Cyworld: Creating and Capturing Value in a Social Network
Answer 1. Reasons why people use social networks:
1. Connect: Social networking sites let you connect virtually with anyone. Almost anyone with a computer or a phone has a presence online. Social networking sites are one of the easiest ways to connect with friends and family and also make new friends. 2. So very easy to use: One of the main and most basic things that everyone overlooks is that Internet usage has become very easy. With the emergence of faster networks, better hardware and superior software it has become very easy and streamlined for not only young children, but also elderly citizens to use Internet and anything available on it. For example, my mother doesn’t know how to drive a car, but she knows how to use Facebook. 3. Give me more: Social networking sites have grown, they don’t only let people connect with each other, but also allow consumers to do a lot of things. For example, people can now play games, upload photos, share videos, tag others in photos and videos, let others know where they are, watch movies, share music and use a lot of other applications. They have become a nexus that let people do almost everything in one place. 4. Even businesses use Social Networks: Social networking sites are one of the main reasons why traffic has increased online. People spend a lot of time on these websites and because of this businesses have started using them for marketing their products and services. Websites like Facebook, Google and yahoo earn majority of their income from advertising. Businesses also use a social networking website LinkedIn to recruit employees.
Answer 2. Cyworld’s can be segmented on the basis of needs: 1. Connection seekers: Many Cyworld users want large number of friends. Activity and purchases are not important criteria’s for them. 2. Creativity seekers (buyers): The one feature that differentiates Cyworld from other social networking sites is that it allows the users to customize their minihompy using virtual items. This feature lets the user be creative and make their profile different. Since paid items are an important part of Cyworld’s business model, this segment is very important for them. 3. Sharers (active users): This segment is primarily interested in sharing their personal items like photos and videos. This segment is one of the most active users as they constantly update their profile. These are different from connection seekers because activity is not an important criterion for them. 4. Career seekers: The case talks about 2 Cyworld users who became famous after posting recipes and photos of collection of dolls and clothes. Such social networking sites are a good medium for users to advertise their talent and look for better job opportunities.
Cyworld can form value for these segments by doing the following: 1. Connection Seekers: It will be a little difficult for Cyworld to form values for this group with the challenges it’s facing. As Cyworld approaches the saturation point, it will become difficult for connectors to find and make new friends. To tackle this, Cyworld will have to expand; this can be done by offering its services in other countries. This way users will be able to connect with friends and families from other country. Cyworld can also let its users form communities where they can discuss things that they find interesting. Communities can also be formed by businesses to market their products. 2. Creativity Seekers: Cyworld needs to take into consideration the second challenge (users getting tired of paid items) it is facing to create values for this segment. Paid items are one of the most important features Cyworld has to offer, if users get bored of it then there is a big chance that they might move to other networking sites. To stop this from happening Cyworld needs to introduce new and fresh features. • Cyworld can offer more options for...
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