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Essay: Goals, values, competitive advantage of PayPal Holdings, Inc

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  • Goals, values, competitive advantage of PayPal Holdings, Inc
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Abstract

This essay evaluates the goals and values of PayPal Holdings, Inc. an American company operating a worldwide online payments system that supports online money transfers. It outlines the role of strategic business management and analyses the impact of internal and external factors on management. It also evaluates its competitive advantage and goes further to suggest some ideas in order to not only maintain advantage. Finally the essay discusses how the environmental factors that affect strategic business management and planning can be tackled

Task 1

1.1 Evaluate processes by which organizations identify their goals and values

Organisation goals are deliberately set targets that framework expected outcomes and guide representatives’ endeavours. It is initiated to accomplish a coveted condition of benefit and achievement. Organizational goal is used to give guidance to staff of the company. These goals are put in place by the management of the company. These goals are usually embedded in the mission statement of the company, in the vision of the company and in the business plan of the company. The top management of the company are in charge of making the long term goals also known as strategic goals. Mid-term goals such as annual budget are set by middle managers while day to day activity goals of the company are made by lower level managers.

Organisational values are the centre morals or standards of the organisations, which the organization will comply with, regardless. It is a set of convictions and qualities that decide how workers act, how the organization treats its workers, and what the workplace is like. It is the manner in which we impact, how we interface with one another, and how we cooperate to accomplish results. It is what drives our behaviour in the work place. The leadership of the organisation is in-charge of setting and modelling the values of an organisation.

PayPal Holdings, Inc. a company founded in America with offices in many nations, I work as a trainee, we are into online money transfer. Our goal is giving basic, cheap, safe, dependable monetary services and computerized payments that empower the expectations, dreams and aspirations of lots of people around the globe. The goal is also to bring about equality in monetary services, with the goal that overseeing and moving cash is a privilege for all everyone, not simply for the influential. Some of our values are Honesty, trust, teamwork, empathy, accountability and the will to be the best. The goals and values was arrived at after considering where we are, where we want to be, how to get there, the best way to get there and how to ensure we get there.

1.2 Discuss the purpose and role of strategic business management and planning in an Organization

We previously discussed the goals and values of a company, we must also familiarize our self with how strategic management and planning can help achieve these goals. Strategic management and strategic planning have different meanings.

Strategic business management suggests a flood of decisions and moves made by the top level directors to accomplish company objectives. It weighs on delivering vital outcomes, new markets, new items and new innovations. It involves distinguishing moves to be made, the people who will carry out the activities, the perfect time to carry out the activity, the best approach to carry out the activity.

Strategic planning decides the destinations and considers both inward and outer condition to configuration, actualize, break down and change the procedures, to increase upper hand. Long term activity which has a tendency to decide the company system and used to set needs. It is not action oriented but theoretical.

Strategic management and planning helps this company where I work, PayPal Holding Inc., to envisage a large picture objectives and overall dreams. It gives a general time span, a timetable and an arrangement for progressing development. It also helps in team building, because it is a vital apparatus for uniting the group and spurring us to work together and it helps us to gauge our progress.

1.3 Evaluate the classic and contemporary models used in developing business strategies and plans.

As discussed previously, strategic management and planning is more or less the foundation of a company performance and progress. In developing strategies and plans, we must put to consideration the long term goals, dissecting the most vital issues that the plans needs to address. It involves us prioritizing, organizing and analysing feedback after implementation.

