Question 1
Question One
SixDegrees.com was the first social media site to have ever been created at its time. SixDegrees.com hoped to achieve massive success since it was a new concept introduced on the internet. However, as a first mover on the internet, SixDegrees.com experienced several disadvantages as follows.
• As a first mover, SixDegrees.com needed to become more familiar with any mistakes and the needs of potential users. The company gained popularity but experienced challenges that its developers had yet to anticipate. Nevertheless, it was only a matter of time before the company needed more funds and closed down. The company also created a site that needed more features to keep the users engaged. With time people left, and the company closed, but the competitors learned from its mistakes, and others companies with better strategies were soon made.
• SixDegrees.com was disadvantaged as it lacked a proper profitable model. Even though the company had the potential for success and revenue creation, it needed to gain experience in creating a profitable model. Being a first mover means the company would develop its economic market and thrive. The process of creating the market and, at the same making profit from the market seemed challenging; hence the company closed down.
Question Two
MySpace became more successful since it learned from the mistakes of the previous sites and leveraged the popular features of Friendster. Apart from learning from Friendster’s mistakes, MySpace also introduced new features, such as making member profiles viewable by all users and enabling members to customize their profiles. MySpace also had a lot of users compared to Friendster, as it took advantage of 20 million subscribers and e-universe email users.
Facebook, on the other hand, came into the market when the popularity of social media was already being attained. Facebook’s success is attributed to the fact that by the time it joined the market, it was not difficult to gain investors. Facebook would also succeed due to its unique features, such as avoiding advertising in its early years so that members could enjoy interacting with each other. Another factor that made Facebook successful was better security which attracted new users.
Question Three
Switching costs refer to the costs a person incurs as they switch from one brand to the other. Social media use refers to the cost users encounter when switching from one site to the others. Currently, people choose a site where they can be connected to as many close people as possible. The eminent switching cost due to such a phenomenon is the loss of connections. When a user chooses to switch from Facebook to another site, they lose connection to people who can only be found on Facebook. Another switching cost is effort-based and time based, whereby when one is on a site, they have to learn the rules and build a following for engagement. When they switch, they will have to spend time and effort learning how to use the site and building another following.
Question 2
Question One
Innovation entails the process of taking a product or a service and then making it better. It ranges from simple changes in products and services to make them better to complex changes that overhaul entire business models. There are several types of Innovation, such as production process and business model innovation. Product or technology innovation entails the introduction of a new product or the improvement of existing products. New technologies are often the basis of such kind of Innovation. Business model innovation entails changing the business model to incorporate current changes, such as digital technologies, and creating a whole new kind of business. Most successful companies often innovate their business models to capture customer value, and in the end, they create a whole new type of business so they can stay relevant in the market. Process innovation is a type of Innovation that focuses on improving efficiency and effectiveness in production. It often entails the introduction of technological methods that would improve how a product is processed or how a service is delivered. For instance, the automation of the manufacturing process is a type of process innovation.
Other than the above methods, Innovation is still categorized into various categories. One of the most prominent categories is incremental Innovation, which entails using existing technology in the existing market. The goal of such kind of Innovation is improving an existing product or service through changes in design or adding new features. The most common example of incremental Innovation is in the electronic industry where most innovations include updating hardware and adding new features. Architectural Innovation entails using expertise and skills and applying them it different fields to enable a business to enter new markets. For instance, tech giants like Google use apps and platforms so they can offer different products to clients.
Question Two
The Innovation experienced at Netflix is business model innovation. The company started with a different model that entailed renting DVDs to customers. Over time the company has had to change its business model to include services that are most relevant to its customers. Technological changes affected how people get access to films necessitating the company to change its model so it can continue appealing to a consumer base that needed streaming more than renting DVDs. The innovation category is incremental Innovation. As it is evident, the company had to employ the use of existing technologies to change its business models. Netflix’s business model changed as technology became more enhanced and new trends emerged in the entertainment industry.