MBA634 Strategic Management
The company name is “MatchMove”, which is a Singapore company. I have completed the following projects: (I will provide the content of these projects) Please refer to “MBA 634 Case Analysis.docx” for experts
I. General Environment
MatchMove has become one of the world’s fastest-growing Fintech companies in digital payments and next-generation banking. MatchMove provides a wallet-as-a-service platform that helps consumer and business transactions across many countries in Southeast Asia. Currently, MatchMove operates in Indonesia, Malaysia, the Philippines, and Vietnam. This year, MatchMove received $100 million from the United States IT provider Nityo. MatchMove now wants to explore options for expanding its presence into additional markets.
Below is a general environment analysis of the Fintech industry:
A. Technology Trends That Impact MatchMove
Technology is a significant factor in the Fintech industry. Banking apps are steadily replacing the traditional brick-and-mortar branches. These applications are being implemented successfully through the use of smartphones.
i. The people that utilize Matchmove’s apps and services will need to be in countries that provide reliable Internet speeds, telecommunication infrastructure, online services, and access to national cyber-security systems. Since banking applications handle sensitive information, such as personal finances, they need to be utilized only in areas with solid protection against hackers and other cyber threats.
ii. Research and development are of utmost importance for Fintech companies. When a firm is in an industry that relies heavily on technology, a substantial R&D budget is required. According to the Silicon Valley Review article, MatchMove plans to move along with technology as it gets invented.
iii. The COVID-19 pandemic has accelerated the use of digital technologies. Due to the pandemic, people have turned to connect digitally. For this reason, there has been a rise in using Fintech applications and systems versus going in-person to brick-and-mortar stores.
B. Demographic Trends That Impact MatchMove
According to the Frost publication, demographics play an important role in who uses Fintech applications.
i. Like most technologically advanced products, younger people are likely to adopt and trust Fintech services. The Frost publication expresses that 48% of Fintech users are between the ages of 25 and 34. Only 9% of Fintech users are over the age of 75. Countries, such as India and South Africa, have a higher percentage of younger people who tend to utilize Fintech services more.
ii. For the Fintech industry to thrive, companies like MatchMove, need to find places where the people trust technology. This trend goes hand-in-hand with item II-A since younger populations have an easier time trusting new technologies versus older populations.
iii. According to the Global X Team article, Fintech is thriving in emerging markets and highly populated areas. Since emerging markets’ middle classes are growing, there is more of a need for financial services. MatchMove has a great chance of gaining a competitive advantage if they figure out a way to capture an unmet demand in these countries.
C. Economic Trends That Impact MatchMove
Despite COVID-19 creating a weak and uncertain global economy, the Fintech industry continues to boom.
i. According to the Yahoo Finance article, the Global Fintech market is valued at $7,301.78 Billion and is expected to rise by a compound annual growth rate of 26.87% by CY 2026. This growth is an attribute to the fact that there is an increase in popularity for digital payments and investments in technology-based solutions.
ii. The Euromoney article predicts that Fintech may increase the GDP of emerging economies by up to 6% by 2025.
iii. Inflation rates affect the Fintech industry. According to the Fintech Review, a 2% inflation rate is an ideal rate for the common industry. With inflation being inevitable, firms in the Fintech industry can help limit the effects of inflation by providing their customers with proper financial education and practicing proper forecasting techniques.
D. Political/Legal Trends That Impact MatchMove
For a Fintech firm to survive, a particular political and legal atmosphere needs to be present.
i. According to the Frost publication, countries with strong and respected laws, a higher quality of regulation, control on corruption, and ease of entry tend to use Fintech more frequently. Since technology plays such a substantial role in this Fintech industry, firms will do well in places that protect intellectual property rights.
ii. Although laws and regulations need to be upheld and respected, a low amount of regulation is ideal for firms in the Fintech industry. According to the Global X Team article, Fintech does well in countries that have less government regulation, support innovations and entrepreneurship, and infrastructure development.
iii. Due to the COVID-19 pandemic, countries have deployed several levels of COVID-19 policies. In places where these policies were more strict and caused lower in-person interaction saw rises in the utilization of Fintech services.
