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December 14, 2020 3 min read

 

 

 

 

PayPal corporate value chain

Your Name

Institutional affiliation

 


 

PayPal corporate value chain

Company Overview

PayPal is an American online company that focuses on digital payments which was established in 1998 and has experienced tremendous growth over the years with the increase in the use of the internet especially for buying goods and services. As one of the largest internet based Payment Company, the firm is also a publicly traded company. The company had had its IPO in 2002 where it becomes a subsidiary of eBay and letter part ways with eBay in 2015.

Value chain

As an online payment service provider, the company creates value by providing its clients with various services that enable them to make purchases as well as send and receive money from all over the world. According to Porter, the value chain of a company will encompass all the activities that are undertaken by the company to see to that it increases the value of the product or service being availed to the targeted customers. PayPal offers a variety of products to its customers based on their needs.

One of the ways in which the company achieves this is through offering personal accounts to individuals. In this way, different individuals from different countries are not only able to send and receive money from around the world, but also pay for goods and services purchased to through the internet. Moreover, the customers of the company are also able to like their PayPal accounts with their bank accounts or debit/credit cards. This gives them more convenience while using their PayPal accounts.

The other service that the company offers is the merchant account services. This is a service that is designed to offer businesses and companies a way to make as well as receive payment for their business activities. With the increased technological innovation over the years, there is more that businesses and individuals can be able to do online with regards to making transactions just like it is done physically, (“Inside PayPal: (Full Show 7/28)”, 2016). This is a service that assures clients of the security of their funds when they are making purchases online or sending money.

Core competencies

Ever since the company was started, it has been able to achieve tremendous growth and development that has made it become one of the leading players in the industry. One thing that is clear is that even though the company may have been among the first online payment providers, other companies have come into the market with similar products. Despite the entrance of big business into the market such as Google (with the Google Wallet) and Apple, the company has still managed to operate a viable and profitable business. This has been achieved through the constant research and development undertaken by the business that has enabled it to come up with new products and services that are aimed at satisfying the ever growing and specific customer needs, (Meier & Stormer, 2009).

The services offered by the PayPal are valuable in the sense that they give their clients the convenience they are seeking especially when making online purchases or sending money globally. Gone are the days when an individual would go through the long and cumbersome process in the bank when sending money abroad. The services are rare in the sense that the company offered a solution to online business when no one else was able to back then. Even though there are other companies that also offer the same services like that offered by PayPal, it is difficult to imitate the product as they are because of the firm has invested in a very sophisticated security system to protect its products as well as its clients. The services offered by companies such as Google and Apple cannot substitute PayPal because it has been able to develop a large customer base over the years who are also loyal to the company, (Beynon-Davies, 2013).

For the company to be able to realize the growth and success that is had over the years, it is clear that is a substantial competitive advantage over the other competitors in the market. One of the things that can be considered to have been a temporary competitive advantage for the company is the ties that it had with eBay before parting ways. eBay is a large online retail and wholesale company and as such, there were very many individuals that registered and used PayPal accounts for making purchases. These are individuals whole still using the company’s products and services even in the absence of the partnership with eBay. This is because customers had gotten used to the services and the convenience they were enjoying and as such, they would transfer such to other platforms such the mobile payment platform which is also offered by the company.

One of the major sustainable competitive advantage that the company has is that it has a large cash pool at its disposal and as such, it does not operate in any debt as a financial institution, (Suomi et al., 2007). This is a major competitive advantage for the company because it will always have the money to fund product research and development that leads to the unveiling of products and services that are more customer oriented based on their specific needs.

Environmental impact on the sustainability of the core competencies

Using the PASTEL model, we are in a better position to tell the impact of the external environment on the sustainability of the company. Political factors will affect the ability of the company to make profits in the areas with stringent regulations such as high taxation. Economic factors will affect the disposable income of the customer and as such affect their ability to buy good online. Social factors such as the change in trends will also affect purchase made by clients or the money they send. The company is not really affected by the environmental factors because its activities are not linked to the environment but online. However, taking the necessary corporate social responsibility will see to it that it gets more customers in the process. Last but not least, the company’s viability and sustainability will significantly be affected by the legal factors which govern its operations. Adhering to these laws will see to it that the firm continues to operate in the different countries in the global market and as such increasing its sustainability.


 

References

Beynon-Davies, P. (2013). eBusiness. Houndmills, Basingstoke: Palgrave Macmillan.

Inside PayPal: (Full Show 7/28). (2016). Bloomberg.com. Retrieved 2 June 2016, from http://www.bloomberg.com/news/videos/2015-07-29/inside-paypal-full-show-7-28-

Meier, A. & Stormer, H. (2009). EBusiness & eCommerce. Berlin: Springer.

Suomi, R., Cabral, R., Hampe, J., Heikkilä, A., Järveläinen, J., & Koskivaara, E. (2007). Project E-Society: Building Bricks. Boston, MA: International Federation for Information Processing.

 

 

 

 

 

PayPal corporate value chain

Your Name

Institutional affiliation

 


 

PayPal corporate value chain

Company Overview

PayPal is an American online company that focuses on digital payments which were established in 1998 and has experienced tremendous growth over the years with the increase in the use of the internet especially for buying goods and services. As one of the largest internet based payment company, the firm is also a publicly traded company. The company had had its IPO in 2002 where it become a subsidiary of eBay and letter part ways with eBay in 2015.

