Individual assignment #1
1. Cyworld has a competitive advantage that it is blended of a social networking site, blogging site, photo sharing web site, and even videogamelike avatars. This interestingly-blended one allows customers to value it more than competitors like Myspace, Facebook, Friendster, Yahoo 360, etc, which are text-heavy bulky sites of social networking. Thus buyer power is low, supplier power is high even though there are some other social networking sites like Myspace, Facebook, etc. To create this competitive advantage, Cyworld increased switching costs by letting users manage their "identity" as well as their "profile" in their "minihompy", which is differentiated from other text-heavy social networking sites. In specific, Cyworld has an avatar called a mini-me and a personal space called a mini-room, so users can visually decorate the virtual things by purchasing dresses for a mini-me or furniture for a mini-room. It is because users regard the visual things like "mini-room" and "mini-me" as a tool that can represent their identity. So administering "minihompy" is a process of remaking oneself online and showing it to others, which allows users to willingly invest their money into it. Thus this uniqueness decreases the threat of substitute social networking sites of Cyworld. Like this, the threat of new entrants is low because there are many entry barriers to enter a market of social networking sites including this uniqueness. And this unique feature also decreases the level of the rivalry among existing competitors. (this is what I picked one and described Cyworld’s managing it.) Myspace similarly operates according to the five forces above, and the competitive advantage is focusing on making new personal connections online according to their main interesting field like habit or job, and maintaining global networking. Of course each level of the five forces are a little different from that of Cyworld and it...
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