Sample MCRIT010 Innovation and Commercialisation in IT Report 3

MCRIT010 Innovation and Commercialisation in IT Report 3 Sample

This is a case study of a well-known international brand. Students will apply the knowledge and skills on Innovation and Commercialisation in IT, from the weekly topics to the four questions based on the case study provided.

Word Length: 2,000 words (+/- 10%)

There are four questions. Each question is of equal value that is 7 1/2% each. Therefore, the word length for each question should be approximately 500 words each, to ensure the depth of answer to each question.

Formatting: Use Arial or Calibri 12 point font. Single or 1 1⁄2 spacing. The structure of the case study report is a title page, the questions as headings and answer the questions, then a reference list page.

Questions

Question 1) Disruptive Innovation

The case study refers to After Pay as a Disruptive Innovation in the finance industry.

(a) Do you agree with the analysis, why or why not?

(b) In your answer provide a definition and description of Christiansen’s Disruptive Innovation.

(c) How might traditional banks have used Disruptive Innovation to innovate their own fintech products?

Question 2) Timing of Entry

The case identifies Pay’s first mover status in the Australian buy now pay later (BNPL) market.

(a) How was After Pay different to previous buy now pay later products in Australia, to be called a first mover?

(b) What are the advantages for After Pay to be a first mover, what are the disadvantages?

(c) Is After Pay able to maintain its competitive advantage from fast followers or do fast followers have an advantage over After Pay?

Question 3) Innovation Strategic Direction

(a) Evaluate After Pay’s strategic direction in the BNPL later fintech industry using Porter’s Five Forces.

(b) Apply the Blue Ocean Strategy Eliminate Reduce Raise Create (ERRC) grid to After Pay, to evaluate their Blue Ocean Strategy. Use this ERRC grid to draw the Strategic Canvas for After Pay with the competitors as the traditional credit card companies.

Question 4) Future of After Pay

(a) This case study is the situation for After Pay in 2020. Provide an update of After Pay’s since 2020, referring to how they performed during and after COVID-19 lockdowns in Australia.

(b) What has been the impact of recent regulation changes to the BNPL industry on After Pay?

(c) How have they continued to innovate since 2020?

Solution

Question 1 Disruptive Innovation

A) AfterPay growing as disruptive Innovation in the Finance Industry

- The case study has referred to after-pay as a disruptive innovation in the finance industry, being one of the fastest-growing innovations commercially in today's business. Definitely, the disruptive innovation in the finance industry has transformative growth in recent times also analysed in case study review informatively. Pay Touch Group has integrated new digital platforms into the Fintech Sphere allowing consumers to experience fast services (Kamuangu, 2024). The new consumer centric approach used in business has shaped constant growth of new millennial shopping preferences.

- AfterPay as a disruptive innovation in the finance industry, claims to solve key problems with highly disruptive innovation for businesses growth domains.
Disruptive innovation has constantly risen in recent times due to highly flexible demands, leading wider vision productively on constant business work parameters. AfterPay has a huge competitive profits scope with usage and implementation of disruptive innovation growth and inclusion of sustained change parameters.

B) Christensen's theory of disruptive innovation

- Christenson’s theory for The Assignment Helpline of disruptive innovation signifies process by which products or services take root in creative applications in market. The theory determines bringing less expensive and more accessible in terms of technology brings new moves upmarket displacing established competitors' pace. It signifies relentless growth with stages: disruption of incumbent, dynamic and new rapid linear evolution, appealing convergence, and complete imagination within systems rise functionally (Christensen, 2015).

- Disruptive technology in the finance industry has shaped constant growth goals technically and enlarged varied goals for businesses today. Also, the theory states untapped new constant changes with the usage of disruptive technology growth rise, wider strengths through online systems, and disruptive innovation expansion (Christensen, 2015). The BPNL segment has risen 8% within e-commerce payment, by around a three-fold increase, and the international market expecting a rise by around 22% over five years to approx. $33 billion.

C) Traditional banks have used Disruptive Innovation to innovate their own Fintech services.