There are plethora of classic and contemporary models that are efficient, but every company must choose the model that suits them. For example; in the case of PayPal Holding Inc., these were the models followed in developing our business strategies and plans.
Models used in developing business strategies and plans

Figure 1

  • Basic strategic planning model: We identified our purpose, approaches and action plan
  • Issue based strategic planning model: This model involved execution, establishing budget, and carrying out a ‘SWOT Analysis’ (strength, weakness, opportunity, threat)
  • Alignment strategic model: Here we adjusted our company’s mission and resources so that they can align
  • Scenario strategic planning model: At this stage we outlined some events that could occur and affect the company positively or negatively and how we will respond when these event becomes a reality
  • Organic strategic planning model: This was the final model and we clarified our goals, values and culture and reflected on actions to achieve our vision. This model is continuous and always updated

Task 2

2.1 Analyse ways in which the internal and external environment can influence organizational management and planning strategies

We have earlier been able to successfully discuss strategic management and planning and the different models involved in developing it, we must also know that there are different environmental factors that influence it, these factors can be internal or external.

In the case of PayPal Holding Inc. some of the internal and external factors that affect our management and planning strategies are:

External Factors Environmental Factors

Figure 2

Economy: We cannot control the economy of the world or nation so must adjust when the economy goes up or down, during inflation, deflation or recession. As PayPal is into financial transfer, a major economic factor that affects us is the obdurate rise and fall of exchange rate

Competition: Our services is not unique to us, there are other companies that also engage in online money transfer, so there is bound to be competition. Since we cannot control what they do, we always try to adjust our strategies in other to be distinguished.

Customer: Customer’s behaviour cannot be controlled, and highly unpredictable. Their wants and desires change all the time. Thus, we always adjust and adapt to be able to meet up with these new demands in other not to lose them to competitors.

Political: Most times new government policies influence our planning. For example the government of United States can decide to enforce a legislature for the lessening or increment on spending and money transfer. This will obviously make us adjust our plans and strategies. Also we are affected by foreign trade policies since we deal with different nations, we must not forget political instability.
Internal Factors Environmental Factors

Figure 3

Leadership: The leadership of PayPal Holding Inc. is very strong and so are able to make clear decisions and visions. They are able to build good management structure and inspire employees and we as employees are able to achieve goals.

Financial factor: Sometimes our company management is affected by current financial structure. For example, when there is limited cash we cannot employ more staff which can stunt our growth

Mission statement: In PayPal Holding Inc. we have a clear understanding of our goals and purpose and actions we need to take to achieve it. Our mission statement is to ensure equality in monetary services, this has been inculcated in all the staff and so everyone works towards it.
Employees: Dissatisfaction among employees can influence management and strategic planning. So to get positive influence PayPal Holding Inc. ensures that employees are motivated, empowered and there is clear communication.

2.2 Discuss the influence of organizational governance requirements on management and planning strategies

As earlier discussed, different factors can affect a company’s management and planning strategies and these factors can be from within the organisation and from outside the organisation. One major factor that can also influence management and planning strategies is the company’s governance also known as cooperate governance.

Corporate governance is the arrangement of guidelines, practices and procedures by which an organization is coordinated and controlled. It involves the interest of everyone who has a stake in the group which include investors, administrators, clients, providers, lenders, government and the community.

The corporate governance requirements adhered to In PayPal Holding Inc. are, we must have a review board, which must designate, assess, manage and control the activities of the organization’s evaluating firm. In addition, every money related exposures must agree to the law and reasonably speak to the organization’s condition,

We are lucky to have an able, profoundly drew in and free Board of Directors who considers corporate governance very important. This is to ensure that management is responsible to the Board and that the Board is responsible to investors, it protect shareholders rights and treats all investors fairly, it ensure precise revelation on every single material issue, including the money related circumstance, execution, proprietorship and corporate administration.

2.3 Evaluate the classic and contemporary models used in developing business strategies and plans.

As discussed previously, strategic management and planning is more or less the foundation of a company performance and progress. In developing strategies and plans, we must put to consideration the long term goals, dissecting the most vital issues that the plans needs to address, prioritizing, organizing and analysing feedback after implementation.

