Analyzing Stripe's Business Model and Market Strategies: A Case Study

This case study analysis focuses on Stripe, a business that facilitates online financial transactions. It examines the company's inception, its role in solving payment processing issues for e-commerce businesses, and its growth strategies. The assignment identifies key problems such as managing transaction volumes, compatibility issues, and security concerns. It delves into the application of management theories like scientific management and bureaucratic management to address these challenges. The analysis further explores the role of business consultants in linking functional areas, particularly in sales, marketing, and financial protocols. The paper highlights the importance of consultants in handling issues like interchange fees, API complexities, and tax regulations, ultimately aiming to increase Stripe's market reach and competitiveness.

Running head: HELPING MONEY MOVE ON THE INTERNET
Helping Money Move on the Internet
Name of the Student
Name of the University
Author Note:

1HELPING MONEY MOVE ON THE
INTERNET
Table of Contents
Introduction......................................................................................................................................3
Identification of the problem in the case.........................................................................................3
Analysis of key issue.......................................................................................................................5
Role of the business consultant linking with the functional areas...................................................6
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9

2HELPING MONEY MOVE ON THE
INTERNET
Introduction
The foremost determination of the paper is to focus on a business consultancy case
known as Stripe. This business organization helps in the movement of money over the internet
(Sekaran and Bougie 2016). The report will be having numerous sections and each of the
sections will be very much important to find out the effectiveness of the paper.
The case study describes the growth of a business organization Stripe which was
established in the year 2011 by the Collision brother. The service provided by this business
organization is very much important for most of the small and medium sized business
organization to accept payment from their consumers from the website, mobile devices, and at
the Point of Sale (POS). The prime payment issues faced by most of the starts up organizations
has been resolved using the service provided by this organization (Uhl and Gollenia 2016). The
payment processing infrastructure of the e-commerce startups had significant complications as
huge investments were required to develop the payment gateways (Markovich, Achwal and
Queathem 2017). There were lots of limitations in the development of these payment processing
gateways. In order survive in the competitive market, each of the e-commerce organizations was
looking for a large payment processor which will be attached to the traditional bank. The
following unit of the paper will be identifying the problems in the case.
Identification of the problem in the case
The primary problem faced by the start-up e-commerce is controlling of the huge
volumes of transactions. The conventional payment systems used by the e-commerce
organizations is numerous complexities and are not very versatile in nature considering the

3HELPING MONEY MOVE ON THE
INTERNET
compatibility issues of the payment gateways with the devices used by the clients of the e-
commerce organization.
The consumers of the e-commerce organization faces numerous difficulties in terms of
the difficulties in the entire payment procedures. Presenting the photo identification of the
consumers for a financial transaction can be also considered as a constraint of these offline
payment systems. The other issue of the conventional payment system is the complexities of the
API. Huge amount of time are required in the conventional payments is the other difficulties
faced by the consumers of the e-commerce industry (Noe et al. 2017). These payment systems
are generally connected to the banks, the consumers face huge security issues while using these
payment systems.
The problem faced by Stripe considering their desire to grow in the international market
is the market competition of the local markets and targeting the larger merchants of USA. There
were lots of privacy issues in terms of the fraudulent activities associated with the use of offline
payment transactions (Rao et al. 2016). These offline payment systems do not provide security to
either the merchant or the consumer. The complexities of the tax regulations which are different
in different countries are sometimes not considered by these offline transactions.
The control of the sub-merchant accounts is also a concern for the offline payments
systems as well. The payment facilitators of the offline transactions are the other issue associated
with the use of the conventional offline payment procedures which were used by the e-commerce
start-ups organisations (Yeoh and Popovič 2016). There are other technical difficulties
considering the different types of credit card which are used by the consumers of the e-
commerce organizations. These offline payment transactions have compatibility issues
associated with the newest tools of the APPLE Pay, Android Pay and Bitcoins (Markovich,