- Traditional banks have used Disruptive innovation to work within their own Fintech products, as the Fintech boom is a global phenomenon with 40% of investments rising in recent times. Fintech hubs globally including Australia's new markets have emerged specifically, bringing sustained constant growth among commercial usage. The BPNL Fintech segment within Australia expanded in 2020, with high-scale innovation and new demand-oriented investments by companies specifically (Ahmed et al., 2024).

- AfterPay has become a global Fintech giant, with a clear market leader in a rising competitive segment in recent times diversely. Customers can make purchases and pay with four equal payments, which has increased rapid demand for technology-oriented systems. AfterPay slogan “There’s nothing to pay" has dragged in a varied rise in new consumers today, stating the significance of the drastic strength rise in flexible technology systems.

Question 2 Timing of entry

A) AfterPay reason for first mover advantage

- AfterPay offers many unique features in its services from other player sin fintech business within Australia, focusing on sustainable growth market criteria and delivering best competent services. It has expanded around 50% of Australian market, requiring higher customers’ ability to have their purchase now and pay later option. It also focuses on segment, that customers without high traditional interest credit are able to make new purchases and can further have four equal payment systems (Güleç et al., 2024).

- The business model of AfterPay has flipped economies of credit cards innovatively by leading constant change, incorporating new systems of credit cards with high consumer oriented strengths. Also, through this simple product offering, AfterPay is attractive to consumers as it offers one repayment reschedule and also flat fee structure on missed payment dates.

B) Advantages and disadvantages of AfterPay first mover advantage

- The advantages of AfterPay to be the first mover are many, as company has focused on providing best user experience for people who like to spend more. It can be also highlighted that consumers with more purchasing power have been major target market, with inclusion of free credit and retailers should pay more in returns to their larger transactions.

- Advantages of AfterPay are that it is a multi-sided platform business connects to larger range of consumers, millennial using credit cards within growing market scenarios. Millennials in Australia are the most competitively growing strong market, that are rising with new purchasing power for receiving goods (Wang et al., 2024). The company boasts of new 86 million consumers and a network of 200000 merchants, rising commercial goodwill.

- However, some disadvantages are there such as AfterPay 20% of revenue comes from its late fees, signifying the company earns more from reprocessing which increases dependability. Pay shares faced a decline of 4.7% major per cent in share value after the governance firm, which has brought enlarged change dynamically. There is an error in technology, which has led to a rise in concerns regarding changing access to new pay later debts criteria dynamically.

C) AfterPay maintaining competitive advantage

- AfterPay is unable to maintain a competitive advantage from fast followers, as there is a build-up of headwinds for the company. There has been a recent striking deal with us retail giants in 2021, leading to a resurgence of share prices and varied change substantially. The company is making substantial losses, with the average revenue ratio hovering around 50 and, the technical valuation of the share price being overpriced (Ferraro et al., 2024).

- Also, AfterPay has rumours of regulation, dampening its future prospects. There are also rising global competitors entering the market all the time, thus increasing external risks for business. Investors have been impatient with lowered returns from company revenue levels, thus being highly risk for future business goals. The company has intensely disrupted the accuracy and validity of data, sidestepping credit obligations and wider loopholes raising financial stress and potentially causing losses.

Question 3 Innovative Strategic Direction

A) Porter Five Forces model

Analysis of in BNPL Later Fintech industry forces impacting AfterPay using the Porter Five Forces model will focus on identifying the company's further new business goals competitively. The major factors of the five models are as follows:

- Competitive rivalry within the industry: The BNPL market has been found to be valued at USD 30.38 billion in 2023 analysis, the market is projected to grow to rise of 37.38 in 2024 and a CAGR of 20.7% during the recent period. There is a high threat for AfterPay Company, as new fintech companies are raising revenue within BPNL for expanding best standards in consumer spending habits (W. Van Alstyne, 2016).

- Threat of new entrants: There is also a high threat of new entrants for the company, as Klama Swedish BNPL Company backed by Alibaba provides high competition within the lucrative European market. The Karma solutions company has been rising among consumers, merchants with new lucrative growing opportunities within market systematically. The entry of PayPal in 2020 has also been a threat to rapid expansion in the US within three months, raising business challenges for AfterPay.

