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Introduction Of MasterCard Case study

MasterCard Worldwide is essentially an international financial services company with American roots that has its headquarters in Purchase, New York, a city in Westchester County. In the American city of O'Fallon, Missouri, is where Global Operations' main office is situated. The company's main goal is to facilitate payments between different bank merchants and to issue cards or credit unions for purchases that make use of MasterCard credit cards and debit cards, which enable customers to make purchases both online and offline.

Introduction Of MasterCard Case study

Vision and Mission Statement of Mastercard

The goal of Mastercard is to connect and fuel a global, inclusive digital economy that benefits everyone by facilitating secure, easy, intelligent, and accessible transactions.

Vision and Mission Statement of Mastercard

MasterCard Inc. Situation Analysis

Since 2006, the business has been a public limited corporation. Before going public, the business was a cooperative controlled by more than 25,000 financial institutions, each of which issued its own branded cards. The card was created to compete with the Bank America, a Bank of America product that was eventually changed into a Visa credit card issued by Visa Inc. MasterCard was known as the interbank or the Master Charge from 1966 until 1979.

Industry Structure and economic feature

Since the global economy recovered from the crisis that severely hurt all financial and economic institutions throughout the world, MasterCard's overall revenues have been steadily rising. MasterCard reported $9.47 billion in sales in 2014 compared to $8.35 billion in revenue for the company in 2013. $7.39 billion was the overall income for the year 2012. MasterCard had $6.71 billion in sales in 2011. The company's revenue growth has shown that it has been consistently generating more sales than in prior years, which has shown that it is in good financial standing.

MasterCard Strategic

Providing connections between customers, financial institutions, merchants, governments, digital partners, businesses, and other organizations around the world, Mastercard is a technology company in the global payments sector that enables customers to use electronic payment methods rather than cash and checks. We have ambitious aims to attract new customers and new merchants for electronic payments through a concerted strategy that will hasten financial inclusion and lead us away from the use of cash. Additionally, we are putting a lot of effort towards extending electronic payments into new payment flows including bill pay, person-to-person payments, and remittances as well as important everyday spend categories like parking and transit.

We are pursuing a variety of strategies to get a competitive edge over other companies in order to increase preference for our brands and increase our market share. This entails providing each of our stakeholders with added value. We achieve this by offering the most safe and secure solutions.

Competitive Analysis and Advantage in the industry

Richard N. Haythornthwaite, the company's chairman, Ajaypal Singh Banga, its president and CEO, and Ann Cairns, its president of international markets, make up MasterCard's corporate leadership structure. Gary Flood is the president of global products and solutions, followed by Chris McWilton as president of North America, Martina Hund Mejean as chief financial officer, Rob Reeg as chief human resource officer, Timothy Murphy as general counsel and chief franchise officer, and Walt M. Macnee as vice chairman. One of the duopolies that rules the world of payment processing is Mastercard Incorporated (NYSE:MA). Due to this advantage, it has been able to ensure a steadily rising top and bottom line over the past ten years by taking advantage of economies of scale. Due to the high entry barriers for smaller firms, MA's dominance is unlikely to be undermined by new competitors. Even new digital wallets that were widely predicted to challenge established players' hegemony have mainly decided to capitalise on it rather than displace it. Moving forward, MA has a successful "multi-rail plan" to simplify the many payment procedures that are now in place (or payment rails). Offering Real-Time Payments is one of this strategy's benefits (RTP).

SWOT Analysis

In reaction to BankAmericard, which was issued by Bank of America and eventually became a Visa credit card issued by Visa Inc., many bank card associations banded together to form MasterCard, which was first known as Interbank from 1966 to 1969 and Master Charge from 1969 to 1979.

The company was established as a result of a group of 17 bankers using it to obtain extra copies of their credit cards. Consequently, no particular bank had influence over the ICA.

In 1968, the InterBank card was given the name MasterCharge in competition with MasterCard.

Due to its effective marketing techniques, the business has grown in popularity; going forward, it may leverage digital marketing to attract additional clients.

A technological business that works in the international payments sector is Mastercard. Thanks to its extensive presence and robust brand portfolio, the firm is doing fairly well. Customers have trusted it because of its safe and secure system, which has increased the company's options for expanding into other areas. For a suitable structure and operation, it has to focus on its four-party system and enhance its financial planning.

The firm faces fierce competition in the financial sector, so it must seize chances and lessen dangers in order to gain a competitive edge.

The business may expand its footprint in new markets by utilising digital marketing techniques.

PESTLE Analysis

The elements that might affect Mastercard Incorporated's long-term profitability in a particular nation or market are heavily influenced by political issues. By providing credit services in more than a dozen nations, Mastercard Incorporated exposes itself to a variety of political systems and environmental concerns. Diversifying the systemic risks of the political environment is necessary to succeed in such a dynamic sector as credit services across several nations.

The aggregate demand and aggregate investment in an economy are determined by the macroenvironmental variables, such as the inflation rate, savings rate, interest rate, foreign exchange rate, and economic cycle. While microenvironmental elements like industry standards have an influence on the firm's competitive edge. Mastercard Incorporated can forecast the growth trajectory of not only —sectoryname— sector but also that of the organization by using country-level economic factors like growth rate, inflation, and industry-level economic indicators like Credit Services industry growth rate, consumer spending, etc.