E. Sociocultural Trends That Impact MatchMove
In today’s day and age, changes in society are occurring at a fast pace with the vast improvements in technology.
i. Companies that pursue Fintech will have to continuously find ways to innovate and improve to maintain a competitive advantage. MatchMove ended up in the Fintech industry through innovation. According to the Silicon Valley Review article, when MatchMove was an entertainment company, customers had trouble paying online since a good portion of them did not have credit cards or bank accounts. MatchMove then developed an end-to-end payment solution for people and businesses that want to spend, send, or lend money. This kind of innovative thinking is necessary for companies that want to survive in the Fintech industry. Since technology diffuses so rapidly in today’s day and age, MatchMove will need to continue finding Blue Oceans for continued success.
ii. Countries with excellent quality of life and low cost of living tend to be great environments for Fintech businesses.
iii. In the state of Georgia, the Fintech industry runs rampant. Georgia has a center for Innovation for Information Technology. This institute works with a university system and the government to help Fintech companies stay competitive. MatchMove should find places that offer these kinds of available resources that can provide the human talent needed to have a successful Fintech firm.
F. Global Trends That Impact MatchMove
Globalization plays a significant role in the use of Fintech applications.
i. Fintech eases the processes and risks associated with cross-border transactions. Cross-border transactions have decreased since the Global Financial Crisis in 2008. Competitors in the Fintech industry have an opportunity to capitalize on potentially reversing this trend.
ii. Financial services are becoming more prevalent on a global level versus a local one. According to the Kroll article, Fintech firms need to have a global mindset and pursue expansions into new countries and markets.
iii. According to the Vergara article, the Fintech industry has a key role in battling climate change and global warming. Since Fintech firms are involved in supporting firms, consumers, and investors in managing their financial activities, they need to promote the use of funds for environmental projects to help take care of such an important global cause.
II. Industry Environment
A. Industry Definition
The Financial Technology “Fintech” industry is a rapidly changing and growing sector of the financial-economic group. However, the industry as a whole is not new. Fintech companies date back to the introduction of credit cards in the 1950s (Builtin 2018). According to Forbes Advisor, fintech is a catch-all term for any technology used to augment, streamline, digitize or disrupt traditional financial services. More specifically, the industry is composed of software and application companies catering to consumers and business customers to deliver financial services more efficiently. As consumers have gradually accepted and embraced their financial information online, fintech companies have expanded massively to include person-to-person payments, online bookkeeping, lending, and investments. Perhaps the most prominent and currently controversial sector of fintech is the development and exchange of crypto-currencies.
B. Dominant Economic Characteristics
The Deloitte Center for Financial Services estimates overall wealth in the United States to equal over $140 trillion by 2030, and $64 trillion will be in investable financial assets (Delloitte 2015). Globally, overall investable assets are well over $250 trillion (Institutional Investor 2021). The majority of these assets are found in traditional financial institutions and banks. However, traditional financial institutions face much red tape as they attempt to innovate. This red tape leaves many investable assets not invested nor utilized. The lack of innovation is due to tight rules and regulations with a conservative design to protect all parties involved in the financial transaction.
This phenomenon is both an economic and political characteristic in the fintech industry. As fintech companies have expanded, the need for security has increased at an astounding rate. This also includes the need for public policy to regulate the companies like how banks and investments are regulated.
Interest rates and exchange rates also significantly affect fintech companies. According to American Banker, fintech companies have found ways to beat paying high exchange rates by using blockchain to allow currencies to flow from country to country more freely and increase overall investment use and payoff. This increases the wealth for the fintech companies, individuals, and businesses. MatchMove takes full advantage of these options. MatchMove’s financial success proves there is value in the convenience and demand for the movement of digital currency.
