San Diego State University MSBA MGT-626 Sean Yeh Instructor: Dr. Larry Rhyne August 24, 2007

Contents Introduction The Goal to the Market The Clients Profiles The Market Structure of the industry Internet usage Who is online? Market Structure Michael Porter 5 force analysis Competitive Strategy

Introduction

The Goal to the Market

The Clients

Profiles

The Market Structure of the industry

Internet usage

Who is online?

Market Structure

Michael Porter 5 force analysis

Competitive Strategy

Introduction The Goal to the Market Help communicate with their customers and their brand preference through internet Traditional Advertising Agency Top Of Mind Ideal brand Brand preference : Event , Official Website Brand Awareness: media, TV , print media, OTC banner

The Goal to the Market

Product and Service: Total Solution on Internet Ads. We provide the following product and services: Official Website for an Enterprise Web Hosting Promotions on the Internet Internet Application Programming Multi Media Animation design Custom Relation Management Agency for Internet Media( Purchasing, Planning, Analysis ) Public Relation on Internet E paper/ E card / Virus Marketing Web log( BLOG ) Marketing

We provide the following product and services:

Official Website for an Enterprise

Web Hosting

Promotions on the Internet

Internet Application Programming

Multi Media Animation design

Custom Relation Management

Agency for Internet Media( Purchasing, Planning, Analysis )

Public Relation on Internet

E paper/ E card / Virus Marketing

Web log( BLOG ) Marketing

Introduction: The Clients

Introduction: Profiles Official Website

Introduction: Profiles Promotions on the Internet

Introduction: Profiles E paper/ E card / Virus Marketing

Introduction: Profiles Web log( BLOG ) Marketing

The Market of the industry: Internet usage rate in 2006 Nearly 60% of Taiwan residents on line in population of 11,8 million people. 2006 年 12 月 27 日

Nearly 60% of Taiwan residents on line in population of 11,8 million people.

The Market of the industry: Internet usage rate in 2006 More Rely on internet One who use internet within one day Year 2004:36.1% Year 2006:42.5%

More Rely on internet

One who use internet within one day

Year 2004:36.1%

Year 2006:42.5%

The Market of the industry: Who is online? 20 something: the highest, 40 something: more than 50% The highest usage on internet located on 20-29 years old and 10-19 years old The highest growth rate on usage located on 30-39 ,40-49 years old. More than 75% of 10-39 year-old person online.

20 something: the highest, 40 something: more than 50%

The highest usage on internet located on 20-29 years old and 10-19 years old

The highest growth rate on usage located on 30-39 ,40-49 years old.

More than 75% of 10-39 year-old person online.

The Market of the industry: Our Sales Gross Sales in first half of 2007 is more than the aggregate number in year 2006 250 510 680 759 0 100 200 300 400 500 600 700 800 2004 2005 2006 First half of 2007

Gross Sales in first half of 2007 is more than the aggregate number in year 2006

The Market of the industry: Market Structure An Emerging Industry ? Market is new Companies in grow-and-build model Technological know-how emerging Experience curve effects often permit cost reductions as volume builds Buyers first-time users Marketing task involves inducing initial purchase & overcoming customer concerns Uncertainty about how fast demand for product will grow & how big market will get No “rules of the game” Entry barriers tend to be low A Fragmented Industry ? Absence of visible market leaders Low entry barriers & absence of scale economies Market for product is local Small quantities of customized products required Market is so large & diverse it takes numerous firms to accommodate buyer needs Newness of industry

An Emerging Industry ?

Market is new

Companies in grow-and-build model

Technological know-how emerging

Experience curve effects often permit cost reductions as volume builds

Buyers first-time users

Marketing task involves inducing initial purchase & overcoming customer concerns

Uncertainty about how fast demand for product will grow & how big market will get

No “rules of the game”

Entry barriers tend to be low

A Fragmented Industry ?

