sse virtual worldsforapps_group4a_presentation_ver
TRANSCRIPT
INTERACTIVE CITY – COMPETITOR ANALYSIS
Group 4A7th of February 2011
Definition of Market – Social Online Shopping
Feature Interactive City
eBay Entropia Universe
Facebook Second Life
Social Network X X X X X
Applications for mobile/tablets
X X X X
3D Graphic X X X
Games X X X X
Real ShoppingX X
Virtual shopping X X X X
Mobile X X X
Business Model Percentage per transaction and DNA Store commission Advertising Affiliate Solution CPL and CPA
Profitability Negative – 9MSEK in 2009
Performance N/A as the product is yet to be launched
Business Model advertising listing and value fee merchant fees revenue sharing agreements contractual service fee and classified and lead referral fees.
Profitability Yes. Approx $6 billions in 2009.
Performance Very high. High number of users and retention rate
Sustainable competitive advantage
- 81 million active users
- Hard to reach to same level of trust.
Business Model revenue from advertisements facebook credits User DNA
Profitability Strong $1.86 billion in 2010
Performance Very strong. High numbers of active users (500 million active users)
Sustainable competitive advantage Hard to reach similar amount of users, the availability on all
platforms and trust for the brand.
Business Model Micropayments and premium accounts
Profitability Unknown profitability
Performance OK; declining number of user vs. growing
volume of purchases
Sustainable competitive advantage user base attracting other user and businesses
Business Model Planet partner (50/50 split of revenues), “real estate” –
transaction payment, Micro payment, own virtual currency PED
Profitability Negative Net Profit (Jan-June 2010) minus 13 MSEK
Performance Good with its unique business developing process 1.2 million users Size of virtual economy approx. 400 MUSD
Sustainable competitive advantage Technology and management Experience in 3D ( VW) industry. Controlling the “virtual economy”
Strategic Importance
Rela
tive
Str
ength
icR1
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icR3
icC1icC2
icC3
eR1
eR2
eR3
eR4
eR5
eR6 eR7
eC2
eC1
euR4
euR5
euR2
euR3
euR1
euC1euC2
fR1
fR2
fR3
fR4
fR5
fR6
fC1
fC2fC3
sR1
sR2
sR3
sR4 sR
5
sR6 sC1
sC2
sC3
icR4
Resources and Capabilities of Interactive city and their competitors
VRIS Analysis of Interactive CityResource or
CapabilityValuable
Rare Inimitable
Substitutable
Competitive consequences
Platform Yes Yes No Yes/No Temporary
AffiliateYes No No No Competitive
parity
PartnersYes No No No Competitive
parity
VOIPYes Yes/
NoNo No Temporary
Innovativeness
Yes No Yes/No No Temporary
Integration of features
Yes Yes No No Temporary
International market coverage
Yes No No No Competitive parity
SWOT analysis of Interactive City
Strengths•Quality graphics•Multiplatform•Unique combination of user experiences•International market coverage•First mobile application•No virtual currency
Weaknesses•Unsustainable competitive advantages•Lack of financial resources•Unfinished product•No users•Tarnished company reputation•Limited support of mobile platforms•Legal regulations of international trade•Unknown brand
Opportunities•First mover advantage•Many potential affiliates•Many industries ready to enter virtual worlds•Rising popularity of smartphones•Large potential user base
Threats•Big, well established competitors•New entrants, “Copycats”•Lack of user interest•Smartphone application distributor restrictions
Conclusion Fast-moving highly competitive landscape IC You’s current competitive advantages are
unsustainable and you need to find new ways to compete for users hard earned attention
eBay and Facebook are potential threats to Interactive City in the near future
IC You need to finish the product immediately and start to attract partners and users
Key factor for success – attract more users than competitors and retain them by offering a better user experience
Bibliography
Collis, D.J. & Montgomery, C., “Competing on Resources”, HBR, 2008.
Ebay Annual Report 2009 http://investor.ebayinc.com/faq.cfm (2011-02-01)
Facebook Factsheet and statistics http://www.facebook.com/press/info.php?factsheet (2011-02-03)
How Sustainable is Facebook’s Competitive Advantage? Jan 7, 2011
http://webupon.com/social-networks/how-sustainable-is-facebooks-competitive-advantage/
Facebook Books $1.86B in Advertising; Muscles In on Google Turf January 17, 2011 (2011-02-01)
IC You Annual Report 2009 (2011-02-01)
IC You interview and lecture at SSE 31th of January 2011
Interactive City www.interactivecity.com (2011-02-01)
Mind Ark Financial Report (2011-02-03) http://www.mindark.com/press/financial-reports/documents/SemiAnnualReportJanJun2010_eng.pdfRe
MindArk lecture at SSE 31th of January 2011
Porter, M.E., "What is Strategy?", HBR, 1996
Resource and capability model - Grant 2008 - Robin Teigland Lecture 24th of January 2011
Second Life http://adage.com/digital/article?article_id=148236
http://blogs.secondlife.com/community/features/blog/2011/01/26/the-second-life-economy-in-q4-2010 (2011-02-01)
SWOT Analysis – Jobber. Principles and Practices of Marketing. 5th Edition. 2007. McGraw Hill. P.47-49
VRIS - Model Hitt, Ireland, & Hoskisson 2006 - Robin Teigland Lecture 24th of January 2011
Youtube clip Interactive City Demo http://www.youtube.com/watch?v=_p7uxIX3Zfo (2011-02-05)