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SSE Charities in Virtual Worlds group4b

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  • Second Life: High concentration: Few virtual worlds in High switching costs: Users need to be moved, knowledge of how to perform their operations, get contacts, build brandDifferentiated products: The same activities could not be performed in another virtual worldSuppliers not dependent: SL dependent n active membership, but still the PT avatars are not different from anyone else in SL. Linden lab: Decreased the number of employees by 1/3 in 2010 as they were not sure about the future. Microsoft potential buyer. http://www.welt.de/wirtschaft/article7999480/Warum-keiner-mehr-Second-Life-haben-moechte.htmlArtists:Many sub: There are many sub, but a famous artist has power as it attracts more visitors. As the artist is signed, their power increases – PT advertises the specific event and is dependent on the artist showing up one time. Buyer Power:DonorsMany potential: But you have to be a member of SL – and thus also have a new computer, tech skilss etc. High price sensitivity: Wilingness to spend is lowe as its hard to investigate the credibility of the charity org. Differentiated: all org have different aims. Few swithcing cost: one time transaction. Charity projects: Individual projects have low power, but if organizations want to go through a RL org, the porwer increases as the org have limited knowledge about VWs.
  • New EntrantsLow capital: Only basic technological skills, new computer etc needed. Both start up costs as well as fixed cost.Government restrictions: Threat and opportunity. Makes the industry more credible. Barriers to enter is technology: “Entering Second Life requirestheinstallation of a large “client” programthat will onlyrun on a relatively modern computer (Windows, Mac orLinux), with a fast and stableconnection to theinternet. Giventhefinancialconstraintsthatmanynon-profitsoperatewithin, thiscanpresent a seriousstumbling block.“ (Panganiban 2007)Also newusersarealienatedbythelandscape. many, manypeopletry Second Life, getfrustratedordisoriented and thenleave, never to return. (Panganiban 2007)SubstitutesOther experiences: why are people donating? Exchange for an event or as a donation?RL charity org: Both off and online – in SL, but also internet campaign. Paypal payment? % that reach the target?Direct: If people want to donate – to homeless people etc in community. Personal engagement: People can feel that they donate their time. RivalryNo focus on price, as the different causes differentiates the organizations. The organizations share certain resources among them, as islands etc. Experiences in SL that are not hosted by charity org. Internet based campaigns: E.g. myspace campaigns
  • Transcript

    • 1. Charities
      in Virtual Worlds
      Live Case 02/07/2011
      Group 4B – Emilie, Charlotta, Johan, Alexandra
    • 2. Executive Summary
      Second Life (SL) is a virtual world (VW) where several charity organizations operate. The industry of charities in SL is characterized by strong supplier power, high threat of new entrants and substitutes as well as a medium power of buyers. In addition, the rivalry between industry participants is medium, and thus the profitability (i.e. ease of raising funds) of being in the industry are rather low for organizations only present in SL. Worth noting is that the presence in SL has several other benefits, such as reaching a global audience and acquiring members without geographical restrictions.
      The competitor analysis between Peace Train, American Cancer Society and Virtual Ability, which primary serves the purpose of benchmarking, reveals the resources and capabilities each organization possesses.
      Peace Train is an agile organization that is particularly strong at bridging the gap between individual avatars and small charity projects, but needs to find ways to decrease the dependence on SL. American Cancer Society has a strong brand image that attracts a large number of volunteers and donors. However, they need to work with their high administrative costs. Virtual Ability attaches its members on a personal level due to its SL activities for people with disabilities. They would benefit from increasing their marketing efforts on the internet.
      To sum up, in the future organizations within the industry should consider to migrate into other platforms, incorporate real life activities with virtual world presence, contribute to raising awareness of VWs and engage in strategic partnerships.
    • 3. Industry analysis
      Charity Projects
      Linden Lab Bank
      Second Life
      Peoples Needs
      Peace Train
      Donors
      Artist
      Definition of the industry:
      The industry of charity organizations that operates primarily in Second Life (their “base” should be in Second Life, but they can have activities in the real world as well). They raise money in the Second Life and donate it to real life charity projects.
      Geographical Scope: Charity organizations from Europe/US (western world) and Asia
    • 4. Porter´s 5 forces
      Second Life
      High switching costs
      Few substitutes
      Differentiated products
      Suppliers not dependent on charity organizations
      Linden Lab troubled1;2
      Cancelled discount for charity organizations and education3
      Artists
      Many substitutes
      High switching costs when signed
       High supplier power
      Donors
      Many potential donors – but limited to members of SL
      High price sensitivity - trust
      Small amount of money for each buyer
      Differentiated organizations/causes in SL
      Few switching costs
      Charity Projects
      RL organizations have Limited knowledge of virtual worlds
       Medium buyer power
      Buyer Power
      Supplier Power
      1 http://www.welt.de/
      2 http://www.pcgames.de/
      3 Interview – Gentle Heron
    • 5. Porter´s 5 forces
      Low capital requirements
      Low start up cost
      Low fixed cost
      Easy access to the internet
      Limited knowledge required
      WOM: SL unstable
      Government restrictions
      501 C3 status applicable 1;2
       High threat of new entrants
      Other experiences in SL
      Motivation behind “purchase” – donation or experience in SL?
      Charity org in other VWs.
      Real Life Charity Organizations
      On/offline
      Direct Personal donations
      Personal Engagement
       High threat of substitutes
      Threat of New Entrants
      Threat of Substitutes
      Large number of organizations of different size
      Low exit barriers
      Moral commitment
      Differentiated Causes
      Resource Sharing
      Four Bridges
       Medium Rivalry
      Rivalry
      1 Interview S. Mahaley
      2 www.wikipedia.org/wiki/501(c)
    • 6. High
      Medium
      Low
      To run a charityorganization in SL
      isnotthat profitable monetarywise, butthepresencecanserveotherpurposes as raiseawareness etc.
