Presented by:-
Shray Jali
LM Thapar School Of Mgmt
 Founded in 1985 as Quantum Computer Services
 Offered online services to Commodore business
machines
 WWW came along a...
Business Unit Type of Business Members Access Acquired or
Developed
AOL Internet Online Service 19,000,000 Subscription De...
 Started its international expansion with
Germany in 1994
 Company expanded to Australia, Brazil,
Canada, France, Japan,...
 Only 33 % of households have PC, and only 18 % of
households connected online
 The number of online households is expec...
Niftyserve
19%
Biglobe
7%
DTI
7%
AOL Japan
3%
Compuserve
1%
others
63%
Subscriptions
69%
Ads,
Commerce
and other
21%
Enterprise
Solutions
10%
AOL
50%
Mitsui & co.
40%
Nikkei
10%
 Feb 1996
 Founded in 1941
 More than 60000 employees in 60 countries
 Known as the most traditional trading company
 Mitsui’s s...
JAPAN
AOL
41%
Mitsui & co.
13%
Nikkei
4%
DoCoMo
42%
 The marketing strategy initially employed was
based on the strategy that was successful in US
 Mitsui hired all the loc...
 Pre-installed AOL software on each PC
 X free hours of free trial of internet
 AOL tried same strategy in Japan and ti...
 To shrink wrap each magazine with a CD
 In Japan, magazine companies are tough to do
business with
 AOL issued its own...
 Very much successful in US but not
in Japan
 Lack of available mailing list
 Mailing cost is much more in Japan as
com...
 Software CD put on display in
places, where potential
customers might congregate
 Computer store Softmap
 Hit rate for...
 In 3 years, AOL Japan’s market grown over to 3
percent
 Annual growth of new subscribers is 10 to 15% over
two years
 ...
 They did not have the structure to deal with a
global internet giant
 Shared partnerships with media entertainment,
tel...
 Previous mishaps and blunders
 John Barber should have ensured
 More diversified employee base
 Use of different mark...
 Bundling- Japanese PC Manufacturers were
more active in the ISP business (Fujitsu-
NiftyServe)
 Magazine Inserts- Custo...
 Lower the cost of yen/new subscriber
 Promotional activities in schools and colleges
 Loyalty cards
 Subsidized rates...
AOL Goes Far East
AOL Goes Far East
AOL Goes Far East
AOL Goes Far East
AOL Goes Far East
AOL Goes Far East
AOL Goes Far East
Upcoming SlideShare
Loading in …5
×

AOL Goes Far East

908 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
908
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

AOL Goes Far East

  1. 1. Presented by:- Shray Jali LM Thapar School Of Mgmt
  2. 2.  Founded in 1985 as Quantum Computer Services  Offered online services to Commodore business machines  WWW came along almost 12 years later  Company grew at a steady pace  Acquired MapQuest in 2000
  3. 3. Business Unit Type of Business Members Access Acquired or Developed AOL Internet Online Service 19,000,000 Subscription Developed CompuServe Internet Online Service 2,000,000 Subscription Acquired Netscape Netcenter Internet Portal 17,000,000 Free Acquired AOL Instant Messenger Web-based communication Service 25,000,000 Free Developed ICQ Web-based communication Service 50,000,000 Free Acquired Digital City local online content provider 4,300,000 core Free Partnership AOL MovieFone Movie Guide and Ticketing Service 150,000,000 hits in 1998 Free Acquired Spinner Networks Internet Music provider 2,000,000 core Free Acquired
  4. 4.  Started its international expansion with Germany in 1994  Company expanded to Australia, Brazil, Canada, France, Japan, UK, Sweden and Hong Kong  All the joint ventures have been undertaken with a partner in local market  In Japan, AOL chose Mitsui & company (largest and oldest trading company)
  5. 5.  Only 33 % of households have PC, and only 18 % of households connected online  The number of online households is expected to grow significantly  PC growth in double digits from last 3 years  The high connecting cost has been recognized as primary barrier  Lower access charge are expected to reduce this barrier
  6. 6. Niftyserve 19% Biglobe 7% DTI 7% AOL Japan 3% Compuserve 1% others 63%
  7. 7. Subscriptions 69% Ads, Commerce and other 21% Enterprise Solutions 10%
  8. 8. AOL 50% Mitsui & co. 40% Nikkei 10%  Feb 1996
  9. 9.  Founded in 1941  More than 60000 employees in 60 countries  Known as the most traditional trading company  Mitsui’s strength was in Facilitating large transactions for commodity type products  Core competency in import, export and financing  Mitsui had all the connection and money required
  10. 10. JAPAN AOL 41% Mitsui & co. 13% Nikkei 4% DoCoMo 42%
  11. 11.  The marketing strategy initially employed was based on the strategy that was successful in US  Mitsui hired all the local employees in marketing department  The marketing strategies were  Bundling  Magazine inserts  Direct mail  Take-one
  12. 12.  Pre-installed AOL software on each PC  X free hours of free trial of internet  AOL tried same strategy in Japan and tied up with 15 manufacturers  Partnership with DoCoMo, planned to use internet via i-mode cellular phone
  13. 13.  To shrink wrap each magazine with a CD  In Japan, magazine companies are tough to do business with  AOL issued its own magazine, when there is major software upgrade
  14. 14.  Very much successful in US but not in Japan  Lack of available mailing list  Mailing cost is much more in Japan as compared to US
  15. 15.  Software CD put on display in places, where potential customers might congregate  Computer store Softmap  Hit rate for take one’s is much higher than direct mail or magazine inserts  Co-Branding
  16. 16.  In 3 years, AOL Japan’s market grown over to 3 percent  Annual growth of new subscribers is 10 to 15% over two years  AOL Japan looking at 3 different ways to increase their market share  Lower access charge to capture a new subscriber  Take advantage of technology changes and new emerging markets (NTT DoCoMo)  Buy other ISPs
  17. 17.  They did not have the structure to deal with a global internet giant  Shared partnerships with media entertainment, telecommunication and multimedia companies  NTT DoCoMo would have been a better option which spun off Nippon telephone and telegraph in 1992 and had the resources and customer base to help AOL Japan become a successful JV
  18. 18.  Previous mishaps and blunders  John Barber should have ensured  More diversified employee base  Use of different marketing strategies in USA & Japan  Increased Marketing Efficiency  Take-over small-to-midsize ISPs which constitute the 63% of market share  Partnership with DoCoMo to increase the subscribers
  19. 19.  Bundling- Japanese PC Manufacturers were more active in the ISP business (Fujitsu- NiftyServe)  Magazine Inserts- Customer Hit Rate per Yen was low  Direct Mails- higher mailing costs and no proper mailing lists  Take-ones- co-branding and expensive
  20. 20.  Lower the cost of yen/new subscriber  Promotional activities in schools and colleges  Loyalty cards  Subsidized rates for commonly accessed websites  Capitalize on watershed events  Live TV with 3G  Wi-Fi and Wi-Max  Buy other ISPs  Value the assets of company with largest subsribers

×