David Rosenthal: belief

Transcript context

…This is a lot like the Lockheed Martin episode, where I'm actually not sure we can apply the formal definition where we say, what enables them to be more profitable than MasterCard, because together they're like this government enabled duopoly. The way that we did this in the Lockheed Martin episode was we said, let's look at the five defense contractors as one entity and say, what enables the five of them collectively to out-compete new entrants? I think that's the right thing to do here with Visa and MasterCard, too. At the end of the day, Visa and MasterCard have basically no sustainable competitive advantage over each other. It's just operational excellence, who's slightly more clever on the bets they're willing to make for these value added services or next product lines. I think the one area where there is difference between them, and it's probably less so today but was quite strong through the 90s and 2000s was brand. I do think Visa made a genius move positioning against American Express, going up market in perception, and partnering with the Olympics. It's funny that even though it's a commodity, them and MasterCard are commodity, they somehow position themselves as more premium.…

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