Group Members

Hafsha 1911842630

Safrid Ahamed 1922164630

Sourav Sandar 1922021630

Nujhat Afrin Poushe 1922137030

Zuhair Ahmed 1931402030

Md. Nahian Hasan Tasin 2012445630

Sanima Fathema Binthe Siddique 2012373030

Sumaiya Shabnam 2013010630

Nafisa Sohana Emu 2012408030

Strategic Management
MGT489

Section - 06
Group- 01

Assigned Company
 Porter's 5 Forces

Threat of new entrants Bargaining power of suppliers Bargaining power of Threat of substitutes Rivalry among
(Low to Moderate) (Moderate) buyers (High) Competing Firms
(Moderate to High) (High)
 PESTEL Analysis
• Supportive government policies
• Regulatory advantage
P • Stricter information disclosure requirements
• Potential impact of tax increases
• Growing e-commerce and BNPL adoption
E • Favorable economic outlook
• Potential impact of a recession
• Millennials and Gen Z preference
S • Debt avoidance
• Concealed fees and interest concerns
• Machine learning for customer evaluation and loan customization
T • Continuous innovation
• Cybersecurity focus
• Potential indirect environmental impact
E • Positive impact on paper and waste reduction
• Commitment to sustainability
• Favorable legal environment
L • Regulatory advantage
• Possibility for increased consumer lawsuits
 SWOT Analysis
Strengths Weaknesses

• Transparent and Simple Financing

• Dependency on the Merchants
• Credit Risk
• Limited Acceptance

• Product Portfolio • Lucrative Features

 SWOT Analysis

Opportunities Threats

• Explore New Geographic Areas • Highly Competitive Market

• Explore New Verticals • Other Financial Institutions
• Business Expansion • Low Entry Barrier
• Data Security
• Economic Downturn
 Competitors Analysis

Affirm’s Competitors

Buy Now, Pay Later (BNPL)

Traditional Lenders
Providers
 Competitors Analysis (BNPL Providers)

• Offers flexible payments with interest

but no late fees
• Performs soft credit check

• Offers a payment plan with • Offers flexible payments with no • Offers a revolving credit line
four equal installments interest on pay in 4 loans but with interest but no late fees
• No interest charges charges late fees • Performs credit check
• No credit check • Performs soft credit checks
 Competitors Analysis (BNPL Providers)

• Offers flexible payments with

interest but no late fees
• Performs soft credit check

• Offers short-term installment plans • Offers short-term (Zip Pay) and long-
with interest fees term (Zip Money) financing with
• Charges late fees variable interest rates
• Performs soft credit checks • Performs credit check for Zip Money
 Corporate Level Strategy

It’s the highest level of strategic decisions that Affirm take

From our research, we figured out;

Joint Venture
Strategic Outsourcing
Horizontal Integration
 Joint Venture

Joint venture with Amazon.com as a payment

solution

Strategic Outsourcing

Strategic Alliance with marketing agencies for

marketing solutions for Affirm
Horizontal Integration

Acquired ‘Returnly’ and ‘Paybright inc.’

 Business Level Strategy

Red Ocean Strategy Product Differentiation

• PayPal Credit, Sezzle, Klarna, and many more • No free trial but easy to use
competitors • Repayment period of up to 36 months
• High-risk, high-reward technique
Value Innovation Customer Groups

• Machine learning to assess their customers' credit scores • Innovators and early adopters
• Subscription service Affirm plus • Freelancers, mid-size businesses, small businesses, and
large corporations
Product Development Strategy Creating Customer Demand
• One-time virtual cards by Affirm card • Complexity
• Compatibility
• Relative advantage
• observability
 Functional Level Strategy
Achieving Superior Efficiency

Economies of Scale
• Attracts more merchants, more consumers
• Significant GMV growth

Experience Curve
• More customer’s data, better algorithm
• Removes credit unworthy customer, reducing loss
• Growing profit to less per unit serving cost
 Achieving Superior Efficiency

Acquisition of Customer
• Attention grabbing advertisements
• Highlighted USP points
• Usage situation demonstration

Retention of Customer
• Loyalty point redeem options through Reward Hub
• $1.00 paid = 1 point
• 64% repeating customer
 Achieving Superior Quality

Quality as Reliability
• Poor rating according to Better Business Bureau
• Complaints filed to CFPB
• Problems with payments, unexpected fees & rates.

Quality as Excellence
• The software interface is easy to use
• Goes well with merchant’s infrastructure
 Achieving Superior Customer Responsiveness

Customization
• Customer Credit score based on soft checks
• Affirm APR calculator to determine the rate
• 0-36% customized interest rate

Responding Time
• Purchase information update within 2 days
• Down payment back within 10 days in case of not processed
order
• Manage section for reminding the due dates
 Ethical Issues
Good ethical practices
• Policy against harassment, discrimination

• Workplace safety and physical security

• Confidential business information

• Equal employment opportunity

• Benefit of emplyees Bad ethical practices

• Buy Now Pay Later impacts financial health

• Violating consumer protection

• Manipulative advertisement

• High interest rate

• Directly attacking competitors with destructive criticism

 Recommendations
Implement Blue Ocean Strategy in Focus to Achieve more Efficiency
terms of product or services

Balanced Dependency Boost Global Usage

 Revised Employment and Lay-
Offer Free Trial
off Policy

Practicing More Ethical

Business operations

Consumer Protection Law Expand CSR activities

 Reference
• https://helpcenter.affirm.com/us/s/article/affirm-rewards
• https://www.adweek.com/commerce/affirm-solves-life-awkward-moments-buy-now-pay-later/
• https://www.consumerfinance.gov/about-us/newsroom/cfpb-study-details-the-rapid-growth-of-buy-now-pay-later-lending/
• https://www.forbes.com/advisor/personal-loans/affirm-review/
• https://helpcenter.affirm.com/us/s/article/where-is-my-order
• https://www.capterra.com/p/218694/Affirm/reviews/ https://onlinetsm.com/pages/affirm
• https://www.affirm.com/business/apr-calculator
• https://performline.com/blog-post/bnpl-regulation-compliance-state-federal-levels/
• https://www.affirm.com/card
• https://investors.affirm.com/news-releases/news-release-details/amazon-business-adds-affirm-first-buy-now-pay-later-provider
• https://www.investopedia.com/how-does-affirm-work-5183684
• https://builtin.com/artificial-intelligence/machine-learning-finance-examples
• https://stripe.com/sv-in/guides/buy-now-pay-later
 Reference
• https://www.cnbc.com/select/affirm-personal-loans-review/
• https://investors.affirm.com/static-files/4f1f925e-5275-41a1-be24-ad71936f1e76
• https://www.cnbc.com/2023/11/02/amazon-affirm-buy-now-pay-later-small-business.html
• https://www.wk.com/work/
• https://investors.affirm.com/news-releases/news-release-details/affirm-to-acquire-returnly
• https://www.retaildive.com/news/affirm-shuts-down-divests-returnly/685961/
• https://investors.affirm.com/news-releases/news-release-details/affirm-to-acquire-returnly
• https://www.youtube.com/watch?v=U3JyjLxFVLI
• https://www.youtube.com/watch?v=V8gfPOPQNrg
• https://www.statista.com/insights/consumer/brand-profiles/3/12/affirm/united-states/