Directi Business Case Study Presentation '09 Team Gryffindor - ISB Hyderabad

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  • 1. 1
    Case Study: DirectI Blogging Service
    By Gryffindors
    Anirudh Kumar
    Parag Dhanuka
    Prayag Panchwadkar
  • 2. Agenda
    Context: Industry Analysis
    • SWOT
    • 3. Competitor Analysis
    Increasing adoption and awareness of blogging in India
    • Segmented Targeting
    • 4. Securing “Marquee Bloggers”
    • 5. New Design Feature Promotion
    Plan for marketing and business development
    • Promotions
    • 6. Additional Product Features
    • 7. Business Development
    Monetization strategies
    • Ad Revenue
    • 8. Affiliate Marketing
    • 9. Free-mium Model
    • 10. Widgets Marketplace
    2
  • 11. SWOT Analysis
    3
  • 12. Competitor Analysis
    4
  • 13. Network effects
    5
  • 14. Agenda
    Context: Industry Analysis
    • SWOT
    • 15. Competitor Analysis
    Increasing adoption and awareness of blogging in India
    • Segmented Targeting
    • 16. Securing “Marquee Bloggers”
    • 17. Promotion through Distinct Product Attributes
    Plan for marketing and business development
    • Promotions
    • 18. Additional Product Features
    • 19. Business Development
    Monetization strategies
    • Ad Revenue
    • 20. Affiliate Marketing
    • 21. Free-mium Model
    • 22. Widgets Marketplace
    6
  • 23. The "Community Effect” can drive blogging in India
    The Social Networking Phenomenon
    • A runaway success in India
    • 24. No. of users on Orkut & Facebook has grown to more than 16 million.
    Community
    Feeling
    Online Gaming Success
    • Great Success of Zapak.com in mobilizing their network
    • 25. Participation rates exceeded expectations
    Education Forums
    • Pagalguy.com saw unparalleled success
    • 26. Many new education portals / services launched . Ex. Meritnation.com
    In India, one needs to tap into the “community effect” to make any online venture a success.
    All of the above examples have become successful by generating positive network effects.
    Source: JuxtConsult; I-Cube 2008; Team Analysis
    7
  • 27. Leveraging the Community Effect – Building Relationships with large offline / online networks
    Objectives
    • Make blogging popular in India among different user groups, which need to be selected strategically
    • 28. Achieve the “community effect” among an initial set of bloggers in each user group, which will encourage others with similar interests to blog
    • 29. Help generate credible and quality content that will attract more readers and more potential bloggers
    Suggested Plan of Action
    • Leverage the user baseof existing “successful” offline / online communities or networks to encourage blogging
    • 30. Target communities whose users would ideally take to blogging, such as people trying to lose weight / keep fit, etc.
    • 31. Attract people to write quality content, by promoting product design features that enable online community building
    8
  • 32. Relationships with large networks - Examples
    Target User
    Group
    Potential
    Possible
    Themes
    Possible
    Tie-up
    VLCC
    • Only 15% of Indian bloggers are women
    • 33. A win-win situation for both the company (branding – VLCC groups) as well as for Directi (VLCC User blogs will attract more potential bloggers and build the community)
    Losing Weight /
    Keeping Fit
    Raising Children
    / Motherhood
    Cooking / Recipes
    Women
    • MBA coaching institutes with large number of users can be used to reach out to people preparing for the CAT / GMAT. Popularity of forums such as Pagalguy shows that there is a lot of potential for new bloggers from this area
    • 34. If buy-in can be obtained from a few large school chains, a large number of students can be incentivized to blog, which will further incentivize other schools’ children to create blogger communities
    School / College
    Blogging
    Entrance
    Examinations
    Schools /
    Colleges
    MBA Coaching Institutes
    Students / Education
    Source: JuxtConsult 2008; Team Analysis
    9
  • 35. Relationships with large networks - Examples
    Target User
    Group
    Possible
    Themes
    Possible
    Tie-up
    Potential
    • Indian online travel market is estimated to be worth over USD$2 billion for 2007-08 and is growing rapidly
    • 36. Firms such as SOTC can give users “blogging coupons” to get started on Directi blogs
    • 37. Huge potential to rope in potential bloggers and large number of readers
    Traveling
    Experiences
    SOTC Tours
    Travelers
    • A large proportion of this base of users would be very ready to blog given their reading habits
    Crosswords Bookstores
    Literature Enthusiasts /
    Avid Readers
    Book Reviews
    • Great potential to secure users from this untapped source of potential bloggers who would want to share their spiritual thoughts / journey
    • 38. Great Cross Branding Opportunity for Art of Living
    Health /
    Spirituality Enthusiasts
    Art of Living
    Spiritual Ideas
    / Practices
    Source: Indiaprwire.com; Web Sources; Team Analysis
    10
