MasterCard: Strategic Analysis, Challenges, and Opportunities

This report conducts a strategic analysis of MasterCard, examining its micro business environment, including the application of Porter's Five Forces to assess industry competition, the threat of new entrants, supplier power, customer power, and the threat of substitute products. The analysis highlights MasterCard's competitive advantages, such as strong brand presence, customer preference, multiple platform usage, and sports sponsorships. The report also identifies future challenges, including increasing competition and the rapid pace of technological advancements. Furthermore, it discusses opportunities for growth, such as expanding into emerging markets and leveraging digital payment solutions. The report concludes with recommendations for MasterCard to effectively address these challenges and capitalize on opportunities, ensuring continued success in the dynamic financial services industry.

Strategic analysis of a case
study/company
Table of Contents

INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Micro business environment of company...............................................................................3
Competitive advantages of Master Card................................................................................6
Future challenges and opportunities of company...................................................................7
Cope up with challenges and opportunities............................................................................8
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................10

INTRODUCTION
Strategic analysis is defined as analysing and assessing about the strategies company
has adopted to accomplish the business goals. This report is based on the case study of
Master Card Company. The organisation was established in the year 1979. Company is based
in US and engaged in catering financial services to its customers. Headquarter of the
company is located in New York, US. Company offers credit card and payment system to all
its customer base. Company serve a global base of business operations to all its customers.
Brands like Cirrus, Maestro, Mondex, Mastercard and Masterpass are such brands that are
associated with the Master Card Company. In this report strategic analysis would be
conducted. Henceforth, report will emphasis on the micro environment associated with the
company. Porter Five Forces will be conducted to analysis about the key competitors of the
company in the market. In this report competitive advantages available for the company will
also evaluate. All different future challenges company can be a part off will also project in
this report. Furthermore, possible recommendations would also give to project what are the
ways that can support the company in facing such future challenges.
MAIN BODY
Micro business environment of company
Business environment is a sum of external and internal factors of the organisation that
put an impact over the business operations of company. In order to contain te business
operations various factors that directly get involve in te business practices company has
undertaken. Factors like political, economical, social, technological, environment and legal
factors directly impact over the business of company (Borowitz and Battat, 2016). Master
Card Company is a US based company and currently company is operating its operations
across the globe. All these factors of external business environment directly affect the
company’s business. Porter Fiver Forces is another crucial model that can project about the
impacts macro environment has created over the business of company.
Porter Five Forces
Porter Five Forces is a competitive analysis model. This model involves different
forces that influence the growth and business of company. Maser Card Company is
associated with the financial sector. The industry is considered as the highly competitive
industry part of the business environment. In this model different forces that directly

influence over the business of company are analysed and assess about the involvement of
such forces in the business of company.
Competition in industry (High): Competition is huge in case of financial sector. The entire
industry is associated with huge demand of different banking and financial services. High
demand of products also attracts huge profitability for the business. Many other companies
like Discover, VISA Card, JCB, Paytm, PayPal and many other companies. All these
companies are engaged with the potential customers at high level (Formicola and et.al.,
2018). In order to achieve all different objectives of the business Master Card Company
needs to take competitive advantage against all these companies. This force is high as the
competition in the industry is really huge for the Master Card Company. Competition is
aggressive in nature in case of finance sector. Due to healthy level of market competition
company always requires to innovate and launch new services and facilities to sustain and
grow its existing customer base in market. Master Card Company is engaged in the global
base business operations so the company needs to entertain competition across the globe
efficiently in order to achieve all different objectives of business.
Potential of new entrants in industry (High): Finance sector itself caters huge level of
profitability due to immense demand in market. Every single individual in today time
requires financial services. All across the globe middle class economic class peoples are
emerging rapidly at a very high rate which also increased the demands of financial services
that involve investment, cards and many other services. Demand and profitability always
attract new investors and stakeholders to enter in the market and be a part of it (Gong and
et.al., 2020). This force is high as it can be projected that due to profitability and business
opportunities the possibility of new entrants to enter in the market is relatively high in the
sector. It can be projected that Master Card Company is among the leading brands associated
with the finance sector as the company is involved in the business operations at global level.
Due to big brand the threat of new entrant is relatively low for the company. As the big
brands always consists up effective brand value and a support base of loyal customer base in
the market.
Power of suppliers (Medium): Suppliers are the stakeholder involve in business who are
engaged in supplying company’s products at one location to another business location of
company. Suppliers play a huge involve in every business part of the business environment.
As the suppliers of company made services easily and conveniently available for the potential

