Mastercard International
Reversing a decline in market share
PA Consulting Group was commissioned to develop a simulation model of the entire credit card industry that was used to test several strategies. Concluding that the best strategy was one previously rejected by MasterCard, PA helped MasterCard realize a 25 percent increase in market share.
Through the 1980s, MasterCard International experienced steady erosion in market share. Despite numerous attempts from different parts of the organization to solve the problem, the decline continued. Management feared that falling below 25 percent market share could result in the member banks dropping MasterCard altogether in favor of the Visa brand.
The dynamic simulation model that PA built for MasterCard provided the following benefits:
- It allowed MasterCard to easily test different strategies and gauge their effectiveness before spending the time and money to implement them
- It provided an understanding of the drivers of their business, in order to clearly see the areas of highest leverage
- It initiated the co-branding revolution that increased MasterCard’s market share by 25 percent and increased their revenues by billions of dollars.
“PA’s dynamic simulation work provided the insight that increased MasterCard’s market share by eight points.”
David Starr
Former VP Technology
MasterCard International
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