Value chain

As an online payment service provider, the company creates value by providing its clients with various services that enable them to make purchases as well as send and receive money from all over the world. According to Porter, the value chain of a company will encompass all the activities that are undertaken by the company to see to that it increases the value of the product or service being availed to the targeted customers. PayPal offers a variety of products to its customers based on their needs. The company adds value to its services by providing various accounts and products based on the need of the customers such as personal accounts and merchant accounts. The chain has been effective for the company and such there is need to add more value to create more opportunities for the company, (Bolstorff & Rosenbaum, 2007).

 

 

 

 

 

 

 

 

Core competencies

Ever since the company was started, it has been able to achieve tremendous growth and development that has made it become one of the leading players in the industry. One thing that is clear is that even though the company may have been among the first online payment providers, other companies have come into the market with similar products. Despite the entrance of big business into the market such as Google (with the Google Wallet) and Apple, the company has still managed to operate a viable and profitable business. This has been achieved through the constant research and development undertaken by the business that has enabled it to come up with new products and services that are aimed at satisfying the ever growing and specific customer needs, (Meier & Stormer, 2009).

The services offered by the PayPal are valuable in the sense that they give their clients the convenience they are seeking especially when making online purchases or sending money globally. Gone are the days when an individual would go through the long and cumbersome process in the bank when sending money abroad. The services are rare in the sense that the company offered a solution to online business when no one else was able to back then. Even though there are other companies that also offer the same services like that offered by PayPal, it is difficult to imitate the product as they are because of the firm has invested in a very sophisticated security system to protect its products as well as its clients. The services offered by companies such as Google and Apple cannot substitute PayPal because it has been able to develop a large customer base over the years who are also loyal to the company, (Beynon-Davies, 2013).

 

For the company to be able to realize the growth and success that is had over the years, it is clear that is a substantial competitive advantage over the other competitors in the market. One of the things that can be considered to have been a temporary competitive advantage for the company is the ties that it had with eBay before parting ways. eBay is a large online retail and wholesale company and as such, there were very many individuals that registered and used PayPal accounts for making purchases. These are individuals whole still using the company’s products and services even in the absence of the partnership with eBay. This is because customers had gotten used to the services and the convenience they were enjoying and as such, they would transfer such to other platforms such the mobile payment platform which is also offered by the company, (Currie, 2004).

One of the major sustainable competitive advantage that the company has is that it has a large cash pool at its disposal and as such, it does not operate in any debt as a financial institution, (Suomi et al., 2007). This is a major competitive advantage for the company because it will always have the money to fund product research and development that leads to the unveiling of products and services that are more customer oriented based on their specific needs.

Environmental impact on the sustainability of the core competencies

Using the PESTEL model, we are in a better position to tell the impact of the external environment on the sustainability of the company. Political factors will affect the ability of the company to make profits in the areas with stringent regulations such as high taxation. Economic factors will affect the disposable income of the customer and as such affect their ability to buy good online. Social factors such as the change in trends will also affect purchase made by clients or the money they send. The company is not affected by the environmental factors because its activities are not linked to the environment but online. However, taking the necessary corporate social responsibility will see to it that it gets more customers in the process, (Miller, 2012). The technology landscape changes very fast and as such the company needs to ensure that it stays ahead of the rest when it comes to dealing with issues of technology. As an online based company, PayPal is committed to using the latest and advanced technology that will ensure t customers the security of the money while undertaking their transactions using PayPal platforms.  The company also invests in product development and research, and this has played a major role in ensuring that it provides specific technological solutions to the financial needs of its customers, (Bowhill, 2008). Last but not least, the company’s viability and sustainability will significantly be affected by the legal factors which govern its operations. Adhering to these laws will see to it that the firm continues to operate in the different countries in the global market and as such increasing its sustainability.


References

Beynon-Davies, P. (2013). eBusiness. Houndmills, Basingstoke: Palgrave Macmillan.

Inside PayPal: (Full Show 7/28). (2016). Bloomberg.com. Retrieved 2 June 2016, from http://www.bloomberg.com/news/videos/2015-07-29/inside-paypal-full-show-7-28-

Bowhill, B. (2008). Business planning and control. Hoboken, NJ [etc.]: Wiley.

Bolstorff, P. & Rosenbaum, R. (2007). Supply chain excellence. New York: AMACOM.

Currie, W. (2004). Value creation from e-business models. Amsterdam: Elsevier Butterworth Heinemann.Meier, A. & Stormer, H. (2009). EBusiness & eCommerce. Berlin: Springer.

Flower, G., Fawcett, P., & Harle, S. (2012). Banking: In search of relevance: a new model for a new reality. Kibworth Beauchamp: Matador.

Miller, M. (2012). The PayPal Official insider guide to growing your business. Berkeley, CA: Peachpit.

Suomi, R., Cabral, R., Hampe, J., Heikkilä, A., Järveläinen, J., & Koskivaara, E. (2007). Project E-Society: Building Bricks. Boston, MA: International Federation for Information Processing.

 

 

 

 

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