Skype is an eBay company founded in 2003 that created voice communications software that allows users to communicate with people around the world via the internet. (Skype Limited, 2007) “Their particular spin has been to create a business model in which the basic service is free.” (Gosling, 2006) 1.1 Problem
The problem is that this is not new software or service as other phone service providers offer the same or similar service. They must show how their service will outdo the rest. 1.2 Purpose
The purpose of this case study is to explore what makes Skype different from its competition by analyzing the strengths and weaknesses of the company and by determining the opportunities and threats they may face. 2. SWOT ANALYSIS
Skype has several advantages that place it above its competition. First is the cost advantage to users. It’s free. That is if the person you’re calling is a Skype user as well. But if they are not, then calls placed to normal phones or mobile phones are charged a very low price. Typically this cost is about $0.02 per minute for calls made in the USA. (HL7 Systems & Services, 2007) Second, Skype has no expenses associated with marketing and advertising. With more than 25 million registered users, Skype’s reputation was built mainly by word of mouth. (Gaskin, 2005) Therefore, unlike their competitors, they don’t have to spend money trying to find customers. Third would be the “user-friendly” set up and configuration. Ease of use always plays a significant role in convincing users to sign up. Last, the call quality is rated as exceptional. Skype controls transmission efficiencies in digital voice and broadband networks, thereby transmitting the full frequency range of human hearing. (Gaskin, 2005) 2.2 Weaknesses
The main limitation that exists with this service is that in order to use it, your computer must be turned on and anyone you call must have the service running on their computer to...