Case Study: Skype
1. Describe the environment in which Skype competes based on the three characteristics of high-tech markets (Chapter 1). Skype competes in the Internet telephony market, which provides voice-over-internetprotocol (VOIP) services to users. This allows users to install the software on their computers and make call through the Internet for free. Skype makes small charges for per-minute calls to landlines and mobile phones. The three common characteristics of high-tech markets are 1) market uncertainty; 2) technological uncertainty and 3) competitive volatility. 1) Market uncertainty a) The users are uncertain about the security and potential vulnerabilities exposed by the Skype system. Users doubt the reliability of the system. It is often not used for making emergency cases or highly important matters like calling the ambulance or police. b) There exist different VOIP platforms. There is platform dependency, where only Skype users can make calls to users who are using the Skype platform. c) Users move in herd behavior and there is increasing popularity in using social platform like MSN messenger, which also provides VOIP service. Thus there is a shift of users to more popular platform. 2) Technological uncertainty a) Windows update caused potential glitch in the system. This caused blackouts to users, which caused lost of trust in the Skype system. b) Users doubted the privacy security of the system, which could be intruded by unknown strangers calling using Skype. c) Users can easily disguise themselves and falsify their identities when registering to use the platform. Thus unregulated membership increases the rise of misusing the technology for crimes. 3) Competitive Volatility a) There is an increasing direct competition from large competitors such as Yahoo, MSN and Google. These players have diverted Skype users as this free voice-communication over the net is integrated into each of the social platform. As the network becomes larger, some of...
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