Description of company
Square Inc is an innovative company that was launched in December 2009. Its president and the co-founder, Jack Dorsey, is also the co-founder of Twitter, a social network platform. The logic behind Square Inc. is to use paperless money as a mode of payment and transaction where every tweet would be a transaction.
The company is on the verge of changing the mode of payment in the U.S to ensure that payment is carried out through the use of smartphones (Romo 2). However, the president of Square Inc. has recently admitted that the company entered in the market prematurely.
Square Inc will ensure that payments are transacted everywhere since they are supported by android phones, iPads, and iPhones. According to the company’s president, the goal of Square is to enable customers accept payments instantly, everywhere.
Nonetheless, the company is wary of the anticipated competition from other emerging players like PayPal, Apple, and Google. The company has also devised a method of using the smartphones as cash registers whereby a squared credit card reader is connected to the Smartphone and transactions carried out easily (MacMillan 44).
Lastly, the innovative payment system of Square Inc. does not require fixed costs, hardware costs, and credit check like other credit payment systems. This makes it unique and competitive as people are on the lookout for the best mode of payment that is up to the current recession and changing market trends.
Problem definition, Goal, and Constraints
The problem is to determine whether Square Inc. is wary of, and ready to accept and face competition from other emerging companies that have adopted new modes of payments in the industry.
Square Inc. has to make sure that its new payment transaction system has no loopholes that could be used by other companies as a competitive advantage. However, their goal is to “enable people to accept payments immediately, everywhere” (Siegler 3).
On the other hand, this has not been achieved yet since the company is facing hardware shortages, although it has ordered for the parts. Another constraint facing the company is the inability to carry out transactions in the quickest time possible as some incidents of delay have already been reported to the Square management team. This problem could have resulted from its underwriting infrastructure facilities and capabilities (Siegler 4).
The company is also faced with the fear of customers caught up in fraud cases in the course of carrying out their payment transactions as this could dent their image. Although Square Inc wishes to execute a modern method of carrying out transactions through mobile phone innovations, the mode of payment faces a major blow if cheques re-emerge as a mode of payment.
The company also faces stiff competition from emerging competitors like, PayPal, Google, and Apple who could offer better modes of transactions and services than Square Inc.
Lastly, the company is constrained by its inability to handle risks associated with charge backs by determining the transactions limits (Siegler 4. This could lead to incidents of fraud and other malicious issues on the part of the users.
Analysis of possible solutions
For Square Inc. to remain relevant and competitive in the market, it has to devise solutions that will help the company to address the current problem and constraints facing it.
The constraints act as impediments in realizing the company’s goal, which is to enable payments anywhere immediately. The solutions that follow would enable Square Inc. to solve the current problems as well as allowing the company to compete favorably and effectively in the market.
Square Inc needs to develop strong encryption software that would address the risks of fraud thus promoting security (Romo, 2011). This would ensure that crime cyberspace is reduced since hackers or fraudsters cannot access credit cards in the process of carrying out transactions.
It is also supposed to create awareness to its customers on the need to secure their phones and passwords as fraudsters could take advantage of their carelessness to commit frauds. The company has to address the issue of the hardware shortages by importing or finding a reliable supplier who will address the increased demand by Smartphone users.
This would ensure that customers are not swayed away by other payments providers like the NFCs system of Goggle or PayPal.
Customers have already filed complaints, and the President of the Square Inc has also acknowledged that there have been delays in carrying out transactions. The company needs to view the causes for delays during transactions immediately before consumers lose their loyalty towards the brand and adopt other modes of payments.
Square Inc needs to improve its underwriting infrastructure facilities and capabilities to a competitive edge. This will increase its competence and the speed required in financial transactions. Technology improvement is the core solution to the problems facing Square Inc. Therefore, the company needs to address its problems before entering the market with full force.
Lastly, the looming problem facing Square Inc. is the emergence of other rival companies who are bound to introduce competitive rivalry through perfect substitute products. The company can operate at low costs by minimizing the transactional costs.
This would create a competitive advantage to the company, thereby increasing its profits margins. Through marketing methods and structures, Square Inc. can make the new mode of transactions acceptable by its customers and other people who posses Smartphones or are willing to adopt one. This would ensure that it gains adequate market share, making it competitive.
Recommendation that need to be adopted
Based on the analysis of the problems, constraints, and the available solutions, it is recommended that Square Inc. adopts all the solutions because they address all the issues currently being experienced. No problem should be taken for granted as a single mistake would affect the customers affecting their loyalty.
Other than solving the problems, it is recommended that the company adopts a more efficient and the latest technology accessible to all customers. With competition increasing in the industry, Square Inc could operate under economies of a scale after reducing the transactional costs.
This would ensure that the company remains relevant and that it realizes its competitive edge. Square Inc has the capability of turning the whole industry into a technological hub. To retain its capabilities, the company needs to devise a means of improving its software and hardware to meet the changing consumers’ demands and the markets trends caused by technological advancements.
In conclusion, although Square Inc seems to be the latest option that will change payment transactions, the company needs to address all its problems in advance. This will ensure that it remains relevant in the market as it competes favorably and effectively.
Works Cited
MacMillan, Douglas. Turning Smartphones into Cash Registers. Bloomberg Businessweek, 2011. Web.
Romo, Venessa. Square Businesses ‘Square’Away Client Bill Pay. 2011. Web.
Siegler, Michael. “Square Delays Mass Roll-Out, Admits They Began Before Things Were “Fully Baked””. 2010. Web.