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bus343 essay.doc.doc bus343 essay.doc.doc Document Transcript

  • Environmental Analysis Competitor Analysis VOIP market is expending rapidly due to generalization of internet usage. Other than Skype, there are many notable companies out the VOIP market: Vonage, Windows Live Messenger and Yahoo Messenger. Also, other than the competitors in the VOIP market itself, there is a relevant old strong-base market that is corroding this infant market - mobile companies, such as Fido and Rogers, or Telecom companies such as Telus. The main competitors are briefly outlined below: Vonage, Windows Live Messenger, Yahoo Messenger Vonage is a commercial company that provides all kinds of phone line services. It is funded in New Jersey in 2001 and rapidly expended through North America and United Kingdom. The main services are fax service, enhanced 411 dailing (for U.S.), softphone. What makes Vonage most attractive is "virtual numbers" for a monthly fee. For example, a subscriber in British Columbia may choose a number with Alberta area code, allowing callers from Vancouver Calgary will be billed only for a local call. Last year, there has been a widespread of reports of Vonage’s VOIP 911 system. Company has difficulty direct the 911 service based on IP address. By focus on this problem, Vonage are trying to standardize IP address with landline area code. Windows Live Messenger Windows Live Messenger is an instant message freeware provided by Microsoft. It was first released in 1999 with basic messaging function. Right now it has been enhanced with much
  • valuable function: mobile text message (SMS), voice chat, and off-line message. Since Windows Live Messenger is released, its usage is all over the world because of Microsoft’s monopoly market. However, this software only supports Microsoft Windows system. Mac, Linux, Unix, or other operating system users must find alternative software. Also, its “filter function” is problematic because it often block out many normal file transaction between two clients. Yahoo Messenger Yahoo Messenger is an instant message client provide by Yahoo, a large search engine company. It has similar function to Windows Live Messenger such as text message and voice chat. Two things that make Yahoo Messenger different from Windows Live Messenger is that it provides PC-to-phone call and Yahoo has developed an alternative version for Mac and Unix. However, its connections quality tends to be unsatisfactory due to constant Yahoo server problem. Recently Yahoo Messenger has announced partnership Windows Live Messenger. The clients from either software can send instant message to each other. This takes over approximately 70% of VOIP market. Fido and Rogers Fido and Rogers are two main mobile companies in the lower mainland. According to Statistic Canada, 63% of Canadian between age of 15 and 69 own at least one mobile phone. Also, the monthly fee has been pressed lower due to universality of mobile phone. Both reasons gain most people’s favour on using telecommunication rather than VOIP.
  • Major Implication by Competitor Analysis As a competitor, Skype need to refocus on its advantage and competitors’ weakness. Skype has ability to provide a better quality of live and webcam chat. It is possible to expend more services. Also, it is important to find out competitors’ weakness and develop their weakness into our competitive advantage. For example, while Skype enhance PC-to-phone service, 911 services can be listed into consideration and make sure the mistake that Vonage has made does not occur in Skype. Analysis of Macro Environment The VoIP industry has boomed in 2005 unexpectedly. VoIP has become the hot technology and the latest buzzword in the industry. In North America, wholesale VoIP sales were estimated to approach well over $400 million. However, this is an immature market. There are large potential to develop and expend. The reason is because consumer has low awareness on this technology. Number of internet user is increasing, as well wireless internet connection location. Places such as SFU or UBC has wireless network and this service increases number of laptop users due to convenience. While using laptop, people turn on chatting software as a regular habit. This creates a need VoIP because they tend to favour chat online. People who use chat rooms are mainly teenagers. While a quarter of internet users claim to have used chat rooms, this activity substantially decreases after age of 25. This trend demonstrates that other than telecommunication, internet chat has large potential to become a large segment of VoIP market. Because teenagers are likely to have economic concern, sometimes they use less mobile phone but VoIP software for socialization.
