Strategic Management- Case of MasterCard Incorporated
Introduction
It was in the year 1966 when the idea of MasterCard came into existence, by a group of bankers who decided to invent electronic money as an alternate to the use of cash. They gave origination to this new company “MasterCard”, which launched debit cards and credit cards as introductory products. This is to make users understand the very new electronic payments and transaction services (Reuters, 2015). The idea flourished with time and made MasterCard get recognized both locally and in the international domain. It took years of struggle to earn this much of recognition by MasterCard.
Using the test case of MasterCard, this paper is analyzing the process of strategic management, applied in an organizational setting. The aim in here is to evaluate the ideas and concepts of strategic management widely adopted in the contemporary business practice. How strategic management strengthens a business organization for its growth is the question to address in this study.
Critical evaluation of the strategic management process applied by MasterCard
Strategic Culture- Evaluation
Behind every effective strategy there lies a strategic mind, a mind that is genius enough to see the future (Kote, 2011). This is what the business scholars say that strategists are always familiar to their future. They are toned into the future and works in accordance of how future unveils to them. CEO Ajay Banjay at MasterCard comes out with the same strategic approach (Hill & Jones, 2008). He is sharp and vigilant enough to see of what is indeed to come. Starting from the top the same proactive approach goes down to planners and executors at MasterCard, which forms a complete strategic culture in the organization. This culture is composed up of diversity, inclusion and concordance that guides the whole organization for effective strategic planning and execution (Cole, 2003). It is not wrong to say that MasterCard strategic process begins at this very culture. The team of 4,600 employees is part of this inclusiveness. Whatever the strategy of MasterCard is, comes from this very persistent and future-enabled culture. In this way, leadership is the starter and culture are the catalyst for MasterCard strategic management process (Reuters, 2015).
Strategic Capability - Evaluation
In 2008, MasterCard revealed itself in the New York Stock Exchange. It was an emblem of initiating success, not only for MasterCard stakeholders but the entire MasterCard community. The year brought new things for the company and its organization. One of it was initiative taken by the leadership to make MasterCard a public corporation. This was a strategic move, important and compulsory to make the organization change its strategic condition. What was needed is the support from all the stakeholders, in which users are the most important one. A plan was set to communicate this vision of MasterCard as a public corporation to all the stakeholders. They included employees, investors, stock members and MasterCard users who are going to be consumers in the next level of MasterCard Worldwide. It was a first stage of transition, which MasterCard experienced, in this strategic year of business. The next phase was very obvious in which MasterCard was a global leader, a brand that has global recognition (Kote, 2011).
Authors in strategic management keep a common and a very precise view of strategic enterprises that such enterprises keep on changing their strategic condition. Every strategic enterprise is endless with its motion, which means that it keeps on changing its phases, its situations and its pool of business of where it has to reside. This means that a strategic enterprise is quite natural to expand with its ideas and with its segments of the business. The same is what could be observed in the MasterCard case, a firm who from its level of a small-medium enterprise changed itself totally as a global brand (Bajaj & Martin, 2010). There were some risks in between but as being strategic enterprise MasterCard coped with all those risks that came into the middle. The organization was endless with its pace as it is today to fight all the challenges. In the expansion, there were some obvious risks that MasterCard had like of new competitors, losing local shareholder’s interest, varying consumer thought, technological variance, etc. But, with all these shortcomings, the organization led with discipline and patience that won it the place it needed. The evaluation of its strategies tells that MasterCard powered itself with its effective and lasting strategies. They were lasting for MasterCard as a public corporation and for MasterCard becoming an international corporation (Cole, 2003).
Strategic Achievements - Evaluation
MasterCard establishes a vibrant and transparent knowledge-network that not only guides the investors but give merchants a real chance to explore (Birchall & Tovstiga, 2005). The best in place consultancy service is from the MasterCard knowledge network, which is a network of specialists who bring knowledge into best use. Using enhanced consumer data, the network guides merchants on new market trends and industry changes, giving them a reason to invest and to establish a business. The information is on consumer behaviors, their changing needs, and demands, making possible the mergers and acquisitions that are dependent on such information. MasterCard gives investment advice in e-commerce, retail, food, transportation, fuel and manufacturing sectors, which shows how much strong and capable knowledge-network it has established in years to come (Reuters, 2015). The evaluation indicates that strategically MasterCard has achieved a lot in the years of its business. It not just a card payments company now, but a complete global adviser due its strategic worth standing (Akio, 2005).
Analyzing theories and perspectives of corporate strategies used by MasterCard for growth
In 2008, when MasterCard announces itself as a public corporation brought forward its plan for the future. This was the master brand strategy, which with the help of FutureBrand, MasterCard revealed to its partners and community (Cole, 2003). What was needed was the trust of the partners to prolong the strategy and its future dimensions. It was named a master brand strategy but was MasterCard’s corporate strategy to track its existence in the future and the coming tomorrow. The strategy meant to change the corporate identity of MasterCard, the corporate existence of MasterCard as a whole, not only in the US but outside of it of wherever MasterCard could exist (Gold, 2013).
