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Aol Case Study - 2

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  • April 2011
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FSA Case: American Online
Name Avantika Gupta Alok Dhawal Harsh Misra Deepthi Arumalla Ravi Jewani

e: American Online
Roll No 2008a19 2008b28 2008c 2008a36

Prior to 1995, why was America online (AOL) so successful in the commercial onlin

The reasons for the success of AOL were manifold. Not only was it a pioneer in many new o retain and capture customers. The following are a few reasons for the 4 million users it ha 1. AOL found ways to coordinate its pricing and compete on nonprice dimensions, such as inno 2. It also had the first mover advantage.

AOL followed the differentiation strategy. This strategy gave AOL added benefits in becoming the market leader prior to 1995. AOL f

Supply a unique product or service at a cost that was easy to understand by the c Superior product variety : AOL offered a lot of added services to the customers. Superior customer service Investment in brand image

American online was a leader in the development of new mass medium that encompassed 1. Online services 2. Internet 3. Multimedia and other interactive tecnologies

AOL generated revenues from the following means: 1. Consumers : Through membership fees and usage per month 2. Content Providers 3. Merchandisers : Through advertising, commissions on merchandise sales and other trans 4. Other Businesses: Through sale of network and production services.

AOL pursued continuous investment in the following to position itself as a leader in the de 1. Growth of its existing online service and related businesses. 2. Ability to provide a full range of interactive services. 3. Technological flexibility.

The strategies that AOL followed were: 1. AOL’s rate structure was the easiest for the customers to understand and anticipate. Thu in an environment when the other service providers had complex rate structures. 2. AOL invested in specialized retention programs including regularly scheduled online even and new features and the addition of new content, services and...

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