Cyworld Case Study Analysis

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Case analysis report:
CYWORLD

Class: BIZ2117

Section 6

I, HONG DOO(2009122198)
CONTENTS

1 . Introduction ------------------------------------ 3
2. Environment analysis --------------------------------- 3
2 -1. Bargaining power of suppliers -------------------------

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2 -2. Bargaining power of buyers --------------------------

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2 -3. Threat of new entrants ----------------------------

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2 -4. Threat of substitutes -----------------------------

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2 -5. Rivalry among competitors ---------------------------

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3. Company Analysis --------------------------------- 5
3-1. history of Cyworld ------------------------------5
3-2. Core competences ------------------------------6
3-3. value chain ----------------------------------- 8
3-4. Present Situation -------------------------------8
4. SWOT analysis ----------------------------------- 10
4-1. Strengths -------------------------------------

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4-2. Weaknesses -----------------------------------

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4 -3. Opportunities -----------------------------------

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4-4. Threats --------------------------------------

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5. User Segmentation -----------------------------------

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6. Recommendations and conclusion ---------------------------

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7. Bibliography -------------------------------------------------- 16

1. Introduction

Nowadays, the concept of communications has been moving to the internet. Consequently, most of web-users no longer see the internet as a method just for gaining simple information, or email. Now consumers want their own specialized room on the web through which they can socialize with others everyday and express themselves. However, it is definitely true that deriving consumer s needs into creating and capturing commercial value for a company on the internet is a difficult process. In the aspect of this term, analyzing SNS(Social Network Service) industry which has been making a significant growth in the world is a good chance to learn how to deal with customer satisfaction(CS).

2. Environment analysis

As mentioned above, it is necessary to analyze SNS industry broadly before looking into one specific company. In 1979, Michael E. Porter formed a framework for industry analysis and business strategy development and we will use this model to systematically understand the context of SNS industry.

Porter's Five Forces mod el analysis for Social Network Industry

2-1. Bargaining power of suppliers
The bargaining power of suppliers within social network industry is small. Social network industry is not based on material resources such as steel, woods, or oil. The website is made and run by professional programmers who are specially educated. They provide main structure of the site and software, however, the success of social network is more based on self-production of contents by its users. Also, companies in this industry usually hire their own programmers so the role of suppliers in this industry is not that important. 2-2. Bargaining power of buyers

The bargaining power of buyers is relatively strong. When users firstly get settled down at certain social network, the only thing they do is just to sign up. Even if they have used one network for quite long time, it s not hard to find other networks and move on, by clicking close the account . The only factor which can prevent users to move out is the accumulated user network and data base. Some people who are not satisfied with the network would keep using it to communicate with other friends in that community as far as other people do or/and there are useful sources saved. However, when a group of people start to escape, it s...
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