customers of company. Due to involvement of suppliers of company in the business of
company it can be projected that they play a huge role for the company in delivering its
services all across the globe professionally to all its customer base (Niu, 2018). Master Card
is one of the major brand involve in finance sector all across the globe as the company carry a
business operations based at global level. In case of big brands the profitability of suppliers is
more depends upon the big brands rather the dependency of big brands over its suppliers
group. Due to big name company can easily establish its strong supply chain networks over
the night as it contains plenty of options available of suppliers in market. It can be projected
that both the stakeholders carry the specific dependency over each other but due to more
dependency of suppliers over company this force is medium for the Master Card Company.
Power of customers (High): Customers are the sole entity of business. All products and
services of the Master Card are launch and design as per the requirement of potential
customer base of company available in market. All policies and strategies of company are
framed based on the suitability of the potential customer base of company in market. It can be
stated that involvement of customers of company is extreme for every company (Odoemena,
A.T. and Horita, 2018). Customers play a crucial role in the sustainability of company in
market along with them contributes the most in the growth of the company in market. The
power of this force is huge and can be said that more than any other force in the Porter Five
Force Model. All future strategies and growth plan of company are also reflected the
requirements attached with the potential customer base of company available in market.
Threat of substitute products (High): Substitute products are defined as all such products
that can be used in exchange of the products offer by Master Card Company. Substitute
products are such products that replace the use of company’s products and services in market.
In case of finance sector the innovations is also huge in market. All companies are investing
its potential financial resources to launch new services along with developing its existing
services (Sanjeepan, 2017). In case of Master Card Company many substitute products
already a part of market that are denoted as Paytm, Google pay, Ru Pay, Phone Pay, Amazon
Pay and many other digital payment applications. All these digital payment tools have
restricted the use of all these cards for the customers all across the globe. In recent time
government has also supported the digital payment all across the globe that has also
supported the growth of these companies io market. This force is high for the Master Card
Company.

Competitive advantages of Master Card
Competitive advantages are denoted as portraying the benefits of the company’s
products in front of the target customers so that they can prefer the use of company’s
products in the market as compare to all other competitors available in market. Master Card
Company carries the different competitive advantages that can be projected in the following
points.
Customer preference to Master Card: As per the recent statistics of company’s
performance in market it is recorded that more than 23 billion transactions have recorded on
an average basis from the Master Card all across the globe. This is a huge number that shows
the brand value of company in market. Due to huge brand value of company the card of
company get prioritise in conducting payments of customers. It is important for the company
to take competitive advantages in market that how much the brand sustains customer loyalty
in market. Due to all the positive side of the company the preference of customer is attached
with the company.
Huge brand presence: Currently Master Card Company is associated with business
operations at more than 100 countries all across the globe. This is a huge number as company
gets to serve its services to billions of peoples all across the globe due to its presence in
market (Straková, 2017). Services of Master Card is available in more than 100 countries and
currently company is also working and planning to enhance its business locations by
expanding the business scale in new locations. Availability of company’s services at so many
locations allows company to establish a brand value in market. High brand presence has
supported company in talking competitive advantages in the market.
Multiple platform usage: The Master Card can be used at multiple platforms. This is among
the main aspects of company that has allowed competitive advantages in the market to brand.
Due to availability of company at global level different platforms also offer the services of
accepting Master Card as a payment method. Offering other organisations to its customers as
a payment option creates a certain level of demand of company in market. It also improves
the brand value of company in market. This is one of the significant tool that has allowed
company to take competitive advantages in the market.
Sports sponsorship: This is another key aspect involve in the business strategies of the
Master Card Company to enhance the growth in market. Company has performed a
marketing strategy by taking a sponsorship at world cup. This has enhanced the brand value

