STRATEGIC

MANAGEMENT
Case study: Mastercard: Creating a World Beyond Cash

Submitted by Rhea Rejith

P21195
PGDM B
MASTERCARD: CREATING A WORLD BEYOND CASH

1. Articulate the elements of strategy formulation as conceived by Mr. Banga and his
approaches to align various functions with the newly formulated strategy

Ajaypal Banga is the chairman of Mastercard, a group of banks, while Michael Miebach is its
CEO. Mastercard is a multinational payments and technology firm that improves productivity,
efficiency, and quality of life. To make secure payments, it links with businesses, the government,
and people worldwide. In order to make MasterCard successful in the following years, they are
thinking about several scenarios. For their goal of a "World Beyond Cash," they have been using
the "Grow-Diversify-Build" strategy since 2006. With a top-down management style where
everyone wants to be "told," as if they knew what should be told and what is not to be told, they
are the market leader while also holding second place in the business. Mastercard primarily
focused on the US market.

Most employers came from the banking industry, and they were unwilling to accept personal risks.
They almost never support newly proposed ideas. Mastercard invested throughout Banga's tenure
as CEO on developing a strong culture, acquiring top talent, promoting innovation, partnering with
prospective competitors, and launching new services. When Miebach took over as Mastercard's
CEO, developments in payments occurred, including a rise in nationalism, the development of
blockchain technology, and the democratisation of the financial industry.

In this instance, it is believed that cash is the primary rival in the payments sector. In order to
introduce fresh innovations to the market, Mastercard hired more millennials in 2010 than they did
in 2010. In 2010, they only hired 7% of millennials. Mastercard has adopted several steps to lead
the industry by recognising the potential hazards. They overcame the cultural obstacles they
encountered, such as the employees' lack of willingness to take risks and the lack of encouragement
for novel ideas. They get beyond the cultural boundaries by implementing these tactics.
Additionally, they bought a tech business, whose CEO was appointed to lead innovation. They
also collaborated with Apple Pay, which is regarded as the payment system of the future. The
business's revenue changed dramatically as a result of these strategies.
 1. Do external, internal and TOWS analysis of Mastercard (2021)

The opportunities and dangers are the main topics of Mastercard's external analysis. For
Mastercard, the following opportunities have arisen:

o Emerging markets: People all across the world have welcomed the digital payment
industry, giving them access to safer and more secure payments.
o Partnership with a tech company: Mastercard has a partnership with Apple Pay,
which is seen as the application of the future for all payments.
o Employing more millennials: Mastercard has increased its millennial workforce in
an effort to infuse the system with more creativity. Millennial employees made up
only 7% of the workforce overall before, but towards the end, that percentage had
grown.
• The following are some of the threats that Mastercard has experienced:
o Entry of various digital payments: Fin-tech firms are essential in creating various
applications for digital payments. This might put other applications in direct rivalry
with the Mastercard.
o Industry competition: International payments like Union Pay and Visa have been
identified as Mastercard's main rivals.
o Government regulations: the introduction of cryptocurrency, routine government
audits, and modifications to existing rules
o Growing cyber-attacks: Due to the growing cyber-attacks and hacking, many
individuals lacked confidence in digital payment transactions.

Mastercard's internal analysis focuses on its strengths and weaknesses.

• The advantages of Mastercard include the following:

o Safe and secure: Mastercard is the market leader and comes in second in the field
of digital payments. With the aid of various security checks at various levels, they
offer safer payments.
o Global reach: Mastercard has developed and made a point of being present in
several nations rather than sticking to just one.
 • The following are examples of Mastercard's weaknesses:
o Employee behaviour: The employers of Mastercard were primarily from the banking
industry, and they were not willing to take any risks in their job or offer fresh ideas.
o Recruitment error: The company only hired 7% of millennials, which decreased innovation
inside the organisation.

We were able to pinpoint the various advantages, disadvantages, opportunities, and dangers that
MasterCard faces by looking at both its internal and external analyses. A business like Mastercard
must make the most of its advantages and assets in order to succeed in the marketplace. With the
support of millennials, the company has the ability to concentrate on new inventions, which will
undoubtedly result in a significant change in the company's revenue. Additionally, they must
guarantee that using the system to make payments is safer than using any other applications. The
development of new markets has also contributed to a rise in MasterCard acceptance among
consumers, companies, and the government. Even the association with fin-tech firms gained
widespread acceptance in people's thoughts. Therefore, it is crucial for a company like MasterCard
to concentrate more on its strengths and possibilities since they will aid in increasing public
acceptability. Additionally, it's crucial for them to lessen dangers and weaknesses. According to
the perspective of the industry, the company's dangers and weaknesses might be turned into
advantages and chances for other businesses to surpass Mastercard. In order to dominate the
market and succeed in the sector, it is crucial that the company manage all of these ups and downs.
When analysing the trends, the business may concentrate on quadrant 1, where it must optimise its
advantages and prospects.