Absence of visible market leaders

Low entry barriers & absence of scale economies

Market for product is local

Small quantities of customized products required

Market is so large & diverse it takes numerous firms to accommodate buyer needs

Newness of industry

The Market of the industry: Example: Fragmented Industries Book publishing Landscaping & plant nurseries Auto repair Restaurant industry Public accounting Women’s dresses Meat packing Paperboard boxes Hotels & motels Furniture Some “creative” things

Book publishing

Landscaping & plant nurseries

Auto repair

Restaurant industry

Public accounting

Women’s dresses

Meat packing

Paperboard boxes

Hotels & motels

Furniture

Some “creative” things

Michael Porter’s Five Competitive Forces Analysis 1 Concentration: low Diversity of competitors: High Product differentiation: High Cost conditions Scale of economics: absence Industry Competitors Rivalry Among Existing Firms

Concentration: low

Diversity of competitors: High

Product differentiation: High

Cost conditions

Scale of economics: absence

Michael Porter’s Five Competitive Forces Analysis 2 Cost of product Server: lower Media: higher Product differentiation: high Competition between suppliers: high Size and concentration of suppliers: low Suppliers’ switching costs: low Supplier’s ability to integrate: low Industry Competitors Rivalry Among Existing Firms Buyers Bargaining Power of Suppliers Bargaining Power of Buyers Suppliers Size and concentration of buys: high Buys’ switching costs: higher if choose to use our website applications Buy’s information: Big Co. : high Small Co.: low

Cost of product

Server: lower

Media: higher

Product differentiation: high

Competition between suppliers: high

Size and concentration of suppliers: low

Suppliers’ switching costs: low

Supplier’s ability to integrate: low

Size and concentration of buys: high

Buys’ switching costs:

higher if choose to use our website applications

Buy’s information:

Big Co. : high

Small Co.: low

Michael Porter’s Five Competitive Forces Analysis 3 Inter-substitutes: Internet vs. Print media (Newspaper, magazine…) Industry Competitors Rivalry Among Existing Firms Substitutes Potential Entrants Threat of Substitute Products or Services Threat of New Entrants Economies of scale: low Absolute cost advantages : low Capital requirements Web Design: low Media Purchase: higher Product differentiation: high Government and legal barriers Generally: low E-paper market: high (Anti-SPAM S imultaneously P osted A dvertising M essage )

Inter-substitutes:

Internet vs. Print media (Newspaper, magazine…)

Economies of scale: low

Absolute cost advantages : low

Capital requirements

Web Design: low

Media Purchase: higher

Product differentiation: high

Government and legal barriers

Generally: low

E-paper market: high (Anti-SPAM

S imultaneously P osted A dvertising M essage )

Michael Porter’s Five Competitive Forces Analysis 4 Industry Competitors Rivalry Among Existing Firms Buyers Potential Entrants Bargaining Power of Suppliers : Weak Threat of Substitute: Weak Threat of New Entrants: Strong Bargaining Power of Buyers: Strong Substitutes Suppliers

Competitive Strategy 1 In fragmented industries Construct & operate “formula” facilities Become a low-cost producer Increase customer value via vertical integration Specialize by product type Specialize by customer type Focus on limited geographic area

In fragmented industries

Construct & operate “formula” facilities

Become a low-cost producer

Increase customer value via vertical integration

Specialize by product type

Specialize by customer type

Focus on limited geographic area

Competitive Strategy 2 In emerging industries Push hard to perfect technology to Improve product quality to develop attractive performance features to shape rules of competition Try to capture potential first-mover advantages Pursue new Customers & user applications Move quickly when technological uncertainty clears & a “dominant” technology emerges

In emerging industries

Push hard

to perfect technology

to Improve product quality

to develop attractive performance features

to shape rules of competition

Try to capture potential first-mover advantages

Pursue new

Customers & user applications

Move quickly when technological uncertainty clears & a “dominant” technology emerges

Competitive Strategy 3 Our strategy to the market Focus on Specific industry product differentiation Vertical Corporation strategic alliance with media inc. UDN( United Daily News Online), Yahoo, traditional advertising company (ex. DDB) PR company (ex. Edelman public relations consultancy ) Affiliate with web server providers Competencies Ability to control quality (ex. PMP ) Ability to integrate all needed human resources (work flow)

Our strategy to the market

Focus on Specific industry

product differentiation

Vertical Corporation

strategic alliance with media inc.

UDN( United Daily News Online), Yahoo,

traditional advertising company (ex. DDB)

PR company (ex. Edelman public relations consultancy )

Affiliate with web server providers Competencies

Ability to control quality (ex. PMP )

Ability to integrate all needed human resources (work flow)

Thank you