations by central authorities, are impacting Mastercard’s business as well as its activities of Mastercard.
Opportunities In The SWOT Analysis of Mastercard :
- The emerging markets: Developing nations will remain growing economies in the field of digital payment and transactions. According to the report of World’s payments, 2017 the huge increase in electronic payments has been driven by rising Asian nations.
- Collaborative partnerships with Fintech companies: Although fin-tech firms are the biggest threat to Mastercard due to the rise of new Fin-tech companies, Mastercard can work in partnership with these businesses in order to control the marketplace.
- Non-Cash Transactions: The volume of non-cash transactions is growing because of the use of alternative payment methods/alternative distribution channels (ADC) and the rise in financial literacy and the Government’s shift to digital payment and better infrastructure for payments are a few factors that will be instrumental in the development of the business.
Threats In The SWOT Analysis of Mastercard :
- The rise of Fin-tech Companies: Fin-tech firms are playing crucial roles to shape their role in shaping the business model of the payments industry and digital transactions. They are the newest entrants that develop alternative payment methods such as e-commerce wallets, payments systems, and mobile devices’ payment systems that work via the internet. Due to their lower cost, offer an advantage over the likes of Mastercard.
- Industry competition: The payment industry all over the world is highly competitive. globally. Visa, American Express, Union Pay, Rupay, Paypal, and many more have been battling head-to-head with Mastercard which results in a loss of shares in the market and decreasing margins.
- Competitors’ competencies in regional markets: Competitor’s operations & performance in specific regions and jurisdictions, such as the ones from Visa across Visa in the United States & Europe, Rupay in India, and so on. is what is assisting these businesses in creating larger volumes, more scalable operations as well as profit in these areas and is causing bottlenecks to the growth of Mastercard.
- Regulations of the government: Regulatory scrutiny, evolving government regulations regarding the industry of digital payments, and the tightening of the payment system are what are affecting the industry by and vast.
- Cyber attacks and hacking: Cyberattacks & data breaches in banks are fairly widespread and cybercriminals find it simple to gain access to crucial information about customers, which makes customers nervous to sign up for online platforms to conduct business, particularly in developing economies where the level of awareness is not as high as the developed countries’ consumers.
Limitations of SWOT Analysis for MasterCard
While SWOT analysis is a popular tool for strategic planning, SWOT analysis is used widely as a tool for strategic planning however, it does have its fair share of drawbacks.
- Certain abilities or aspects of an organization could be both strengths and weak points at the same. This is among the most important limitations that SWOT analysis has. For instance, changing environmental regulations could be an issue for the company but however, but it could also be an opportunity in the sense that it can allow companies to be on the same level or gain an advantage over their competitors when it could develop its product more quickly than its competitors.
- SWOT doesn’t provide a way to gain competitive advantages It is not a strategy to gain competitive advantage, therefore it should not be considered a solution in and of itself.
- The matrix serves as an idea to begin an analysis of how the proposed strategies might be implemented. It also provided an evaluation window but did not provide an implementation plan that is based on strategic competitiveness. MasterCard
- The SWOT model is a static evaluation and analysis of the existing conditions and a small number of potential modifications. As the environment, circumstances, as well as threats, and strategies, alter, the dynamic of the competition will not be apparent in a single table.
- SWOT analysis could cause a company to focus too much on one external or internal element in formulating strategies. There are interrelations among the most important external and internal aspects that SWOT doesn’t reveal, which can be vital in formulating strategies.
Weighted SWOT Analysis of MasterCard
Given the above-identified shortcomings of the SWOT analysis/ matrix, the management of the corporate determined to give the weightage to each of the strengths and weaknesses of the business.
They also consider the likeliness of events that will occur in the near future, and the impact they can be on the performance of the company.
This is referred to as weighted SWOT analysis. It’s superior to basic SWOT analysis since using weighted SWOT Analysis MasterCard, managers can focus on the most crucial aspects and eliminate the less important ones.
It also eliminates the problem of a long list that causes organizations to make an extensive list, but none is considered to be important.
References Books on Mastercard SWOT Analysis
Mastercard (2018), “Mastercard Annual Report”, Published in 2018.
Euromonitor (2018), “Financial Sector Analysis “, Published in 2018.
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
L. Wrigley, Divisional Autonomy and Diversification (Ph.D., Harvard Business School, 1970)
M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)
Weighted SWOT Analysis of Mastercard Template, Example
The factors listed in the Strengths, Weakness Opportunities, and Threats quadrants of the SWOT analysis are equally important.
Managers at Mastercard should focus on the importance of each factor identified in the Strengths Opportunities, Weaknesses, as well as Threats quadrant.
We can determine the importance of each aspect by assigning them relative weights. The weighted SWOT analysis is a three-step process –
The first step to do the SWOT analysis weighted by Mastercard is to determine those strengths as well as weaknesses within the business.
This will allow you to determine the most significant advantages and disadvantages of the company and determine which strengths and weaknesses that are listed in the first list are minor and should be left out.
The second step in conducting an analysis of SWOT that is weighted by Mastercard is to provide probabilities to strategic external elements, thus allowing better comprehension of potential threats and opportunities that arise out of macro-environmental changes and changes.
The third step of developing the SWOT analysis weighted for Mastercard to offer strategic recommendations is to connect the likelihood of strategic external factors like threats and opportunities to internal strategic elements the strengths as well as weaknesses. Start with external factors since they provide the direction for the entire industry.
Additionally, combining probability with internal strategic factors will aid the company not just in determining strategic fit, but also to determine the most likely strategic trade-offs that Mastercard has to make in order to create a lasting competitive advantage.