  • Customer Analysis Customer Segments The major customer segments are teenagers and people with age of early twentieth. They are considered as early adopter segments of the VoIP market. There’s a trend that some device companies and service provider, especially online organizations, start to use VoIP as “competitive differentiators” to retain customers. Customer Trends and need In the early 80s, consumers were satisfied with a single home-phone line. After a decade, not just a phone line, consumers began to concern about the quality of connection and convenience of phone. This is how wireless phone line becomes populated. Right now, by going through the rapid growth of information technology, using desktop and laptop becomes part of our daily lives. A lot of people use computer for chatting and meeting purposes. VoIP is always being marketed as a traditional phone product. Now it appeals to more price-sensitive and tech-savvy segments. There is several problems regard to Skype’s overall performance that customer concern: connection quality, complexity, security, and technology knowledge. Connection Quality, Security and Privacy, Complexity, Technical Knowledge
  • While using live chat, users may feel delay or discontinuous voice reception. This occurs when bandwidth is insufficient. Also, firewall may block out some signal TCP port and that will slow down the connection between two clients. Complexity Skype requires a computer and software. If a person is outside he will probably use cellphone to talk instead of setting up the computer and finding the connections. In this case, Skype is not convenient enough. Security and Privacy Clients have an enormous worry on this. Skype does not provide encryption process. Not just people on the Skype list, anyone who has Skype are able to make connection with any other Skype user. Besides, ssomeone may attempt to decrypt a Skype-based voice conversation, such as hackers. Technical Knowledge Many senior aged people, such as baby boomers, think Skype is difficult software to learn. The main reason is because unlike generation X and Y, they do not have sufficient IT background. On Skype, there’s no similar feature as phone line, such as night digit dial bottoms. The next goal Skype can be enhanced is to make progress towards the less technologically advanced segments
  • SWOT Analysis Targeting Older People/ Targeting IT Illiterate People Strengths: • Society may perceive our company as a “caring” company since we focus on those people who might be abandoned by other competitors. Weaknesses: • Costly, since we have to spend lots of money to provide experts and training to our new target customers. • Time consuming for our target customers to adapt with our new product. Opportunities: • Large senior age population. • Other competitors may not notice this potential target market segment. Threats: • Other competitors may have gone ahead of us. • Older people may not be interested in our new innovation. Increase Bandwidth Strengths: • Our company may be seen as a customer oriented company which provides high quality products. • Since Skype is one of VOIP Market Company, increasing bandwidth should not pose any problem.
  • Weaknesses: • By increasing bandwidth, it’s going to increase our costs and decrease our profit margins. • Decrease available resources that can be used for improving other divisions. Opportunities: • Increased validation from customers since they perceive us as a customer oriented company • It could eliminate other competitors since we have provided a high-quality product. Threats: • Other participants who have greater financial support may have gone ahead of us. Innovation Strengths: • Since our company is an early innovator, we are protected by patent so we can capitalize this advantage. • Large market potential because it is a brand new product. Weaknesses: • Since it is new, it may not work properly( need to be improved) Opportunities: • Since it is portable, more people will use our new innovation. • Open up lots of future potentials, such as, integration of Skype and cell-phone companies.
  • Threats: • Although our product has potential, it doesn’t mean that the product will be accepted well by the society. Tactical Plans 1. Potential Competitor: check out if there’s any same type of product currently existed in VoIP market. If so, how will new Skype product going to make difference. 2. Time Schedule: Setting up schedule a product being conceived until its being available for sale 3. Supplier cooperation: marketing department need to find an IC chip developing company agree upon innovating chips that fit our device. 4. Copyright confirmation: One IT product may requires to order hundreds technical related patents. Skype has to make sure the any technical innovation does not violate the law. 5. Conduct Beta Testing and Marketing Testing: Hiring testers for product and release news about new Skype product and see how public will respond. 6. Make adjustments where necessary: New Skype device will be sell in a test market area to determine customer acceptance 7. Set Price: Skype need to consider what price range for the device and monthly fee is able to compete with other VoIP and mobile company. 8. Product on-line advertisement: When consumer sense of Skype, they will think of online software before they notice there is actually a “Skype device”. They are unlikely to pay attention on “Skype commercial poster”. Thus, advertise on-line will be a convenient and beneficial way.