C. Five Forces Of Competition
i. The threats posed by new entrants into the fintech industry exist but are not high. Though the industry began in the 1950s, increased digital demand and economic transformation leave a large portion of the industry with untapped potential and profits. The barriers to entry are relatively low as physical infrastructure is not required. However, the requirement for technological intelligence offsets this advantage. The retaliation expected from current fintech companies is high since regulations are not firmly set. For this reason, competitors duplicate products and services with ease. Since fintech companies, including MatchMove, do not provide a physical product duplication runs rampant. The overall threat of new entrants is lower due to the high cost of research and development in an ever-changing industry.
ii. The bargaining power of software suppliers is high between fintech companies because of the large number of capital investors and which leads to higher negotiating power for higher prices. Due to the highly innovative products and services, there are also not suitable substitutes that allow for high supplier power.
iii. The bargaining power of buyers in many fintech companies is low for the same reasons listed above for the bargaining power of suppliers. However, MatchMove has an opportunity to increase its bargaining power as a buyer by developing a loyal customer base and proving high profits over a long period. The latter is difficult to achieve at this time but is obtainable by constant improvement and innovation.
iv. The threat of product substitutes is high due to the lack of customer cost between switching companies in the fintech industry. For MatchMove, there are several platforms capable of transferring digital currency. This is why the company must be proactive in its product offerings and fee schedules while maintaining its promise to be safe and legal. Fintech companies must cultivate a high level of financial trust from their customers, which will alleviate a portion of this threat.
v. The intensity of rivalry among competitors in the fintech industry is increasing but has not reached a level that traditional banks face. Traditional banks provide the same products with a slight differentiation. However, as regulations increase and limitations come about, the competition is expected to increase.
D. Forces Of Change
Demographic forces faced by MatchMove and fintech industries are prominently the age ranges of their customers. Due to financial trust and security in the intangible, younger demographics tend to play a large demand role for these products and services. Social forces include customer service expectations and trends, which are now requirements. This movement requires MatchMove to share values with their customers, whether these values are charitable contributions, environmental concerns, or simply value-based products. Political forces are evolving but extremely high in fintech as the economic and government regulations are still underway.
This force will be the strongest of the five to create lasting change, and hopefully, this will increase consumer protection and therefore increase the demographic that fintech companies reach. The force of technology change is currently the largest force due to the nature of the fintech industry. MatchMove and other fintech companies have a unique position to set the pace and tone for all innovative technology in the financial sector. This is a huge asset that is rare once an industry’s foundation is completely firm. The economic factors facing fintech include interest and inflation rates and the overall benefits outweighing traditional financial companies. Fintech is still a new industry and though MatchMove is a leader, many hesitations still exist and the opportunity cost for choosing to work with fintech companies instead of traditional cannot be higher due to the lack of history and customer confidence.
E. Key Survival Factors
I. Maintain A Robust Security Framework
1. One of the most important factors for a FinTech firm to consider about its survival is security. The firm must develop a set of robust security mechanisms within the framework of its infrastructure. Innovative product offerings mean very little if a security breach can jeopardize a customer’s data and money. The infrastructure must not only exist but it must also be kept up-to-date at all times. Companies like Equifax have seen firsthand the potential damage it can suffer if protocols are not continuously updated.
Ii. Target Underserved Groups
1. One factor in successfully operating a FinTech business is the growth of its brand. It is difficult to disrupt the modern banking industry, especially in developed countries. However, these established banking institutions have neglected a large portion of the market by focusing on commercial and investment banking (Wiwanto, 2020). A FinTech firm could create a loyal following by focusing on the underserved retail and small business banking sectors.
Iii. Utilize A Focused Strategy
1. Many successful FinTech companies do not try to be a one-stop-shop for every conceivable financial need. They tend to focus on becoming proficient at performing a smaller set of services and any proprietary technology that they have developed along the way (Wiwanto,2020). MatchMove has the technology and the goals in place, it just needs to execute on a global stage. And, in the process, MatchMove must make sure to not lose sight of the customers and their needs.
F. Industry Attractiveness
I. The Business Of Young Customers
1. As mentioned in an earlier section, the average age of FinTech customers is relatively low. Financial mobile application data shows that more than 80% of users are aged 54 or younger (Statista, 2019). Generation X, Millennials, and Generation Z compose around 62% of the United States population as of 2020 (Statista, 2020). Coupled with the statistics offered by Frost—48% of Fintech users are between 25-34 years of age—these numbers show there is an incredible opportunity for FinTech companies to connect with a large percentage of the population.
