Skype Case Study
Name: Lee Huan Hong, Kevin Matric No.: A0077101U
1. Describe the environment in which Skype competes based on the three characteristics of hightech markets (Chapter 1). Market Uncertainty Market Uncertainty refers to the ambiguity about the type and extent of customer needs that can be satisfied by a particular technology, and arises from the following five sources: (i) Customer’s fear and doubt in the usage of the new technology that may result in slow adoption Customers will ask if Skype’s service will be easy to learn and use, will continue to serve their needs over time, and will not be incompatible with other technology the customer uses. (ii) Rapid changing needs of customer The volatility of internet customers (especially the ones that go for free services) as well the rising number of competitors that offers these ‘free’ services contributes to this uncertainty. (iii) Ability of the new technology to be ‘back/forward-compliant’ with existing or future technologies Customer who purchase handsets for VOIP services will question if the handsets allow future software upgrades or whether they support multiple services providers (for e.g. Google Voice or Apple’s Facetime), (iv) Diffusion rate of the new technology See answers below (v) Size of the market. Although Skype has 220 million registered users in 2008, fewer than 20% were actively using the site. This leads to the inability to predict the market size, and consequently also impedes the ability to predict the diffusion rate. Technological Uncertainty Technological uncertainty refers to not knowing whether the technology or the company can deliver on its promise. There are five uncertainties that are commonly being asked: (i) Will the new innovation function as promised? So far Skype’s free ‘conference-call’ performance is still rated the best in the industry. Will the product be available as promised (any delays)? Will the promised VOIP services be delivered on time in Windows Mobile...
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