  • Budget and Projected Profit and Loss Statement This Year Next Year Marketing -plan budget $10,000,000 $50,000,000 Sales $60,000,000 $200,000,000 Profit $31,000,000 $110,000,000 Market share 14.40% 35% ROI 10% 25% Marketing Strategies Market Segmentation Strategy Skype will focus more on seniors and other computer illiterate segments, as we believe that by capturing the uncharted territory, we can gain competitive advantages over other companies. In addition, we are interested in raising the awareness of public on our services. Other companies seemed to focus more on innovations, but we’ll be focusing more on getting our services to be accessible not only by tech-savvy segment but also the non tech-savvy segments. We will still offer our services to all other segments. It’s just that we will thrive more to enable the segments that were once unavailable to us, because of technical knowledge, to be part of our loyal customers. This could be done by coming up with a product that is user friendly and usable without the need of a computer, such as a compact Skype product. Product Strategy One way to improve our existing product is to by solving the technical issues to our product. Current connection quality, security and privacy should be improved and complexity
  • should be kept to a minimum. In addition our services should be user-friendlier. All these converged to one main problem: reliability (is it user friendly, is it secure, etc). One strategy is to partner up with major telecommunication company such as Telus and Shaw. Those companies could provide us with the bandwidth and security that we need and in return we could share our customer pool with them. In addition, those companies usually have the knowledge and ability to offer secure communication line. It’s a win-win situation for both. Most of our problems will be solved. We could provide more reliable services and we could also have access to the telecommunication companies’ customers. Maybe both of our services could be offered as a bundle to customers. Another strategy is to innovate a product that is extremely user-friendly. The idea is to have a compact, easy to use and carry around item such as the current compact mp3 players. This new product should look like a cell-phone but with the capability of VOIP services. We believe that this will work because nowadays Internet is getting more and more common to the people and many will have access to them. It will prove to be very convenient, cheap and appealing especially to a traveling businessman who is always within Internet connections and needs to conduct lots of conferencing with his/her partners. Last but not least, an integrated cell phone and Skpe is a very viable strategy. The ability to use both normal phone calls and VOIP services will be very attractive to the market. Pricing Strategy Our goal is to offer cheap conferencing and long distance calls. Therefore we would strive to offer these calls at a rate of as low as possible while maintaining reliability.
  • Channel of Distribution Strategy  Skype will partner up with a major Telecommunication Company should we choose to pursue to increase our bandwidth and security.  Skype will offer our hardware product sales at all major electronic outlets should we choose to pursue the innovation of a new user-friendly compact product.  Skype will offer a 24 hrs toll-free and online assistance to our customers. By offering good customer services, we are hoping that word of mouth will alleviate our brand in the market. Pricing Strategy Marketing Communications Strategy  Skype will try and increase public awareness by posting banner ads on major websites such as Yahoo, Download.com, Google, etc  Skype will be recognized as the user-friendliest product on the market. Marketing Plan Control: Skype will use several tools to control and evaluate the marketing plan. First, we’ll look at our trend of sales analysis to see how well our product is being adopted and subsequently how well our marketing plan is. Skype will take necessary corrective actions if needed. In addition, we will evaluate from the number of warranties / guaranties claimed by our customers. This will indicate how well our products are made or how much reliability do they offer to our customers. Products recall will be on standby if the products are just way too lower quality than expected. On the other hand, we will also monitor and evaluate customers’ problems and feedbacks from our toll-free help center or online help regularly to identify and solve problems to keep our customers satisfied.
  • Last but not least, we will conduct a marketing plan audit semi annually to evaluate how effective the marketing plan was. By conducting audits we can identify the areas that need to be improved and what the problems were. After the audits, we can try and work on ways to improve the marketing plan’s efficiency and effectiveness.