Visa’s competitive strategy and growth strategies revolve around payment card services and its essential information technology. Information technology supports the company’s generic competitive strategy and the related cost-based competitive advantages. Visa’s payment card service business develops through intensive growth strategies that also rely on the capacity of the company’s IT assets. This significance of IT relates to the business need to maximize international market reach, as well as the need to support simultaneous payment card transactions. Visa’s industry position represents the effectiveness of the company’s generic competitive strategy and intensive growth strategies.
The characteristics of Visa’s competitive strategy are similar to those of major competitors, such as American Express and MasterCard. Also, competitors use growth strategies that have similarities to those of Visa. These similarities reflect tough competition in the international payment card services market.
Visa’s Generic Competitive Strategy
Visa’s generic competitive strategy is cost leadership. This generic strategy, according to Michael E. Porter, focuses on using low cost as a competitive advantage that can support attractive prices, which include fees that Visa charges for bank card transactions. The company uses this generic competitive strategy to enable growth strategies, like market penetration.
One of Visa’s objectives in this competitive strategy is to minimize business costs. Economies of scale linked to international operations support cost minimization. For example, a global market reach and widespread adoption minimize business costs by spreading fixed costs across high volumes of payment transactions. Through low costs, this generic competitive strategy allows for business flexibility in offering attractive cost-effective arrangements with banks and other financial institutions.
The implementation of cost leadership as Visa’s generic competitive strategy depends on information technology. IT is a critical success factor in the company’s operations. IT systems and networks facilitate payment transaction processing at speeds needed for Visa’s competitive advantages. Consequently, to maintain the effectiveness of this generic competitive strategy, the company keeps its IT systems and networks up to date, reliable, and secure for payment transactions.
An implication of cost leadership is the contribution of this generic competitive strategy to the satisfaction of Visa’s mission statement and vision statement. A fundamental objective of the company is to be the best option for payments. Through cost leadership as its generic competitive strategy, Visa maintains low costs and economies of scale, which facilitate widespread use and global coverage that ensure ease of use and accessibility for payment card users.
Visa’s Intensive Growth Strategies
Market penetration is Visa’s growth strategy that takes priority. According to the Ansoff Matrix, market penetration grows the business by increasing the company’s sales and market share. For example, Visa implements this intensive growth strategy by seeking new arrangements with banks to increase the number of users and the volume of payment transactions. A bigger global network with more payment transactions means higher revenues and more profits for the business.
An implication of market penetration as one of Visa’s intensive growth strategies is that the company needs measures for maximizing its market reach and market share. These measures involve elements of Visa’s marketing mix (4P), such as place (distribution) and promotion. For example, the place or distribution selection influences the degree of market penetration in terms of access to regional or domestic payment card service markets.
Visa also needs to develop the capacity of its information technology assets to support market penetration as an intensive growth strategy. For example, increasing Visa’s capacity for payment transaction processing is a necessity that comes with the increasing volume of transactions resulting from this growth strategy.
In terms of Visa’s generic competitive strategy of cost leadership, market penetration benefits from competitive advantages based on minimized costs and related competitive pricing. These competitive advantages make the company’s services attractive to banks and other financial institutions. Consequently, these competitive advantages enable the maximization of Visa’s market reach, market share, and revenues.
Product development also applies to Visa and its business growth targets. As an intensive growth strategy, product development involves the introduction of new products to current customers, such as bank account holders in the company’s current markets of operations. Even though developing new products could prove risky, this intensive growth strategy is an attractive option for Visa to create new revenue channels despite market saturation.
Visa has business strengths for successful product development, as well as opportunities that determine the products and product characteristics that suit this intensive growth strategy in the payment card industry. Visa’s generic competitive strategy of cost leadership relates to such strengths, which are competitive advantages that ensure the success of new products targeting customers in the payment card services industry.
Market development is a minor intensive strategy that supports Visa’s growth. The objective of market development, in this case, is to grow the business by offering the company’s current or existing payment card services in new markets or new market segments. For example, Visa may have new growth opportunities to provide its services in new market segments emerging as a result of new consumer electronics or information technology.
In market development, Visa derives some competitive advantages from its generic competitive strategy of cost leadership. Low costs based on cost leadership allow the company to offer its payment card services at competitive prices to partners and customers. With the generic competitive strategy of cost leadership, such competitive pricing for fees can make Visa a major player as a first mover or as one of the competitors in new markets or new market segments.
Diversification is a risky intensive growth strategy but it can provide new growth opportunities for Visa Inc. Diversification is not a significant growth strategy in this case, considering that the company continues focusing on its payment card services business. Visa currently prioritizes the other three growth strategies.
In implementing this intensive growth strategy, Visa would enter new markets or segments thereof through new products similar to what the company currently offers, through entirely different products closely related to the company’s current products, or through entirely new business operations in other industries and markets.
Using Visa’s generic competitive strategy of cost leadership in implementing diversification can provide considerable competitive advantages. For example, cost leadership in entering a new industry can make the company’s new products competitive based on attractive prices enabled through low business costs. Visa’s diversification would require additional competitive advantages from business aspects other than cost leadership.
Diversification depends on trends impacting the payment card industry, such as economic and technological trends. For example, novel IT systems for payment card processing can open new growth opportunities for the company in other industries.
It is expectable that Visa’s organizational structure (company structure) may add new divisions or change existing ones to accommodate the additional business needs resulting from implementing diversification as an intensive growth strategy.
References
- Milosavljević, M. (2025). From theory to reality: The varied and often unintended consequences of card payment surcharging. Journal of Payments Strategy & Systems, 19(1), 63-71.
- Parmentier, G., & Gandia, R. (2025). Strategy and Business Models in the Digital Age. Edward Elgar Publishing.
- Visa Inc. – What’s influencing payments in 2025: 10 recommendations on business strategy.
- Visa Inc. Form 10-K.
- Ziqiang, T. (2024). Digital transformation, competitive strategy and value creation: A test based on enterprise life cycle theory. Science & Technology Progress and Policy, 41(14), 1-10.