and popularity of company (Tyagi, 2019). In case of world cup likes international events
billions of peoples all across the globe gets to experience the advertisements and promotions
of company. This strategy of company has improved the brand value of company in market.
This has created a huge demand of company’s products in market. People all across the globe
get to know about the services of company. This has also improved the number of searches
over internet about the company. This branding strategy of company has delivered into
effective brand value of company in market. This is one of the most prominent strategy
company has channelized to take competitive advantages in the market.
The above mentioned points projected about different factors that have allowed
Master Card Company to take competitive advantages in the market. Competitive advantages
directly expands the growth of company in market and also it boost to company’s presence in
target market.
Future challenges and opportunities of company
Future challenges of Master Card
Challenges are always a part of business. Business environment is associated with
plenty of factors that put a role in every business operations. Due to its volatile nature
business environment serves may challenges that can be projected in following points.
Increasing competition: The finance sector is associated with immense demand. All across
the globe the middle class economic background and upper class economic background
people are emerging very rapidly. The economic growth of the society has improved the
demand of all these financial service organisation (Yakubiv and Boryshkevych, 2018). Huge
demand always attract to new companies and investors to invest and earn potential revenue in
market. All this aspects of the sector has increased the competition level in the industry. In
future also the way industry is growing demand will also increase along with it will allow so
many new companies and big brands to enter in the market. This will potential increase the
level of competition for the Master Card. Increased competition is always a huge challenge
company need to face as a part of other business challenges and issues. This might cost to
take competitive advantages for the company.
Increasing trend of digital payments: Digital payments means as payment via the digital
applications like Google Pay, Phone Pay and many other brands. All these companies have
already increased the competition for the Master Card. Even in current time the number of

users over such digital payment platforms is increasing rapidly (Yogesh, Jain and Devesh,
2016). This has reduced the market growth of company already. In future the number of users
of such digital applications would also potentially increase. This is a huge threat for the
Master Card Company to deal in future.
Data leakage: This is another key challenge Master Card Company needs to face. Leakage
of the personal information of all the user base of company is a big challenge company can
face in future. This is already a huge challenge all digital companies are facing.
The above mentioned points are projected about all key challenges Master Card
Company get to face as a part of business operations.
Opportunities of company
Company carry a strong growth opportunities in market. In future the number of users
carry the Master Card will be double in next 5 years. The economic growth all across the
globe has enhanced the market for all companies’ part of the business environment. At global
level the demand has been increased (Zaitseva and et.al., 2017). In next 5 years company has
a strong opportunity to double its user base. Company also has an opportunity to expand its
business at new business locations. Master Card Company can also launch its own digital
payment applications where all users of company get to pay without using the card. This will
enhance the market growth of company.
Cope up with challenges and opportunities
Master Card Company is already a big name in market. Company is currently a part
of more than 100 countries as a part of te business locations of organisation. Company can
improve its number of services to cut the market competition. Being a leading brand
company carry the strong base of loyal customers in market all across the globe. Company
can utilise its customer base to spread the dignity of company by channelizing a marketing
campaign at other locations (Zarchi and et.al., 2018). Company can expand its business at
more than 100 locations by introducing services of company in new market. This will allow
company to cater the customers at such locations which are currently not a part of company’s
business portfolio. Company must also launch its own digital payment applications where all
master card users can come and make payment digitally without using the card. This service
would support company in enhancing the growth of company in market. All the above

recommendations would support company in expanding its existing market share. With the
support of technology company can improve the security of personal information of all users.
CONCLUSION
This report have projected different factors involve in business environment that carry
the role in the business operations of company. Customers play a huge role for the business in
meeting up all different objectives behind the business of company in market. Among all
other forces part of Porter Five Forces customers are the one who carry the maximum number
of involvement in company business. Challenges like increasing market competition, data
leakage and other challenges company needs to face as a part of business operations.
Company also has huge growth opportunities in future.

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