  • 39. Leveraging the Community Effect - Securing “Marquee Bloggers”
    11
  • 40. Securing “Marquee Bloggers” – Examples
    Securing “Marquee Users” along with helping create suggested sub-communities of bloggers should make sure that we leverage the “Community Effect” opportunity with great success
    12
  • 41. Promotable Product Attribute 1 : Accessibility
    13
  • 42. Promotable Product Attribute 2: Localization
    14
  • 43. Promotable Product Attribute 3:Social Network
    15
  • 44. Promotable Product Attribute 4: Avenues of Monetization
    16
  • 45. Promotable Product Attribute 5: Power features
    17
  • 46. Directi Marketplace – A model for Open Innovation
    Corporate Marketplace
    • Firms transact with developers to get product / company specific themes / widgets made
    • 47. Sponsored and sponsor free themes and widgets offered free to bloggers
    Application Developers
    Brands /
    Companies
    Sponsored &
    Sponsor Free
    Themes and Widgets
    User Marketplace
    • Users transact with developers to get their blogs (premium or free) designed as per their choice
    • 48. Directi gets a share of the transaction amount
    Bloggers
    The Directi marketplace has two parts – (1) The User Marketplace: A transaction platform for bloggers and developers where bloggers can ask for specific blog designs or blog setup help, and (2) The Corporate Marketplace, where firms employ developers to develop sponsored themes and widgets offered free to bloggers
    Source: Team Analysis
  • 49. Promotable Product Attribute 6: More than just a blog
    19
  • 50. Agenda
    Context: Industry Analysis
    • SWOT
    • 51. Competitor Analysis
    Increasing adoption and awareness of blogging in India
    • Segmented Targeting
    • 52. Securing “Marquee Bloggers”
    • 53. New Design Feature Promotion
    Plan for marketing and business development
    • Promotions
    • 54. Additional Product Features
    • 55. Business Development
    Monetization strategies
    • Ad Revenue
    • 56. Affiliate Marketing
    • 57. Free-mium Model
    • 58. Widgets Marketplace
    20
  • 59. Promotions (Viral Marketing)
    21
  • 60. 22
    Business Development through Affiliations
  • 61. Promotions (Advertisements)
    23
  • 62. Revenues from Ads
    Based on the above calculations any acquisition cost below $6.61 is justified. Hence we should promote our brand with display, SEM and radio advertisement being the priority order
    24
  • 63. Agenda
    Context: Industry Analysis
    • SWOT
    • 64. Competitor Analysis
    Increasing adoption and awareness of blogging in India
    • Segmented Targeting
    • 65. Securing “Marquee Bloggers”
    • 66. New Design Feature Promotion
    Plan for marketing and business development
    • Promotions
    • 67. Additional Product Features
    • 68. Business Development
    Monetization strategies
    • Ad Revenue
    • 69. Affiliate Marketing
    • 70. Free-mium Model
    • 71. Widgets Marketplace
    25
  • 72. How will Directi Earn revenues ?
    26
  • 73. Monetization (Advertisement)
  • 74. Monetization (Freemium Model)
    Based on the above numbers 1000 additional active bloggers should bring us an extra $416 / Year
    28
  • 75. Internal Affiliate System (IAS)– A way to generate quality content and increase blogger base
    Tying up with
    companies
    Getting Bloggers
    on Board
    Bloggers promote
    participants
    Bloggers get
    Paid per click
    • Bloggers need to sign up with the affiliate system to start promoting the companies and earn money
    • 76. There is an incentive to generate better written content as more money can be made than with Skenzo or Adsense
    • 77. Bloggers get paid a higher percentage per click than with traditional Adsense ads
    • 78. Bloggers blog about a particular product / service
    • 79. They leverage their readership to get more user clicks
    • 80. Directi ties up with various companies & creates a network of affiliates who want to advertise more effectively
    • 81. This system allows better ROI on the advertisers’ money
    The Internal Affiliate System (IAS) can be an extremely useful model for Directi as not only does it generate revenue (commissions from advertisers), it also ensures that good content and hence more readership is generated for the platform
    29
  • 82. Optimistic Estimates with a simple freemium model and an integration with AdSense result in an NPV Of $46.35M
    $ Million
    NPV = $46.35 Mn
    CAGR
    74.80%
    CAGR
    120.40%
  • 83. Pessimistic Estimates with basic monetization platform suggest an NPV of $3.99M - Project seems viable even in worst case scenario
    $ Million
    NPV = $3.99 Mn
    CAGR
    49.60%
    CAGR
    104.60%
  • 84. Conclusion
    There exist significant gaps in the feature sets needed for Indian bloggers & what exist in today's platforms which can be plugged with a targeted feature set.
    Community effects need to be leveraged in order to achieve substantial network effects & propagate the acceptance & spread of blogging in India.
    Financial projections suggest that using the monetization tools elaborated, Directi should expect to derive significant value from this project.
    32
  • 85. Thank You
    33