The year 2010 shaped MasterCard as a global brand. The company came out with its payment strategy that was another face of its overall corporate strategy. The strategy referred to an idea in which MasterCard is the way forward to businesses. All consumer industry brands took the MasterCard way for their transactions and payments processing (Kote, 2011). MasterCard sold their payment strategy by becoming a natural partner of the e-commerce merchants. Now it was something more than just cards payments, MasterCard became an adviser to all. Competitor strategy is another dimension of MasterCard’s corporate strategy. The company innovated its products to compete its direct rivalries such as VISA, American Express or UnionPay. Using Target Corp for assistance, MasterCard secured its user data, assuring its place among competitors. So the overall corporate strategy of MasterCard triggers with three different strategies, where each one of it works to maintaining the balance (Kote, 2011).
Cole (2003) asserts that competitive advantage is restored if an enterprise can bring a competitive strategy in place (Cole, 2003). The strategy itself is a resource as it could lead the organization to success. MasterCard with its corporate strategy not only assured its progress but also got a reason to compete. The evaluation of the case tells that MasterCard corporate strategy was a progressive one, it was a strategic mix with three effective and very powerful dimensions. After all, it was this corporate strategy that earned MasterCard the years of progress and succession (Birchall & Tovstiga, 2005).
Applying problem-solving approaches of strategic management- Planning of the Learning Event at MasterCard
It was May 2008 when MasterCard leadership planned a new event in the organizational scope. It was an event of collaborative learning in which all 4,600 employees were called off in 110 workshops, to be organized in 36 different destinations. It was the future roadmap that was about to be presented in the workshops, in order to get support needed from the soul members of the organization for the future way forward (Birchall & Tovstiga, 2005). The responsibility was given to Ray, the company’s senior vice president of global learning at that time. What was needed was a problem-solving approach by the president and pro-activeness to organize and manage the event on time. Here are few steps that could have organized and managed the event successfully (Evans, 2013).
Declaring the Event
MasterCard is from now on a public corporation where our mission is to take it to a level of MasterCard Worldwide, a global brand (Evans, 2013). We are collaborating our workforce to show them the light of the future and to discuss with them the challenges that will be facing in this transition period. The Universal Opportunity, How We Will Fund and what is the New Culture are three faces of this event, which will tell of how and why MasterCard is moving to its transition. Employees role is to learn from each possible session, where managers are in charge of conducting these sessions successfully and to their purpose (Hill & Jones, 2008).
It is to make sure that the event is spread over 36 different locations of MasterCard. This means 36 organizers will be organizing their locations on time and with objective care. Rebecca Ray is going to pass the instructions on how and which locations are to be organized. The plan is to complete the event in three weeks time with an aim to keep each session of 5 working hours (Reuters, 2015).
Execution
The event will tell our partners our goals and ambitions for the future. What we are going to do and achieve is all revealed in this very event. All is to be shared with our collaborative partners, that MasterCard Worldwide is a leader in itself. Consultancy is our next big achievement after we have achieved glory in payments and transaction services (Evans, 2013).
Reassessment is the last phase that will bring assurance that the event is organized well and is carrying best results (Cole, 2003). The possibility of failure is there if the message is not conveyed to our collaborative partners like they don’t know, even after attending 110 workshops, that where MasterCard is going or leading to. The event will be a natural success in both shorter and longer run, if all the stake partners are well aware of what MasterCard is becoming and where it is leading (Evans, 2013).
Conclusion
The evaluation of the MasterCard case tells that strategic management is quite a natural practice in modern organizations. To compete in the future and at the global level, it is important that strategic management is applied in the organizational setting. MasterCard with its strategic principles and approaches earned progression. With strategic valuation, MasterCard achieved not just growth but a name that was remarkably true for its existence.
List of References
Akio, T., 2005. The Critical Assessment of the Resource-Based View of Strategic Management:The Source of Heterogeneity of the Firm. Ritsumeikan International Affairs, 3, pp.126-48.
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Birchall, D. & Tovstiga, G., 2005. Capabilities for Strategic Advantage: Leading Through Technological Innovation. New York: Palgrave Macmillan.
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Evans, V., 2013. Key Strategy Tools. London: Pearson.
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Hill, C. & Jones, G., 2008. Essentials of Strategic Management. Boston: Cengage Learning.
Kote, N., 2011. The Strategic Mind. what does it take? Bloomington: Xlibris Corporation.
Reuters, 2015. MasterCard Inc. [Online] Viewed at: <http://www.reuters.com/finance/stocks/companyProfile?symbol=MA.N> [Accessed 16 June 2015].
Trefis Team, 2014. Growth In Volumes And Transactions Lift MasterCard's Income. [Online] Viewed at: <http://www.forbes.com/sites/greatspeculations/2014/11/05/growth-in-volumes-and-transactions-lift-mastercards-income/> [Accessed 16 June 2015].