4HELPING MONEY MOVE ON THE
INTERNET
Achwal and Queathem 2017). The transaction protocols of the offline payments systems have
issues like interchange free which is also a significant concern for the consumers of the industry
as well. These aspect are needed to be resolved by the developers of the payment processing
system so that the business reach of the start-up organizations are increased to every part of the
world. The following unit of the paper will be discussing the role of Stripe in solving these
identified problems.
Analysis of key issue
As deliberated by Lăzăroiu (2015), the scientific management theory can be very much
useful for Stripe to increase the business reach to all parts of the world. The identified issues face
by the consumers of this industry in terms of the complexities can be also understood in the first
place and solved using this management theory. The researcher of the paper stated the
productivity of the employees of the IT organizations can have a huge impact on the net
profitability of the business. The researcher stated that the efficiency of the workers of business
organizations are very much helpful to solve any categories of problem faced by the consumers
of this industry. The most significant part of the paper is that it focuses on the implementation of
the theory in an IT environment. However, the only limitation of the paper is that it does not
provide any case study to support the discussions of the paper.
As conversed by Julien (2018), the bureaucratic management theory can be very useful
for Stripe so that the productivity of the organization is increased. This theory can be also
applied in the working environment of Stripe so that the identified issues of this organization can
be solved. However as stated by Hunter, Saunders and Constance (2016), Levin’s Change
Management Model can be also used to analyse the situation face by Stripe regarding the
complexities faced by the new organizations. The researcher of this paper stated that this model

5HELPING MONEY MOVE ON THE
INTERNET
can be applied in any working environment to manage the change required to grow the business.
The expected behaviour of the employees working in the production laboratories of Stripe can be
also revised using this model. This model can very much useful to understand the growing
concerns of the e-commerce industry. It can be also said that the McKinsey 7S framework can be
very much important to deal with issues face by Stripe such as connectivity issues with the banks
or the API compatibility issues. The researcher of the paper stated that the time consuming of
the conventional offline payment systems can be solved using the advanced online payment
transaction schemes.
As debated by Hair et al. (2015), the fraud management lifecycle theory can be very
much important to deal with the fraudulent activities of the offline transaction systems. This
management lifecycle theory can be also very much helpful to recover the lost data of the
consumers. The routine activities of the transaction can be also managed using this life cycle
theory. Thus this unit of the paper is very much helpful to analyse the key issues faced by Stripe.
Role of the business consultant linking with the functional areas
The role of the business consultant is very much important for Stripe in order to deal with
the difficulties of the mobile devices used in different parts of the world. The sales and
marketing strategies are very much important to understand the market conditions of USA where
this organization wants to grow. The threats coming from the similar organizations in USA must
be understood in the first place by this organization so that they can create and implement better
marketing strategies which will be helpful to attract the potential clients of this organization
(Borwick 2018). The role of the internal business consultants will be important to address the
issues faced by the consumers of this business. The activities and the role of the external
business consultants are also very much important to deal with the changing business conditions

6HELPING MONEY MOVE ON THE
INTERNET
of e-commerce. The quality of products and service offered by this organization can be
positively affected due to the activities of the business consultants (Avetisov et al. 2016). Along
with the two different types of business consultant it can be said that the role of the surrogate
manager is very much important to deal with the complexities of the functional areas of the
scenario such as the complexities of the credit card network. The redirection of the bank
statement and the payment processor can be also smooth in the Stripe Dashboard. The business
consultants can be very much important to deal with issues such as the interchange fee which is
needed to be solved in the first place in order to protect the net profitability of the business. The
API which are provided to the merchant also involves security concerns which can be
purposefully solved using the abilities of a business consultant (Aronof and Ward 2016). These
API issues can be solved by the developers of Stripe, at the same time, it can be said the
transparency of the business can be also solved with the help of the business consultants. The
business consultants can play a huge role to deal with issues involved with the merchant
processing revenue. The restrictions in the fees and banking charges of each countries can be
understood with the help of the business consultant of this organization.
Stripe have partnership with different types of payment organizations such as the Paytm
and Alipay. The shares of these subsidiary organizations in a business transaction can be also
managed by the business consultants of Stripe (Alvarez, 2016). The service provided by the
software solution depart of this organization can be also improved with the help of the internal
business consultants. At the same time, it can be also said that the issues associated with the
partnership of the payment processors with the bank can be also minimized with the help of the
external business consultants. The role of the business consultants not only ends in minimizing
the issue associated with the business functions of Stripe but also helps in understanding the

