Question

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Summarize PayPal's important strategic moves over the past few years. How can we describe these moves: first mover, disruptive innovation, footholds, blue ocean, orbricolage?

Answer 1

When PayPal launched in 1999, online card payments were still a challenge for many merchants.

PayPal’s great breakthrough was determining how individuals and businesses could more easily accept money over the web. PayPal’s founders figured out early on that it could make a decent profit in this low-margin business of processing transactions if it could encourage enough users to fund PayPal payments via bank accounts rather than financial cards.

In time, it was speed, convenience, and security that made PayPal’s online platform popular, especially among small-time sellers, Freelancers service providers,

Today Paypal is having around 155 million registered users to send money in 26 different currencies to over 200 countries and territories. Over time, PayPal has also moved into other aspects of financial services, including consumer credit, mobile card acceptance, and even card issuance.

PayPal today is in the more established role as payment incumbent, facing increased competition from younger start-ups. The entire payments landscape today is filled with innovative start-ups all are aiming to solve problems while siphoning a portion of the payment transaction fees from more established players like PayPal.

Paypal's strategic move over the past few years -

Paypal is growing with a rate of 12% over year and year.

• And the major moves are their collaboration and strategic with the leading banks and some tech giant. some examples are-Apple, Samsung Facebook, Google, and Alibaba as well as card processors like Visa (V) and Mastercard (MA). Similarly, the company is also building alliances with the big banks, including names such as Wells Fargo, JPMorgan (JPM), and Bank of America among many others. Through these alliances, PayPal is making a smaller profit on every transaction on the transactions that go through the company's partners. They are prioritizing long-term growth opportunities above short-term profit margins.
• PayPal has recently tied up with Facebook to support the payments infrastructure for Instagram shopping, which will allow users on the platform to pay in context using their PayPal account or with other financial instruments. Instagram is an entirely visual platform with plenty of potential in online shopping over the long term.
• PayPal's social payments platform, Venmo, looks like a powerful growth driver in the years ahead. Venmo's total payment volume increased 73% year over year to $21 billion last quarter, and management believes the business is on track to generating $100 billion in TVP in 2019
• PayPal has also invested $750 million in MercadoLibre (MELI), the leading e-commerce and digital payments company in Latin America. The two companies have plans to enter into a commercial agreement in order to establish initiatives to strengthen their networks, and this alliance with MercadoLibre will accelerate PayPal's growth in Latin America while providing plenty of opportunities to generate expanding cross-border volumes in the future.

Concluding the summary abve this can be said that The Paypal was the first mover because

When PayPal launched in 1999, online card payments were still a challenge for many merchants.PayPal’s great breakthrough was determining how individuals and businesses could more easily accept money over the web. PayPal’s founders figured out early on that it could make a decent profit in this low-margin business of processing transactions if it could encourage enough users to fund PayPal payments via bank accounts rather than financial cards in this way this strategy as a first-mover proves ti be very helpful for the Paypal.

disruptive Innovation-disrupting the competitor's alliance was a solid move from PayPal.

disruptive innovation happens when the produced quality or service is superior that they threaten to the existence of traditional approaches

they do present a disruptive innovation to traditional banks' incumbent services.

By offering an extremely convenient, fast, and cheap method of payment they have been able to take transactional business away from banks. 42% of Europeans preferred PayPal as their method of online payment, more than any other service.

Increased security and convenience are the reasons. This presents a massive disruption for traditional business banks in the mobile payments market. PayPal offers mobile phone applications, mobile wallet services, and one-click payment options, all of which put it in direct competition with mobile payment options offered by banks

.In many ways PayPal, and similar services can be seen as the disruptive innovation that made the advancement of card methods and mobile pay a necessity for banks.

By utilizing the connectivity of the internet and networks, PayPal innovated in a way that forced businesses and banks to adapt to the new era of convenience demanded by consumers.

Footholds can be described as a tactical or strategic move in which a Paypal purposefully establishes a small position in a market — by branching out into an untapped geographic area.

From the foothold, firms can attack (by acquiring a smaller firm, launching a promotional campaign, or simply opening more branches, for instance), withdraw (by stopping the sale of products or services in the market), or maintain a wait-and-see approach.

Paypal's alliance with the Tech giant and major bank across the world was a "Foothold" move from the Paypal.

Establishing a small position in a new market can give firms the ability to affect the behavior of their rivals and gain a competitive advantage that isn’t always about aggressive expansion

Building these alliances means that Paypal was making a small amount of small amount of profit on each and every transaction.

in this way Paypal made its worldwide presence by alliance to the tech giant and major banks of the world.

Blue Ocean move by Paypal-Blue Ocean challenges companies to push the boundaries of their industries. Blue Ocean challenges companies to push the boundaries of their industries and offer consumers something unique of immense value. By defining and seeing examples of the Blue Ocean Strategy

For PayPal, it is not just about the shift from the leather wallet to the digital wallet on a mobile phone. In many cases, it is about no wallet at all.

For PayPal, mobile payments or payments on the move are often not about the ability of the mobile phone to conduct a payment, but about the ability for consumers to make payments without having to rely on cash or plastic cards while mobile themselves.

One of the examples of Blue Ocean strategy is the referral program of Paypal.

Initially, they used to give $20 on the referral of sign up, which is new custome will get $10 on their signup and the existing customers will get $10.in this way, PayPal started giving $20 for each new customer.

By running the referral prorame they were pushing the boundaries of their industry.

This strategy has proven to be very helpful for PayPal and they recorded increased massive growth and numer of the customer.

Later they reduced their referral amount to $10 and then to $5

but they keep on giving merchant referral but later on, they stop giving that also, because they achieved the target, as and when they were achieving the targets, referral was getting reduce.

Orbicolage- a concept that is borrowed from the arts and that, like blue ocean strategy, stresses moves that create new markets. Bricolage means using whatever materials and resources happen to be available as the inputs into a creative process.

As they PayPal effectively utilized their resources as the inputs of their growth

Alliance with the major companies, Innovation in the business model as per the innovation in technology

For Example, On September 1, 2015, PayPal launched its peer-to-peer payment platform "PayPal.Me",

a service that allows users to send a custom link to request funds via text, email, or other messaging platforms.^[ Custom links are set to be structured as PayPal.me/username/amount requested. PayPal.Me was launched in 18 countries including United States, United Kingdom, Germany, Australia, Canada, Russia, Turkey, France, Italy, Spain, Poland, Sweden, Belgium, Norway, Denmark, Netherlands, Austria, and Switzerland.PayPal had 170 million users, as of September 2015, and the focus of PayPal.Me was to create a mobile-first user experience that enables faster payment sharing than PayPal's traditional tools

In addition, it was announced in October 2018 that PayPal would be the official jersey sponsor for the Phoenix Suns.

On March 2019, PayPal announced their partnership with Instagram as part of the company's new checkout feature, "Checkout on Instagram"

Cincluding all the above strategies it can be said that PayPal used innovative and growing techniques to sustain and grow in the market.

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