Global Payment Inc. is a worldwide leading company in providing payment technology services, which provides innovative and creative solutions motivated by the high demand for their services globally. The company thrives on a well-managed and coordinated organizational structure that enables the company to provide a variety of products and services that allow their clients and customers to accept all modes of payments in a broad range of popular channels in several industries and markets globally. The company’s headquarter is located in Atlanta, Georgia. However, its products and services are distributed throughout the USA as well as globally. It hosts an approximate of 4,500 employees all over the world; it is the Fortune 1000 organization that has partners and merchants in 29 states of the USA, Brazil and countries all over Europe and the Asia-Pacific region. Its main business line includes offering a solution for debit and credit cards, electronic check conversion, gift cards and check verification, guarantee, and recovery. It also provides terminal management services and electronic services.
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The current Chief Executive Officer of the company is Jeff S. Sloan. He is also acting as a member of the Board of Directors of the Global Payment Inc. company. The Sloan’s management strategy has received much positive criticism from both the public and the private sector. He is regarded as a decisive team leader, whose management has led Global Payment Inc. to be listed as one of the best-managed companies in the USA. Sloan has over 20 years of experience with the strong technology and industry knowledge. He joined Global Payments Inc. as its president in 2010; later, in 2013, he became the CEO of the company. He holds a BS and BA degrees from the University of Pennsylvania and JD from New York School of Law. Sloan has excellent management skills that have seen Global Payment Inc. to increase in both excellence and revenue. The enterprise is also ranked as one of the best-managed companies worldwide due to its strategic management plans and policies (“Board of Directors – Global Payments Inc”). The manager has a proven record of accomplishments of excellence, especially after serving as the CEO of different organizations in the USA. He is also a member of several boards of organizations within the USA. His accomplishment has enabled the company to thrive under his strategic leadership and management.
Environmental Scan (Porter’s Five Forces Model)
In performing an environmental scan and assessment of Global Payment Inc., the best tool to use is the analysis of the Porter’s Five Forces Model. The model evaluates factors that directly and indirectly affect the internal competition among companies in the industry. These factors are based on the entrance of new business into the industry, which is a direct source of the competition to the already established companies. The availability of substitute goods or services by other enterprises also intensifies the internal competition among firms in the industry. In addition, the bargaining power exhibited by both buyers and suppliers affects the internal competition; it influences the sale price of commodities within the industry. All these factors are used to evaluate the performance of the company such as Global Payment Inc..
Risk of Entry by Potential Competitors
The Global Payment Inc. is the already established company in the merchant service industry. There are numerous companies offering merchant services in the USA. However, not all the businesses in this industry have attained the level of success enjoyed by Global Payment Inc. The industry depends solely on the customer satisfaction and privacy. A company that can uphold the two variables is bound to succeed in the merchant service industry. Global Payments is the already established business; it is the major company in the industry. There are a few competitors in the merchant services that can match Global Payment Inc. revenue or level of operation; hence, the entrance of a potential competitor may not halt its dominance in the industry in the short term. In the long-term perspective, the company may face a competition; however, with an efficient management system, it has adjusted itself to the level of competition in the industry (Landis and Bernauer). The merchant service industry is an open industry, where any company can enter without many restrictions. However, the new corporation would need more time to adjust to the level of competition in the industry. It is because once a company has established itself, it retains its clients and may not lose them to any other rival company unless they offer the best services in the industry.
Bargain Power of Suppliers
The bargaining power of vendors plays a critical role in the internal competition level in the industry. In the merchant industry, it is one of the market determinants. Several merchant services offer a variety of services, particularly the debit and credit card processing. The banks and other financial institution act as suppliers of these commodities, the merchant service providers do not directly sell their products and services, they obtain orders from businesses and commercial enterprises that need their service. The suppliers look for the most efficient, consistent and cost-effective merchant companies to trade their services. Global Payment Inc. for a long time has distinguished itself as a reliable, consistent, and cost effect company, while dealing with its clients. It aligns itself with a customer motivation and satisfaction strategy that enables it to retain its customers and clients over a given period. The bargaining power of suppliers of the company’s products becomes insignificant, once a mutual relationship between the enterprise and its customers is established. To Global Payment Inc., the bargaining power of vendors is a motivation to the business, rather than a threat to the company. Other enterprises in the industry play a fundamental role in influencing the bargaining power of suppliers, since the companies are still emergent and do not compare to the already established companies like Global Payment Inc.
Bargaining Power of Buyers
The final purchasers of merchant services play a critical role in the internal competition in the merchant industry competition. The buyers are price takers, because they do not determine the prices of processing the debit or credit card. They are price takers. However, the suppliers, including the banking institutions, determine the price, at which consumers will obtain their cards. Buyers play a fundamental role, because the more their quantity is, the more debit cards are processed. It creates a competition in the merchant industry, because the companies fight for suppliers with the highest number of customers. The Global Payment Inc. is typically not affected by the buyers bargain power. It only affects the industry, in which the Global Payment Inc. has dominance (Borowiecki and Siuta-Tokarska). There are other services, involving visas and master cards, that the Global Payment method has a direct contact with the buyers. Such services depend on the service delivery; if a company delivers satisfactory services to its consumers, it will attract more clients than its rival companies. The bargain power of buyers plays a critical role in industries that offer commodities and goods that have a higher consumption rate. In terms of the service delivery, the bargain power of buyers is a bit diminished and may have little impact on the internal competition within the merchant services industry.