The manner of life and culture of the society have an effect on the organizational culture in a given setting. When developing a marketing message for clients in the Credit Services business, marketers at Mastercard Incorporated heavily rely on the shared ideas and attitudes of the general populace.

Numerous sectors are being rapidly disrupted by technology. The transportation sector is a wonderful example to demonstrate this idea. The business has been changing quite quickly over the past five years, without even allowing the established firms a chance to adapt. Uber and Lyft are currently the dominant players in the taxi market. Technology companies like Google are driving the automation of the automotive sector, while Tesla, which has declared an electrical vehicle revolution, is upending production.

Different markets have various norms or environmental requirements, which might have an effect on an organization's profitability there. States can have different liability and environmental regulations even within the same nation. For instance, in the United States, Florida, and Texas have differing responsibility provisions in the event of accidents or environmental catastrophes. Similar to this, several European nations offer substantial tax incentives to businesses engaged in the renewable energy industry.

Target Market Analysis of MasterCard

MasterCard was aware that they wanted to get its card into the hands (and wallets) of the growing middle class in Asia. HSBC, a bank with origins in China, may assist MasterCard in comprehending its target demographic, but MasterCard would still need to develop a message that would appeal to customers.

In order to discover that message, MasterCard started by making a list of the card's attributes and potential advantages for cardholders. These factors included things like the card's name, design, possibility of a player endorsing it, types of prizes to be offered along with the card, slogans to use to link the card to the World Cup, and whether to provide incentives.

Marketing Mix of MasterCard

Strong product portfolio - Competitive advantage in Mastercard's marketing strategy Its product line contains a sizable number of goods and services, including prepaid cards, commercial, debit, and credit & charge services. Loyalty & rewards, Mastercard advisor services, processing, and safety & security services are just a few of the value-added goods & services that are available. Through strategic partnerships and acquisitions, the firm has been able to appear on more than 1600 million cards worldwide as of December 2016. It closely collaborates with more than 25000 financial institutions worldwide (Consumer credit -740 mn cards, Debit & prepaid- 888 mn cards and Commercial credit-44 mn cards).

MasterCard Competitive Analysis

The network of Mastercard allows digital transactions in-app, online, and in-store for customers, retailers, wallet providers, and other parties. In order to make its products and services accessible in more than 210 countries worldwide, it closely collaborates with suppliers from a variety of industries, including those that provide IT equipment, telecom, consultants, human resources, marketing, technology, and many others. To do this, it authorises, clears, and settles transactions in more than 150 different nations.

Key success factors

Modernized and real-time payment experiences are in high demand on the market thanks to consumers and businesses. Central infrastructure providers must be reliable, scalable, and trustworthy since they play a crucial part in this ecosystem.

Rodolphe Meyer, director of Marketing and Development at STET, and George Evers, senior vice president of Mastercard's New Payment Platforms client solutions department, spoke about the crucial requirements that core infrastructures must meet while laying the groundwork for a real-time society. ACI Worldwide outlined three key elements in a blog post, including the necessity of a strong regulatory framework, interoperability, and using an iterative approach.

Problems and Issues in MasterCard ’s Organization

He noted that U.S. retailers and merchants spent a "staggering" $62.5 billion in swipe fees last year and said that Visa and Mastercard "remain so dominant in the payments sector that businesses couldn't continue in business without utilising their cards." "Consumers across America eventually bear the burden of all those expenses."
A payment network made up of four companies powers Mastercard. However, other businesses, such American Express, Discover, and other payment methods, run on an external firm network where customers and business owners may speak with each other directly. In comparison to four-party payment systems, three-party payment systems enable more control over buyers and sellers.
The business and operations of Mastercard are impacted by the extensive global regulation of the financial sector, which includes several public litigation cases, regulatory proceedings, and investigations carried out by intermediary institutions.

Financial Analysis

Conclusion

According to a recent article, MasterCard reports that it already makes half of its income outside of the US, giving it a more geographically varied revenue mix than a significant rival like Visa. The steady switchover of certain European debit cards to Maestro over the previous five years contributed to a portion of MasterCard's benefit. Currently, 37% of card payment transactions in Eastern Europe are processed by MasterCard. Given that the business is competing with American Express, Visa, as well as other lesser-known European credit card firms, this is a significant amount. It achieves this by utilising its dominant Maestro position in Western Europe. Even while MasterCard is performing well in the European market, his Maestro brand is experiencing some difficulties. In the South Asian markets, such as Indonesia, Malaysia, and the Philippines, which are rapidly expanding, MasterCard has more cards and cardholders than its rivals. Although only in the Philippines does MasterCard have a larger value share of card payment transactions, over time, increased card usage in South Asian economies will translate into a bigger value share for MasterCard, notably in the Philippines and Malaysia. Overall, MasterCard is a major rival on the global stage. It benefits from being first to market in certain sectors, from specialisation in others, and from preference in still others. MasterCard will totally control the plastic card market if they increase their marketing efforts and have a better grasp of the nations they operate in.

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