TBUS620 Business Strategy Capstone

Introduction

Zip Pay is also known as Zip Money limited. The company was founded in the year 2013 to offers financial services and facilitates e-payment services to the target customers. The headquarters of the company is located in Sydney, Australia. The business organization has gained much success and profitability in the past years due to its unique services and secure payment facilities. The company has expanded its services in various other locations including United States, New Zealand, United Arab Emirates and South Africa. The services can be obtained directly from online sources such as company website or application and can be obtained in-store (ZipCo. 2021). The company has formed partnership with various retail companies including groceries, stationery, fashion, clothing and medical to facilitate better services to the customers and clients.

Internal environment – SWOT analysis

SWOT analysis framework has been used to identify the internal business environment of Zip pay.

Strengths :

The unique services of the company with both online and offline presence strengthens the overall operations and activities of the business organization. The skilled and diverse workforce enhances the innovation capability of the business organization and enables the business organization to provide highly efficient services. It has formed alliance and partnership with various other retail companies to facilitate better transaction and services to the customers (ZipCo. 2021). Moreover, the capabilities and resources of the organization provides a competitive advantage to the organization.

Weakness :

The business model of Zip Pay provides limited cash flow as it generates revenue at a later date. It also faces internal and managerial disputes and conflicts such as lack of flexibility, slow decision making process and high rate of employee turnover affects the flow of business operations (ZipCo. 2021).

Opportunities :

There are various opportunities prevailing in the external market that can be leveraged by the business organization to improve its business operations and gain competitive advantage. The advancement of technology can be leverages to improve the services and overcome threats and weaknesses (Ibisworld.com. 2021). Increase online payment trends among the consumers provides better opportunity to increase its revenue generation.

Threats :

The possible threats in the market such as increase in the level of competitive due to increase in demand might affect the profitability of the business enterprise (Heritage.org. 2021). Constant changes in laws and legislations might affect smooth functioning of business operations. The security threats reduces confidence and trusts among the consumers in the services that are being offered to the customers (Xu and Gao 2021).

External environment
PESTAL analysis

Pestle analysis framework can be used to identify the factors from the external business environment that has direct or indirect impact on the operations and activities of the business organization.

Political factors – Australia has a stable political environment which is favorable for business operations. However, the ongoing political tensions among various countries due to the pandemic situation have impacted its relation with other nations. This might negatively impact service offerings of Zip Pay (Statista. 2021) 

Economic factors – The global pandemic situation has affected the economic conditions of the country as lowered the purchasing power in the hands of the consumers. This affects the sales and revenue generation of the business organizations (Caddy, Delaney and Fisher 2020).

Social and cultural factors : The ongoing trend of online payment and e-transactions  are a greater opportunity for Zip pay to further improve its business operations and enhance its competitive advantage in the market.

Technological factors : The advancement of technology can be utilized to further improve its services and overcome service limitations such as security and breaches. It can provide better opportunities of growth and wellbeing.

Environmental factors – There is an increasing trend for eco-friendly products and services. Consumers prefer eco-friendly products and services which is an opportunity for business improvement (Deufel and Kemper,  2018). This can be addressed to increase the sustainability and competitiveness of the business in the long run.

Legal factors - Uncertain economic conditions, constant changes in laws and legislations continuously especially due to the ongoing pandemic situation might impact the business operations and affect the profitability of the business organization (Deufel and Kemper,  2018).

Competitive advantage

The overall strengths of the organization such as the resources and the capabilities as well as the unique business model provide competitive advantage to the business organization. The strategies implemented by the organization such as low price policy enables the company to attract new customers and retail old customers in the market. The service concept based on ‘buy now pay later’ is highly attractive to the customers especially who are price sensitive. Zip pay effectively utilized the internal resources and capabilities of the organization (Deufel and Kemper,  2018). The user friendly and easy to use facilitates differentiates the business from other prevailing competitors in the market. This provides a competitive advantage to the business organization.

Sources of strengths

The strengths of the organization are sourced from internal capabilities and abilities of the organization which provides a competitive advantage to the business. The capabilities of the organization are derived from skilled labor and its diverse workforce. The unique services offered by the organization distinguish the company from other rival companies in the market (Xu and Gao 2021). These strengths of the company helps to gain higher rate of customer satisfaction.

Sources of Weakness

There are certain weakness which might hinder the growth and development of the business organization in the long run. The lack of flexibility, internal conflicts and lack of effective managerial approach might affect the growth of the business and affect its competitiveness. The lack of flexibility affects innovation capability of the organization (ZipCo. 2021). It needs to undertake steps and approaches to effectively utilize the human resource capacities and leverage other prevailing opportunities in the market. This will help the company to reduce the rate of employee turnover. High rate of employee turnover in the organization affects the reputation and financial aspects of the business (ZipCo. 2021). The lack of measures to overcome security issues and threats might have significant impact on the business.

Future sustainability

The growth of online payment and increase in the trend of online market provides greater scope in the future. The service facilitates consumers to purchase the products and manage their finances as per their requirements. This facility provides a better scope for the business. The services offered by Zip Pay are becoming an ubiquitous payment options for people in Australia. The advancement of technology will enhance the e-payment services and reduce the scope of money laundering and security breach in the country. Most importantly, the services promotes responsible consumption and sustainable consumption while ensuring sustainable economic growth and wellbeing of the community (Fisher, Holland and West 2021).

Conclusion

Therefore, from the internal and external environmental analysis, it can be concluded that Zip Pay offers wide variety of online payment services to the customers model with additional services such as ‘buy now pay later’ which differentiates the business from other competitors. There are number of opportunities in the market such as favorable social factors and technological factors that can be leveraged to improve the business and overcome competitive threats.

References

Caddy, J., Delaney, L. and Fisher, C., 2020. Consumer Payment Behaviour in Australia: Evidence from the 2019 Consumer Payments Survey (No. rdp2020-06). Reserve Bank of Australia.

Deufel, P. and Kemper, J., 2018. Online payment method selection: The habitual choice of deferring payment.

Fisher, C., Holland, C. and West, T., 2021. Developments in the Buy Now, Pay Later Market. 1. 1 Cash Demand During COVID-19 2. 12 Property Settlement in RITS 3. 21 From the Archives: The London Letters 4. The Anatomy of a Banking Crisis: Household Depositors in the Australian 33 Depressions, p.59.

Heritage.org. 2021. Australia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. [online] Available at: <https://www.heritage.org/index/country/australia> [Accessed 24 April 2021].

Ibisworld.com. 2021. IBISWorld - Industry Market Research, Reports, and Statistics. [online] Available at: <https://www.ibisworld.com/au/company/zip-co-limited/441667/> [Accessed 24 April 2021].

Statista. 2021. Statista - The Statistics Portal. [online] Available at: <https://www.statista.com/map/australia-and-oceania/australia/e-commerce> [Accessed 24 April 2021].

Zip.co. 2021. Zip Pay & Zip Money | Up to $10,000 Interest Free | $0 Upfront. [online] Available at: <https://zip.co/> [Accessed 24 April 2021].

ZipCo. 2021. Annual/Half Year Reports | ZipCo. [online] Available at: <https://zip.co/investors/reports> [Accessed 24 April 2021].

ZipCo. 2021. ZipCo.investors  [online] Available at: <https://zip.co/investors/> [Accessed 24 April 2021].