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Threat of Substitution
The merchant services industry is a unique industry in that it is established along a particular product line. It implies that companies in this industry provide same goods and services, but in a given, way that would attract more customers. Substitute products and services may not receive much recognition in this industry, because substitute services are marginalized. The Global Payment Inc. is a major force in this industry. Hence, its dominance may not be affected by the introduction of substitute services within the industry. There are substantially great services that can be substituted in this industry. Hence, the substitute services are not a threat to the existing companies within the industry. The internal competition is only influenced by the quality of services delivered by different companies. Through its strategic management system, Global Payment Inc. has established a method, by which its clients would file complaints or recommend certain practices that can add value to their service. Such initiative has improved the company’s performance over the years in a very competitive environment. The other businesses in the industry have also diversified their services in different channels aimed at improving the state of the enterprise. All these initiatives promote the internal competition within the industry; these techniques act as substitute services provided by the company. However, they have a minimal impact on the internal competition among firms in the industry (“Medicare’s Step Back from Global Payments — Unbundling Postoperative Care”).
Internal Competition within the Industry
The internal competition within the merchant services industry is divided into two categories. There is the competition between the top companies and the competition among other businesses in the industry. The internal competition is influenced by several factors as outlined by the Porter’s Five Force Model. The competition among the top companies is based on the number of clients reached and revenue received in a financial year. The companies compete to attract more customers through the quality service delivery both regionally and globally. Global Payment Inc. is a worldwide organization that spreads its services to about 29 countries globally. The firms in this sector do not have the same global presence enjoyed by Global Payment Inc. Hence, the internal competition among these companies is reduced. The other companies compete locally to attract the local markets that are covered by the large companies. Global Payments Inc. enjoys a wide variety of the client base that depends on its structure, well-delivered products and services (Foxall 13). The competition in this industry influences a considerable amount of its operations. However, it does not mean other companies have no market dominance. The companies have a substantial market dominance, but not as consistent as the Global Payment Inc. The industry is highly competitive; hence, any mismanagement or dissatisfaction of consumers can lead to the company losing its market dominance to its rivals. The merchant services industry is rather open; hence, entry of any new corporation is a source of the competition to the already established businesses in the industry.
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Current Strategic Challenges
The current Global Payments Inc. strategic challenge is money laundering through the cybercrime. Many cases of cybercrime affect the operations of the Global Payment Inc. The reason for this is because the identity theft is common, hence tracing and identifying cases of the identity theft is a challenge that the company is looking forward to overcoming. Through the cybercrime, individuals can crack systems and obtain the information about clients. The data is then used to produce debit and credit cards with the customer’s information. Then, criminals proceed and withdraw a considerable amount of money using the generated debit card. The company is currently dealing with this issue in order to come up with amicable solutions that would be used to stop such practices.
Banks and other financial institutions give the Global Payment Inc. a direct competition. The company faces a stiff competition from banks and other financial institutions that provide the same services like those supplied by the Global Payment Inc. It is a strategic challenge, because influencing customers to abandon banks and use another modes of payment is not easy. It requires more investments in advertising agencies that may undermine the revenue collected. The banks have also launched similar services in the online platform; it provides a technical weakness in the merchant service industry. The company is differentiating its products and services to counteract the competition with other financial institutions or banks.
The market expansion to developing countries is a significant current strategic challenge affecting the merchant services industry. The company is slow to explore or increase its presence in the developing countries. It is because the developing countries have not fully embraced their products and services. The economy and economic market of the developing countries are not entirely established. However, the banking institution in such countries offers the services provided by the Global Payment Inc. The company has a strategic plan of making acquisitions in such areas that have not been fully reached (“Global Payments Inc Quarterly Report”).
Strategic rules and regulations by governments may pose a threat to Global Payments. The strict rules and regulations minimize some of the products’ activities and advantages that the company may put in place. Some states charge high taxes on such activities. The government has also brought in place strict measures to ensure that their citizens are not exploited. However, such rules also undermine the freedom of doing business in the industry. Some of those laws are completely irrelevant to the industry, because they never protect the clients nor advance the industry.
The company should make more acquisitions, especially in the developing countries. There is a ready market for the developing countries that the Global Payment Inc. can capitalize on to generate more revenues. There is a rising competition from the USA, Brazil, as well as the Asia-Pacific region countries. Merchant services companies are slowly flooding the market, hence increasing the level of competition in the industry (Hager and King 16). By reaching out to other countries, such as the developing ones, the company would ensure that it brings more revenue to its portfolio. The future market is within the developing countries; the company should embrace this market sufficiently. The developing countries have a potential market for global devices such as PayPal, Visa and Pioneer. The Global Payment Inc can take the advantage of such opportunities and increase its market presence in the region. It would improve its capital base and ensure it remains as the undisputed leader in the merchant industry.
The diversification of products and services is crucial; thus, the company should further ensure that its products and services are completely diversified to tap into the ready merchant services market. There is a high demand for the specialized services within the industry globally. The company should invest in diversifying its services in other sectors, which include learning institutions and hospitals. Clients would be able to use their services at their time of need. The company should also synchronize its operations and services with those of other banks to enable them to develop a symbiotic relationship with the banks. The Global Payment Inc. can also acquire certain banks through acquisitions. It would reduce the level of competition within the industry and increase its capital and revenue base. The company should also revive its strategic plan to accommodate banking services as a unique line in the production of goods and services.