2016

International
Business Environment

GOPINADH DADI
PGP31024
SECTION A

ACKNOWLEDGMENT:

I would like to thank Professor K G Sahadevan for his valuable suggestions and
guidance for the subject, I would like to thank my friends for their continuous
support
DECLARATION:
I Gopinadh Dadi (PGP31024) of Section A declare that the report is my individual
report and no part of it is used without proper citation

Contents
Executive Summary:................................................................................................................................ 3
Evolution of First Data: ........................................................................................................................... 3
STRATEGIC INTENT: ................................................................................................................................. 4
VISION: ................................................................................................................................................ 4
MISSION: ............................................................................................................................................. 4
ACTIVITY SYSTEM: ............................................................................................................................... 4
VALUES: ........................................................................................................................................... 4
CULTURE: ............................................................................................................................................ 4
Code of Conduct: ................................................................................................................................ 5
Human Resources: .............................................................................................................................. 5
Corporate Governance: ...................................................................................................................... 5
Audit Committee:............................................................................................................................ 5
Governance Compensation and Nominations Committee: ............................................................ 5
Risk Committee: .............................................................................................................................. 6
First Data: ................................................................................................................................................ 6
Business Description: .......................................................................................................................... 6
Business Solutions:.......................................................................................................................... 6
Financial Services: ........................................................................................................................... 6
Network and Security Solutions:..................................................................................................... 6
2015 Performance: ............................................................................................................................. 6
Board of Directors: .............................................................................................................................. 6
FINANCIAL ANALYSIS:.............................................................................................................................. 7
Stock Prices: ........................................................................................................................................ 8
References: ............................................................................................................................................. 8

Executive Summary:
This report examines the internal environment of FIRST DATA a fortune 500
company. It has fallen 4 places from the last year to settle at a rank of 265 out of
500. First Data has been on the Fortune 500 list 21 times after its incorporation. First
Data stands at 31st place in the Forbes list of Americas largest private companies.
This report analyses the internal factors that govern the success of the company and
how the company leverages the factors like workforce and its activity system to
augment its wealth.
On the philosophy of simplifying the process of commerce possible First Data was
formed in 1971. First Data is the first initiator of the electronic transaction between
banks. It was the first to process both Master Card and the Visa. First Data was the
first company to install technology to track lost and stolen cards. First Data is spread
over 118 countries serving 4000 institutions and 60 lakh merchants. First data boasts
of a speed of 2000 transactions per second. First data deals with a transactional
amount of 1.9 $ trillion every year. First Data deals with 28% of the worlds ECommerce volume. First data has 950 Million card accounts.
Clover system from First Data simplifies transactions and reduces all the systems
into 1 single interface. Clover is an award winning technology from First Data.
Insightics is the data analytics platform developed and used by First Data. Gyft is
developed for facilitating the use of virtual gift cards. Perka is used for mobile
loyalty programs. Payeezy has been developed by First Data for the E-Commerce
platform. TransArmor technology pioneered by First Data would ensure the safety
of all the transactions transacted across the globe using Frist Data services. First
Data has also facilitated for contactless payment services in collaboration with Apple
Inc, the service is known as Apple Pay. First Data is helping financial institutions to
incorporate EMV systems into all of their transactions.
First Data uses the Star Network the largest independent debit network in the United
States. Star is used in over 1 million locations over the US. Star securely connects
card holders to commerce maximising card usage and revenue.

Evolution of First Data:

1971: First Data is founded in 1971 at Omaha to provide accessories to Mid America
Bancard Association.
1976: First Data becomes the first processor of Master and Visa cards
1980: American Express buys the First Data resources.
1992: First Data spins off from Amex through an IPO and starts it UK and Australian
operations
2001: First Data has expanded into the European and Mexico market. It acquired
TASQ, VisionPLUS.

2007: First Data announces merger agreement with KKR and becomes a privately
held entity
2010: First Data enters India through an alliance with ICICI
2015: In the largest IPO in that finance year First Data has been listed as a public
company.
2015: It has posted its first positive results in 29 quarters since it was a privately
held firm
2015: First Data has expanded into the Middle East Africa, some parts of Asia
including India and the entire Europe.

STRATEGIC INTENT:
VISION:
Vision of First Data Corporation is To shape the future of global commerce by
delivering the worlds most secure and innovative payment solutions.

MISSION:
Mission of First Data is Around the world, every second of every day, we make
payment transactions secure, fast and easy for financial institutions, merchants and
their customers. We leverage our unparalleled product portfolio and expertise to
deliver solutions that drive our customers revenue and profitability.

ACTIVITY SYSTEM:
First Data adheres to certain value systems and they follow them in each and every
walk of their daily transactions. Their values are:
VALUES:
1) Putting Customers first and creating value for them in everything they do
2) Empowering employees and supporting them to learn and grow in their careers
3) Acting with integrity and building relationships based on honesty, truth and
respect with customers and colleagues alike
4) Delivering excellence, Innovating and challenging the situations to achieve
exceptional results
5) Enjoying every moment of the journey and taking pride in the work and success
of First Data as a diverse global family.

CULTURE:
Every day, merchants, financial institutions and governments around the world rely
on First Data to deliver the simple yet sophisticated solutions that help customers
thrive in the changing world of commerce and make the most of every transaction.
1) First Data operate with clear set of values and principles that hold both the
partners and clients accountable

2) Success of the company is translated into a range of benefits for all the stake
holders involved.
3) Diversity of experience and knowledge is given due weight in all walks of the
company
4) Innovative technologies are looked upon to find ways to change the way business
is done and thereby changing the world
5) First Data is always committed in acting as a responsible corporate citizen and all
the stake holders are expected to abide by the same

Code of Conduct:
Standards for legal and ethical business conduct and behaviour and decision making
while holding employees accountable to each other and clients is expected in a
certain manner by the company. It defines the expected behaviour in alignment with
the core values and guiding principles.
Commitment to the people, Commitment to the company and Commitment to the
community, public and the government are valued highly at First Data.