There are plethora of classic and contemporary models that are efficient, but every company must choose the model that suits them. For example; in the case of PayPal Holding Inc. these were the models followed in developing our business strategies and plans.
Models used in developing business strategies and plans

Figure 5

  • Basic strategic planning model: We identified our purpose, approaches and action plan
  • Issue based strategic planning model: This model involved execution, establishing budget, and carrying out a ‘SWOT Analysis’ (strength, weakness, opportunity, threat)
  • Alignment strategic model: here we adjusted company our mission and resources so that they align
  • Scenario strategic planning model: At this stage we outlined some events that could occur and affect the company positively or negatively and how we will respond
  • Organic strategic planning model: This was the final model and we clarified our goals, values and culture and reflected on action to achieve our vision. This model is continuous and always updated

Task 3

3.1 Analyze ways in which an organization positions itself to outperform its competitors

As previously discussed, we cannot control what others who are in the same business or services like us do, but we must always try to adjust our strategies in other to be distinguished. Some strategies PayPal holding Inc. has adopted to outperform our competitors are:

Pricing: This involves offering lower prices for services than our competitors while maintaining a high quality.

Invest in employees: This involves a competitive pay, ensuring job satisfaction, encouraging work-life balance. This makes employees perform at their very best.

Untapped opportunities: Our ears are always on the ground to seek and find new opportunities, emerging markets, new set of customers, new places to introduce our services and expand.

Mentorships: Ideas are gotten from past leaders and leaders from companies similar to ours.

Clear and profitable goal: This involves focussing on clear needs, breaking our goals into achievable steps, avoiding distractions. Too many projects can make the company lose focus. It is simpler to outperform competitors when we are focused.

However, some more strategies can be adopted to outperform our competitors, they are;

Customer survey: This has to do with carrying out customer survey regularly in other to know our customers’ needs better than our competitors

Customer service: Offering great service to customer will bring about customer loyalty. Workers have decent comprehension of services and administrations. They are humble and give fulfilling answers to each client question.
Innovation: This involves the willingness to adjust and take risk and bring up new ideas. There must be innovation regularly in a way that the competitors discover that it’s hard to pursue.

3.2 Evaluate appropriate competitor advantage strategies for emerging, maturing and declining positions
.
Previously we discussed ways to outperform competitors, we also need to discuss strategies to competitive advantage in emerging, maturing and declining positions.

Emerging, Maturing And Declining Positions

Figure 6

Emerging industry is one focused on a new item. There’s typically very few organizations engaged with the start, so rivalry is low. In any case, expenses might be high in light of the fact that towards the begin, the item is an obscure. For example, if PayPal holding Inc. is an organisation in an emerging industry, it can make it easy for us to position the company to be a leader in the industry, which is a competitive advantage. It can also us build our brand faster.

Maturing industry is an industry that has passed both the rising and the development stages of industry development. There is stability but slow or no growth is expected. Paypal Holding Inc. can have a competitive advantage in this position when the prices of its services are lowered with high quality compared to other companies. Providing customer satisfaction can encourage customer loyalty and more regular transactions, thereby giving us a competitive advantage.

Declining Industries is when growth is going downwards or it is stagnant, this decline is caused by plethora of reasons examples are reduced demands for services or the emergence of many better substitutes. One strategy PayPal Holding Inc. can use to maintain competitive advantage in this position is to capture the other companies left.

Task 4

4.1 Discuss how emerging global issues can impact upon the strategic management and planning activates in an organizations

Previously we have successfully analysed various factors that affect organisational management and planning strategies, and also highlighted was to maintain competitive advantage, however, we must not fail to discuss the impact of global issues on the management and planning activities of a company, some of these global issues that have been observed to influence the management and planning of PayPal Holdings Inc. are,

• Emerging Markets

• Technology

• Population

• Climate change

• Demographic

Emerging markets involves a power shift, for example, there is currently an economic power shift from developed countries like America to developing countries like India due to their population and new ideas. This creates a global competition. This can make big companies to want to move from established countries to these developing countries where there are emerging markets. These movement can instigate government to reduce tax in other to discourage these companies from moving.

Technology advancement includes advancement in research and development, mobile technology and nanotechnology. This creates more competition. Adopting technology in business is no longer just an advantage but now a necessity and priority. At PayPal Holding, Inc. we endeavour to keep our software up to date to avoid being seen as old.

