PayPal is market leader in online peer-to-peer payment. To expand its business to retail in-store payment, PayPal acquired a small existing company: iZettle. This moves is part of firm’s corporate strategy.
Corporate strategy is a firm’s theory of how to gain competitive advantage by operating in several businesses simultaneously.
- Jay B. Barney and William S. Hesterly. Strategic Management and Competitive Advantage: Concepts and Cases. Pearson Education Limited 2015
iZettle is to fill the gap of current PayPall business. Though only has 500.000 small business customers, iZettle will expand PayPall service to retail off-line merchant. This Swedish payment company offer a simple point of sales payment solution with a small equipment and less cost –which is their differentiation from its rivals.
The size of expected payment settlement by PayPal far away ahead iZettle. It is only a small size company to PayPal, but the acquisition worth 11x projected 2019 revenue. Acquisition of iZettle by PayPal is to gain access of complimentary payment services. Most likely, PayPal will introduce additional off-line payment service to its 19 billion users.
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