7HELPING MONEY MOVE ON THE
INTERNET
financial protocol of each country along with its taxation regulations. The organizational
objective of Stripe is to increase their market reach to the smaller merchant of each country
which can be done by the external business consultants.

8HELPING MONEY MOVE ON THE
INTERNET
Conclusion
The paper helps in concluding the complexities faced by the consumers of the e-
commerce organizations. The organizational background can be determined from the paper along
with that the paper identifies the different types of problems faced by Stripe as they want to
increase their market reach among the smaller merchants of USA. The problems which have
been identified in this paper is the management of the huge volumes of data which were done
with the help of the conventional offline transaction system. The compatibility of the offline
transaction payments which were primarily used by the e-commerce organizations were
highlighted in the paper as well. There are security issues associated with the use of the offline
transaction systems as the consumers are supposed to present their photo identification while
registering their accounts in the traditional payment systems. The complexities of the smaller
merchants in USA can be also identified in the paper. The tax regulations of each of the countries
is also a significant concern for Stripe which can be determined from the paper as well. The
complexities of the transaction protocols can be also concluded from the paper as well. The
problems which are identified in this paper is analyzed with the help of management theories
such as the bureaucratic management theory, Levin’s Change Management Model and
McKinsey 7S framework. The paper also identifies the role of the internal and the external
business consultant for Stripe. Thus, this paper can be very much useful to understand the role of
business consultant, process and career opportunities for a business consultant.

9HELPING MONEY MOVE ON THE
INTERNET
Reference
Alvarez, J.L. ed., 2016. The diffusion and consumption of business knowledge. Springer.
Aronoff, C. and Ward, J., 2016. Family business governance: Maximizing family and business
potential. Springer.
Avetisov, G., Kadinsky, R. and Simic, B., HYPR CORP, 2016. Biometric payment gateway
device. U.S. Patent Application 29/526,700.
Borwick, I., 2018. Organizational Role Analysis: managing strategic change in business settings.
In Coaching in depth (pp. 3-28). Routledge.
Hair Jr, J.F., Wolfinbarger, M., Money, A.H., Samouel, P. and Page, M.J., 2015. Essentials of
business research methods. Routledge.
Hunter, I., Saunders, J. and Constance, S., 2016. HR business partners. Routledge.
Julien, P.A., 2018. The state of the art in small business and entrepreneurship. Routledge.
Lăzăroiu, G., 2015. The role of the management consultancy industry in the knowledge
economy. Psychosociological Issues in Human Resource Management, 3(2), pp.71-76.
Markovich, S., Achwal, N. and Queathem, E., 2017. Stripe: Helping money move on the internet.
Kellogg School of Management.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management:
Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

10HELPING MONEY MOVE ON THE
INTERNET
Rao, D., Duraipalarn, V., Badri, M.N. and Zolnikov, P., Visa International Service Association,
2016. Method to use a payment gateway as contextual enabler between different parties. U.S.
Patent Application 15/040,726.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Uhl, A. and Gollenia, L.A. eds., 2016. A handbook of business transformation management
methodology. Routledge.
Yeoh, W. and Popovič, A., 2016. Extending the understanding of critical success factors for
implementing business intelligence systems. Journal of the Association for Information Science
and Technology, 67(1), pp.134-147.