Ii. Projected Growth
1. The FinTech Industry is expected to explode with growth over the next decade. Research and Markets have published a report in which it forecasts a compound annual growth rate of greater than 20% over the next five years for the FinTech industry (Research and Markets, 2020). Firms that invest in the industry now will reap the rewards in the coming decade.
III. Competitor Environment
Competitor # 1: NIUM Pte. Ltd.
A. Future Objectives
i. To simplify payment experiences for consumers and businesses around the world without financial constraints
ii. To build a platform that delivers simplicity, scale, and speed in the following:
1. Financial Institutions: to build the optimal customer experience by facilitating better exchange rates and faster delivery
2. Fintech: to build onto NIUM’s global financial service platform to facilitate easy access to payments, accounts, and cards
3. Marketplace and Gig Economy: to create the best global payment platform which allows the delivery of payments to bank accounts, cards, and e-wallets globally through one API (Application Programming Interface)
4. Travel and Logistics: to simplify payment operations, reduce cost and maximize margins in international businesses
iii. To invest in building out its payment infrastructure and current capabilities
iv. To explore opportunities to acquire new technologies and companies (Cricket)
i. The B2B market aims to implement cross-border payment services
ii. The focus is on global market opportunities in embedded fintech, cross-border transfers, and card payments
iii.NIUM’s platform connects businesses to the world’s payment infrastructure through one API
iv. NIUM’s modular platform (Pay In, Pay Out, and Card-Issuance) allows banks, payment providers, travel companies, and other businesses to collect and disburse funds in local currencies to over 100 countries
v. Physical and virtual cards are issued globally
vi.Resources and energy are focused on strengthening its core business lines and selectively diversifying its use-cases
vii. NIUM is actively stepping back on some of its “blue sky” initiatives
i. The areas of fintech, cross-border transfers, and card payments are projecting to expand rapidly in the next few years with an estimated total market in the trillions (dollars)
i. A unique internal culture of openness, respect, high ambition, and creativity is prevalent
ii. NIUM has an extensive portfolio of licenses in over 40 different markets
iii. NIUM has a unique combination of regulatory and tech assets
iv. Banking-as-a-Service capabilities (BaaS) facilitate the build, deployment, and embedding of banking solutions
Competitor # 2: VOLOPAY
A. Future Objectives
i. To help businesses take control of business spending
ii. To organize financial transactions for better visibility and savings
iii. To unify all business payments, approvals, accounting automation, and expense reimbursements into one offering
iv. Objectives in Volopay’s six areas of expertise are summarized as follows:
1. Expense Management: to digitalize and automate business financial processes
2. Business Account: to remove the need to have multiple bank accounts, credit cards, expense software, and money transfer accounts
3. Subscription Management: to get insights on subscription spends and control all subscriptions easily
4. Business Credit: to establish an easy credit line for day-to-day business expenses with no hassles
5. Invoice Management: to create a management platform that companies use to make invoice payments to suppliers within and across borders
6. Corporate Travel: to tie in payments, expenses, and reconciliation solutions via an intuitive end-to-end corporate travel booking platform
b. Current Strategies
i. Physical and virtual multi-currency corporate cards are issued
ii. Corporate cards facilitate total transaction visibility and decentralized control
iii. Spending rules are set for each card while simultaneously earning 2% cashback
iv. Low-rate money transfers are offered in more than 130 countries
v. Early pay discounts with cashback rewards from suppliers are offered
vi. Fixed-free pricing structures inform customers of how much they owe in advance
vii. The integration of multiple services on one platform gives a competitive edge
viii. Partnerships with WeWorks in Australia and NIUM add to capabilities
i. Controlling payments and access to funds will help grow organizations
i. A customer-driven culture is key with every customer interaction
ii. Encourages collaborations among employees of different backgrounds and skill-sets
iii. Upholds transparency inside the team through empowerment and education opportunities
iv. Employees are encouraged to take ownership and push beyond the limits
v. Offers real-time AI management software in which allows for easy transactions
IV. Internal Organization
c. Core Competencies
d. Value Chain
f. Strategic Vision
g. Strategic Mission
h. Key Result Areas
V. SWOT Summary
d. Threats In addition,
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