International Business Strategy


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Credit card services have become a major option for doing business. The ease of money exchange while avoiding carrying bulky has earned the system a good name in the business world. Again, people can buy on credit from the sellers and the money later refunded back to the individual’s bank. Growth in the credit card industry has gained momentum in the last half of the twentieth century, making it more attractive to business people (VISA, 2004). Despite this success, credit cards can be accused of encouraging majority of their holders to use more than they have actually planned for.


VISA card is an innovation of 1958 by a Customer Service Research Group led by Joseph Williams. In its inception, was known as Bank of America card, and was in the colours of gold, blue and white. This invention caused anxiety both within and outside the organisation that the bank founder himself was more inspired to support the credit card (Chutkow, 2001). The middle class were first targeted with the pilot program first being done in Fresno California (Brooker, 2004). The amount of credit purchases has grown tremendously over the last few decades standing at $ 59 million in 2002.

VISA was selected as brand name since it was short, easy to recognise, showed essential traits of travel, mobility and acceptance. It is from those characteristics that VISA emerged as the brand name and was widely recognised as having succeeded (Chutkow, 2001). In 1988, Berry, Clark and Lefkowith made an examination on four categories on how to acquire brand names for service industry. The four areas tested were; remembrance of the name, distinctiveness, relevance, and flexibility of the name. These helped derive the VISA name.


Success of the VISA card as well as the industry in general, is one that has been driven by innovations though they have faced bigger challenges in trying to convince potential customers of their viability in trade. VISA uses revenue to determine their success and despite the fact that low revenues and sometimes losses were incurred, the pickup of the company has been generally encouraging. Revenues have grown from a loss of about $ 20 million to billions of dollars in the current times]. The business has opted to partner with firms such as banks a relationship that has now become the foundation of the credit card service industry (Berry, 1988). As par 2012, the market share of the VISA card company was the largest in the US at 47% followed by MasterCard at 27%. However, the industry as a whole has experience tough challenges due to fraud with banks loosing an estimated $288 million.


Cost Leadership Strategy

In the generic strategy, the aim is to produce high quality at low cost products. While some of its competitors such as MasterCard have lowered their prices to make an increase in their market share, VISA card has adopted a different strategy where they operate at average prices thus making higher profits than these competitors. They then use the revenues that they acquire to improve the quality of their services, hence becoming more efficient.

Differentiation Strategy

This strategy ensures production of unique products that will attract customers more than what is being offered by the competitors. For instance, VISA card is highly viewed as better than other companies in the industry as it is able to provide security to its customers. Again, with huge revenues that they earn, they are able to carry on proper research and employ creative and well skilled product advancement team.

Focus Strategy

The strategy advocates for concentration in a segment to ensure the best of that segment. For VISA this is not the first time in history that focus has been done. As earlier indicated the company was at its inception part of Bank of America, but was upgraded to a company on itself so as to offer better services to the people.

Strategic Alliances

VISA card has adopted a vigorous marketing strategy that aims at maintaining their dominance in the credit card industry all over the world. The strategy encompasses different strategies for different markets around the world. However, there are those common approaches that are generally used. For instance, the company has engaged in forming partnerships with major financial institutions that operating regionally or nationally. Further, they are partnering with other businesses such as supermarkets, petrol stations and shopping malls where huge purchases are common.

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