Population is a major global issue affecting planning strategies, cities with more residents will have more effect on countries because of their size. As cities grow, there will be more need for assets, resources, job security and job openings.

Climate change involves increased extreme weather conditons. This weather change can lead to resource scarcity, thereby, causing conflicts. Also because of climate change, government more regulations to ensure sustainability

Demographic has to do with life expectancy, birth-rate. For example, most big cities experience their population growing older, it is more difficult to employ talents, most times tax rate is increased in other for government to cater for the elderly. Workers are sometimes made to learn new skills.

4.2 Evaluate the impact of stakeholder interests in shaping strategic management and planning activities in an organization

I have earlier discussed how global issues affect management and planning, however, we must also see how stakeholder’s interest can impact management and planning.

I earlier highlighted he different stakeholders of an organisation. They are management, suppliers, lenders, employees, community, investors, government, and customers. Some are part of the business, while others are influenced by the business. They are Individuals or associations with an interest in an organisation’s given circumstance, activity, or project.
Stakeholders

Figure 5

They have something to gain or lose, and that is why their interest must be considered when taking decisions. Because of the size of our organization, and also the idea of our business, PayPal Holdings Inc. stakeholders have a lot of interest and demands. We always engage all stakeholders in other to get feedback, which makes us understand their needs, interest and desires. There are different mechanisms we use in getting these feedbacks depending on the stakeholder; for example, we discuss with supplies to get feedback from them, we send questionnaires to customers to learn about their interest, we carry out road shows in other to engage our community and managers engage us the workers to understand our needs.

Considering stakeholders have shaped the planning strategy of PayPal holding Inc. for example, before any change is made, It will be announce to everyone what is going to happen and the consequences that follows it, suppliers will be told what to envisage, lenders will be informed about new acquisitions.

There is need to identify all stakeholders demand then consolidate it into the company’s plans. In PayPal Holdings Inc. it encourages trust and loyalty. It builds the company’s reputation. Engaging stakeholders has also helped inspire more innovations, increased outputs, given more asses to resources, increased competitive advantage.

However stakeholders interest also have negative impact sometimes on management and planning strategies, for example decision making takes longer time.

4.3 Analyse ways in which organizations respond to environmental factors, when making strategic plans.

Making strategic plans is an essential part of a business and previously stated on in this essay, I have also previously stated that analysing the environment before making business plans goes a long way to determine the success of the plan. Also i discussed some of the environmental factors which are either internal or external like economy, politics, competition, customers, employees, money and mission statement. However we must discuss how businesses can respond to these environmental factors.

Some ways companies can react to the environmental impact on operations while making strategic plans are

Competition: Companies can react by reducing prices to attract customers, do lots of adverts, make their service very clear, and have a better deign. PayPal Holding, Inc. reduces service and transfer charges so that processing a transaction will be inexpensive and affordable, accepts all credit cards and provides a free mobile app, all these help us to gain competitive advantage.

Technology: companies need to ensure their hardware and software are updated always, improve on research and development. At PayPal we respond to technology influence by making sure our software is updated, we also adopted automation in some of our departments and invest a lot of resources on research and development.

Economic factors: organisations should borrow less when interest rate are high and borrow more when interest rates are low and this is work we have adopted at PayPal Holdings, Inc.

Conclusion

In conclusion PayPal Holdings, Inc. organisational goal is used to give guidance to staff of the company while Organisational values are the centre morals or standards of the organisations. Strategic management and planning is needed to achieve these goals, however, different environmental factors influence it, these factors can be internal or external, governance of the organisation or interest of stakeholders. There are strategies the company has adopted to face these factors that influence strategic management and to tackle them, in other to reduce its impact. Our strategic plans are adjusted most times in other to outperform our competitors and gain competitive advantage, however there are more strategies to embrace in other to maintain our competitive advantage.

20.10.2018

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