      Porter´s 5 forces
    • 7. Competitor Analysis: Strategic Groups
      Peacetrain
      ONLY SL
      SECOND Pride
      Virtual Ability
      LOCATION
      Veteransfor Peace
      BORDC
      WARChild
      Coalition of womenforpeace
      American Cancer Society
      RL & SL
      SMALL
      LARGE
      SIZE
      www.fourbridgesproject.org/orgs.aspx
      www.cancer.org
      www.nonprofitcommons.org
      www.fourbridgesproject.org
    • 8. Peace Train
      Organizational Capabilities
      • Organizing and hosting events in SL
      • 9. Organization and coordination of artists
      • 10. Coordinating actions between different members
      • 11. Enable donations from avatars
      Information
      Founded in 2007 by three avapreneurs.
      Approx 100members
      Mission: ”…to advance the cause of peace in the world”.
      PeaceFest is an yearly event with the aim to raise money.
      Resources
      • Human:
      • 12. Core team (4 people)
      • 13. Knowledge & networks
      • 14. Volunteer workers (approx. 15 active members) -> intrinsic motivation and engaged in the cause
      • 15. Intangible:
      • 16. Open source programs -> low operating costs
      • 17. Collaborations with other organizations e.g. university for an internship project
      • 18. 501 c 3 (government charity certificate and American tax exempt)
      • 19. SL office
      • 20. PayPal Account
      Interview Mahaley
      Teigland (2009)
    • 21. Virtual Ability
      Resources
      Human:
      50 Active members
      SL knowledge & RL network
      Specialization in disabilities
      Tangible
      Office in RL
      Intangible:
      6 areas in SL
      Collaboration with SL
      Activities in “InWorldz”
      Brand known for specialization
      501 c 3 certificate
      Information
      • Founded in 2007 – started on dating website and moved to SL
      • 22. Approx 500 members , 10 % active to support the cause.
      • 23. Mission: “..enable people with a wide range of disabilities …to enter and thrive in online virtual worlds like Second Life”
      • 24. Income from RL Projects, donations in SL as well as rent paid from tenants in SL.
      Organizational Capabilities
      • Raise money in RL to support cause in SL
      • 25. Provide meaningful virtual experiences to people with disabilities
      Virtualability.org;
      Interview GentleHeron
    • 26. American Cancer Society
      Organizational Capabilities
      • Networking capability; managing corporate relationships
      • 27. Strategic control of SL activities
      • 28. Organization & coordination of events /members
      Resources
      • Human:
      • 29. SL & RL knowledge and networks
      • 30. Corporate structure and strong management
      • 31. Volunteer workers e.g. 140 teams in Relay for Life 2010 who plan and execute multiple fundraising events in SL
      • 32. Intangible:
      • 33. Brand and reputation
      • 34. Collaborations with other organizations e.g. corporate sponsorships
      • 35. 501 c 3 (government charity certificate and American tax exempt); IRS Form 990
      • 36. Resources in SL: Own island
      • 37. Tangible:
      Information
      Entered SL in 2005; build up own island in 2007
      2000 members in SL (in 2008)
      Mission: ”…dedicated to eliminatingcancer...”.
      Why in SL? Reach a new communities & new markets
      Relay for Life (24hrs) most important event (since 2005), but expanded to other activities that span several months e.g Sail For Life; Fashion For Life
      Donations Relay for Life: USD 220 000 (in 2010); 1579 participating Avatars
      www.cancer.org
      www.relayforlife.org/secondlife
    • 38. Interview S. Mahaley
      Interview GentleHeron
      www.relayforlife.org/secondlife
      https://www.portfolio.du.edu
    • 39. The future
      Threats
      Opportunities
      Dependence on one platform
      Perceived distance
      Dependence on the knowledge of VWs
      Unorganized impression if a mixture of a large number of charity organizations
      Migration to new platforms in RL, 2D, 3D
      Incorporate RL activities with VW presence
      Exposure and WOM of VWs
      Strategic partnerships for mutual benefits
    • 40. Q & A
    • 41. References
      http://virtualability.org/va_history.aspx (02/04/2011)
      http://fourbridgesproject.org/orgs.aspx (02/04/2011)
      http://www.nonprofitcommons.org/ (02/04/2011)
      https://www.portfolio.du.edu/portfolio/getportfoliofile?uid=73430 (02/04/2011)
      Interviews
      Steve Mahaley - PeaceTrain
      Gentle Heron – VirtualAbility
      Meeting in SL: NPC meeting – severalleaders from different charityorganizations in SL.
      • Maheley, S., Interview 02/02/2011
      • 42. http://www.pcgames.de/Second-Life-PC-128601/News/Second-Life-Microsoft-als-moeglicher-Kaeufer-Linden-Lab-UK-wurde-geschlossen-776425/ (02/03/2011)
      • 43. Teigland, R., “Born Virtuals and Avapreneurship: A Case Study of Achieving Successful Outcomes in Peace Train – a Second Life Organization”, JVWR, 2009.
      • 44. http://www.welt.de/wirtschaft/article7999480/Warum-keiner-mehr-Second-Life-haben-moechte.html (02/03/2011)
      • 45. http://www.youtube.com/watch?v=q31boZfjwSs (02/03/2011)
      • 46. http://www.relayforlife.org/secondlife (02/04/2011)
      • 47. http://www.cancer.org/ (02/04/2011)
    • Appendix
      Relay for Life 2010: http://www.youtube.com/watch?v=H330iUlxKGk