Square SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. Strengths and weaknesses are considered as internal to the business and companies can change them. Opportunities and threats, on the other hand, are external in a way that companies cannot influence them. The following table illustrates Square SWOT analysis:

Square SWOT analysis

Strengths in Square SWOT Analysis

1. Square co-founder and CEO Jack Dorsey is a serial entrepreneur with proven leadership skills and business acumen. Dorsey successfully exercises purpose-driven leadership and his purpose at Square is making it easier for everyone to particulate in the economy. Moreover, Jack Dorsey is also a proven innovator and he is often compared to Steve Jobs, justifiably so. Dorsey’s effective leadership and innovative potential may play an instrumental role in expanding Square portfolio with more innovative products and services with positive implications on the long-term growth of the business.

2. Square market capitalization is more than USD 113 billion as of September 2021[1] As illustrated in figure below, Square stock value has increased more than 27 times from USD 9,00 since its IPO in October 2015 to its current USD 247,90. Specifically, market capitalization of the payments company soared during the past year once user conveniences associated with Square products and services became evident to a wider customer base internationally. Increasing market capitalization is a noteworthy strength for a business and indication of customer loyalty and trust.

Square Inc. market capitalization 2016 -2021

3. Developing highly effective ecosystems of financial products and services is placed at the core of Square business strategy and the finance sector disruptor has benefited from this strategy to a great extent. The fintech is developing two types of ecosystems simultaneously – seller ecosystem and cash ecosystem.

Square seller ecosystem is a cohesive  commerce  ecosystem  that  helps  its  sellers  start,  run,  and  grow  their  businesses. Cash ecosystem, on the other hand, comprises a wide range of financial products and services that are designed to help individuals manage their money. The payments company is consistently developing new products and services within both ecosystems. New products and services integrate well with the existing portfolio and contribute to customer loyalty. Furthermore, Square is focusing on increasing integration between the two ecosystems and this might take the business into the whole new level.

4. Square has enjoyed an impressive growth rate since its foundation in 2009. In its early days the financial services and digital payments company was growing 10 per cent every week for 2 years in terms of revenues. [2] The company has enjoyed a solid double-digit quarterly revenue growth rate ever since. An impressive growth rate fuelled by the first-mover advantage for many products and services is an enviable strength possessed by Square.

Weaknesses in Square SWOT Analysis

1. Square lacks global presence in operations. In Q1 2021, 98,15 % of revenues were generated in the US and only 1,85% of revenues were generated from international markets. There are legislative barriers for international global expansion in a way that Square business model contradicts with local financial rules and regulations in many countries. Nevertheless, it is critically important for Square to pursue international market expansion strategy extensively. Lack of focus on this direction will be handy to local competitors that copy Square business model.

2. Employee turnover rate at Square is high and this is one of the major weaknesses of the business. Business Insider calculated an average tenure per employee at the payments company as 2,3 years.[3] This is a very short timeframe with negative implications on the profitability of the payments platform. Specifically, high employee turnover rate increases the costs of employee recruitment and selection, training and development. Also, the matter consumes time and focus of senior management…

Square Inc. Report contains a full version of Square SWOT Analysis. The report illustrates the application of the major analytical strategic frameworks in business studies such as PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Square. Moreover, the report contains analyses of Square leadership, organizational structure, business strategy and organizational culture. The report also comprises discussions of Square marketing strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Square Market Cap 2013-2021 (2021) Macrotrends, Available at: https://www.macrotrends.net/stocks/charts/SQ/square/market-cap

[2] McKelvey, J. (2020) “Innovation Stack: Building an Unbeatable Business. One Crazy Idea at a Time” Portfolio/Penguin

[3] Fagan, K. (2018) “Silicon Valley techies get free food and dazzling offices, but they’re not very loyal – here’s how long the average employee stays at the biggest tech companies” Business Insider, Available at: https://www.businessinsider.com/average-employee-tenure-retention-at-top-tech-companies-2018-4