STRATEGY ESSAY 5 5 0 0 STRATEGY ESSAY Name of the University Author Name of the Student Name of the University

0 Running head: STRATEGY ESSAY
Strategy Essay
Name of the student
Name of the University
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STRATEGY ESSAY
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................9
Question 3......................................................................................................................................11
Question 4......................................................................................................................................12

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STRATEGY ESSAY
Question 1
PayPal is an online payment systems provider, considered an e-commerce business
allowing payments and money transfers that are carried out over the internet. PayPal acts as an
electronic substitute of traditional paper payment methods like money and cheque orders. This
service permits members of sending money with no sharing of financial information, along with
the flexibility of paying using their bank account balances, credit cards, bank accounts or any
promotional financing. It is also an example of payment intermediary service that assists global
e-commerce. It is an eBay subsidiary company and is built from the mending of three major
online payment services: the Payflow Gateway, PayPal global payment service and Bill Me
Later. The company has an open payment platform called PayPal X, which permits developers in
building innovative payment applications on several platforms and devices.
To understand the macro environment of the company, PESTEL analysis is conducted.
PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal factors
that have an influence on the macro environment of any company. In this case, macro
environment analysis of PayPal would be carried out. Changes in these factors of the macro
environment of PayPal have the capacity of directly influencing PayPal and even the other
market players in the credit services. The macro environment elements also have the capacity of
influencing the Porter’s Five Forces of the industry that mold the strategy and competitive
landscape. These can influence the competitive advantage of PayPal or the overall profit levels
of the financial industry.
Macro Environment Analysis
PESTEL Analysis
Factors Explanation

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STRATEGY ESSAY
Political These factors have a significant role in deciding the factors that have the
capacity of influencing PayPal’s long-term profit levels within a specific
country or market.
PayPal operates in multiple countries in the credit service industry and
exposes themselves to different political environmental and system risks.
PayPal has been able to achieve success in the dynamic credit service
industry across the nations for diversifying the systematic risks of the
political environment.
 Political stability, importance of credit services sector
 Favored trading partnerships
 Tax rates and incentives
 Mandatory employee rewards and benefits
 Industrial safety regulations
 Product labeling
 Protection of intellectual property
 Risk of military raid
 Corruption levels, especially in regulation levels
 Interference and bureaucracy
 Legal structure implemented for contract enforcement
 Trade regulations and tariffs
 Anti-trust laws
 Pricing regulations
 Minimum wage and overtime
 Work week regulations
Economic Macro environmental factors for example – inflation rate, savings rate,
interest rate, foreign exchange rate and economic cycle regulate the
collective demand and collective investment in an economy. While micro
environment factors, for instance, contention principles influence the
competitive advantage of the firm. PayPal can use country's economic
factor, for instance, improvement rate, swelling and industry's economic