Human Resources:
Mind Spring: It is the one stop destination for all the learning for all the professionals
in the organisation. Access to it is also provided to internships. First Data places
huge emphasis on training and promotion of the learning culture in the organization
Benefits: First Data provides a lot of benefits for all of its stake holders. Benefits
include Health schemes, Work/Life Balance and Financial benefits. Stock Ownership
options are provided for its employees

Corporate Governance:
First Data maintains certain standards to maintain high ethical standards
Audit Committee: The purpose of the audit committee is to fulfil its responsibilities
with respect to
i) Financial Statements
ii) Compliance with legal and regulatory requirements
iii) Qualifications, performance and independence of accounting firm
iv) Performance of internal audit department of First Data

Governance Compensation and Nominations Committee: The duties of this committee

would be
i) Overseeing the compensation plans and creating the annual report of First Data

ii) Identifying members to become a part of the board

iii) Recommend compensation guidelines and oversee the evaluation of it

Risk Committee: The job and responsibilities of the risk committee would be to assist
the board and other committees in fulfilling their responsibilities for Risk
management of First Data and its subsidiaries.

First Data:
Head Quarters: Atlanta, Georgia

Business Description:
First data operates in 3 different walks of life. They are:
Business Solutions: E-Commerce solutions and POS offering both cloud and generic
and mobile payment service s
Financial Services: First Data provides credit based services for both bank and Non bank issues. Other services which relate to cards are also offered by First Data
Network and Security Solutions: Value added services and security is provided for
different kinds of financial transactions

2015 Performance:
Human Resources: 24,000
Operations: 36 countries
Transactions: 118 countries
Transaction Volume: 79$ Bn
Revenue: 11.5 $ Bn

Board of Directors:
Frank Bisignano

Joseph Plumeri

Chairman

Vice Chairman

Joe Forehand

Henry Kravis

Heidi Miller

James Nevels

Scott Nuttal

Tagar Olson

Director

Director

Director

Director

Director

Director

FINANCIAL ANALYSIS:
Quarter 4 15:
i) Revenue of First Data is 3 $ Bn. It was up by 3% from the last quarter.
ii) Operating profit for First Data is 99$ Mn which was down by 76% from the last
quarter
Income Statement
Period Ending:
Total Revenue
Cost of Revenue
Gross Profit
Operating Expenses
Research and Development
Sales, General and Admin.
Non-Recurring Items
Other Operating Items
Operating Income
Add'l income/expense items
Earnings Before Interest and Tax
Interest Expense
Earnings Before Tax
Income Tax
Minority Interest
Equity Earnings/Loss Unconsolidated Subsidiary
Net Income-Cont. Operations
Net Income
Net Income Applicable to Common Shareholders

12/31/2015
$11,451,000
$6,914,000
$4,537,000
$0
$2,345,000
$0
$1,022,000
$1,170,000
($1,039,000)
($338,000)
$0
($338,000)
$101,000
($213,000)
$239,000
($1,481,000)
($1,481,000)
($1,481,000)

Ratios
250%
200%
150%
100%
50%
0%

12/31/2012

12/31/2013

12/31/2014

12/31/2015

12/31/2014
$11,152,000
$6,602,000
$4,550,000
$0
$2,056,000
$0
$1,056,000
$1,438,000
($113,000)
($129,000)
$0
($129,000)
$82,000
($193,000)
$220,000
($458,000)
($458,000)
($458,000)

12/31/2013
$10,809,000
$6,558,000
$4,251,000
$0
$2,036,000
$0
$1,091,000
$1,124,000
($126,000)
($779,000)
$0
($779,000)
$105,000
($177,000)
$188,000
($952,000)
($952,000)
($952,000)

12/31/2012
$10,680,300
$6,561,300
$4,119,000
$0
$1,825,400
$28,200
$1,191,600
$1,073,800
($85,500)
$988,300
$1,897,800
($909,500)
($224,000)
($173,600)
$158,200
($700,900)
($700,900)
($700,900)

Pre Tax ROE and After Tax ROE has been increasing for First Data from the past 4
years and that is a good sign for the company.
Current Ratio and the quick ratio for the company is around 100% which is the norm
for a service company and it indicates that the company has been doing well of late.

Stock Prices:

Stock Prices
20
18
16
14
12
10
8
6
4
2
0
15-Oct-15

15-Nov-15

15-Dec-15

15-Jan-16

15-Feb-16

Stock Price of First Data has been steadily decreasing over the past few months
which is a worrying sign for the company.

References:
http://fortune.com/fortune500/first-data-265/
http://www.forbes.com/companies/first-data/
https://www.firstdata.com/en_us/about-first-data/board-of-directors.html
https://www.firstdata.com/en_us/about-first-data/careers-home/why-first-data.html
https://www.firstdata.com/en_us/about-first-data/vision-mission-and-values.html
http://investor.firstdata.com/phoenix.zhtml?c=111215&p=irol-irhome
http://investor.firstdata.com/phoenix.zhtml?c=111215&p=quarterlyearnings
https://www.firstdata.com/en_us/about-first-data/media/first-data-facts.html
http://investor.firstdata.com/phoenix.zhtml?c=111215&p=irol-reportsannual
http://www.nasdaq.com/symbol/fdc/historical
http://www.nasdaq.com/symbol/fdc/financials?query=income-statement