(b) Recommend approaches to mitigate the risks you identified. Identify one strategic risk that is common to both companies. (Mastercard and Visa) Contrast the different ways both companies address this risk.
(c) Determine which company’s strategy is more likely to be successful, and state the rationale for your decision.
(d) Based on your overall assessment in this memo, focusing on the strategy and the strategic risk posture of the firms, should the Pierre Group complete the acquisition of Mastercard, Visa, acquire both companies or neither. Why?
Answer preview
The company has an opportunity to expand its operations across borders including in China. The connected devices and mobile operations have increasing popularity, and the company can explore blockchain and crypto technologies (Ehrlich, & Del Castillo, 2020, September 23). Major threats for Visa are fraudulent activities and security breaches.
Key Strategic Risks and Implications
Security breaches are the priority risk for Visa in exploring its expansion strategy. Sharing intelligence with our partners in the global network raises major concerns on the achievement of secure and seamless payment experiences. This risk hinders the exploration of all available opportunities in the market.
The second risk is an increase in the credit losses following COVID-19. The Prolonged COVID-19 pandemic is a major disruption in the history of the credit card sector. Global recession and change in customer behavior impact different aspects of the company.