- Threat of substitutes: BPNL players are rising today with new creative business models and higher interest towards faster consumer services exponentially. Consumers have new substitutes, thus there is medium threat of this factor for AfterPay business.

- Threat of suppliers’ power: There is less threat of suppliers, as automation and fast supply chain management sustainable factors are focused by company (Vynogradova et al., 2024).

- Threat of consumers’ power: Medium threats to this factor, as consumers have a preference for AfterPay services due to highly innovative and dynamic services.
Also consumers today further have many new choices too, which increases competition for businesses to largely focus on wider dimensions.

Therefore, a review has been informative regarding changing BNPL market domains competitively growing in market scenarios. It has also integrated new channels extensively, ideally focused on core mechanisms stating constant innovation with fintech.

B) ERRC model of blue ocean strategy

The ERRC model of Blue Ocean's strategy will focus on reducing AfterPay and will evaluate company performance with competitors as traditional credit card companies. Eliminate- reduce-raise-create grid is an essential innovative matrix tool driving companies to focus on eliminating errors and creating new blue ocean development.

Figure 1: ERRC graph, 2024

The ERRC graph has focused on identifying major dimensions on new growing and fluctuating changes rising in business of After Play, it has presented major values on larger values towards diverse changing market perceptions. ERRC graphical representation has also established focus on range, complexity, and changing demands.

- Interest rates and fees will be eliminated by company

- Traditional credit checks in reduce section, as it will curb down old technical flaws and loopholes in system

- Merchant benefits and customer convenience in raise section, are major parameters that will be raised and developed

- Instalment payment in create section, important for After pay to install new changes

There has to be a focus developed on eliminating unnecessary complexity in payment schedules, and standardized payment systems at After Play. The new online consumer engagement, digital quality promotions, and new digital quality features have to rise with higher levels of investments (Kumari et al., 2023).

Question 4 Future of After-pay

A) AfterPay conditions since 2020, performance during and after the COVID-19 lockdown in Australia

- After play platform business is highly competitive advantage turning credit traditional into new debit business, changing regulation of banks aspects variedly.
The company has charged commissions from retailers worth 6% of transaction value, charging drops of risk and price of customers providing new superior value levels functionally.

- The company has become Fintech Giant worth over $30 billion within market capitalization in 2020, signifying major new demands rising in business levels (Hughes, 2018). The After-pay condition post-COVID economic downturn can be analysed with the threat of economic downturn, being a major threat to the company's booming success levels. The company has faced high competition from various new entrants in business-changing market scenarios; consumers are highly trusting AfterPay commercial services.

- There is also attention on fact that merchants will be benefiting in recession, with excess inventory and risen consumers retailers engagement in BNPL system commercially (Powell et al., 2023). However, some major players like PayPal and Alibaba Kalma are some major stiff competitors of After Play which are rising in demand in the BPNL industry.

B) Analysis of recent regulation changes impacting business of AfterPay

- AfterPay has turned traditional credit card system into new debit appraisal service, escaping new regulations at banks that to be further abided by. Instead of receiving interest from consumers, the brand has focused on specifically leading change into charging commission from retailers of around 6% within new transaction values (Financial Review. 2018)

- The recent regulation changes in the BPNL industry on AfterPay have led to change drops in risk and price for consumers focused on providing new superior value propositions successively on wider standards. After play slogan “There’s nothing to pay” led rise to hundreds and thousands of millennial, consumers in Australia purchasing goods with high flexibility.

C) Innovation since 2020

- The company's striking new commercial deal with one of the most prominent US retail giant in the middle of year 202, that has grown to be wider resurge on share price value within market scenarios.

- AfterPay like most competitors aims to reduce losses, the average price/ revenue ratio hovering around new 50 forms within rising technical changes within rising share price. Playing a multi-sided platform business, within a new marketplace enhances attention on aversion to credit cards and grows in an ecosystem (CHOICE, 2018).

- After the Play model has been flipping economies of credit cards, a business model is highly creative technically for incorporating new submission levels. This simple product offering is highly attractive, as repayment rescheduling is based on a flat fee structure for missed payments.

References