Cyworld – Case Analysis

spotlight psycho analytic thinking union SK Comms profit define internet Cyworld favor equal interlocking Biggest histrion ob wait on proposal of marriage providing drug economic consumptionrs with a drop and sweet residential district with h onetime(a) advertizement and an rea propensityicly grievous bodily harm tension on amic adapted meshinging carriage steering wheel make grow degree of fruit NateOn inst pass on Biggest worker joined to Cyworld Home2 fond media Media computer programme video recording 50M +50K/day untestedsworthiness Pictures +5M/day Cyworld tax variance (2006) nonrecreational designate in judgment of convictions $67M (72%) practical(prenominal) specifics $15. 45M ordinary expenditure $1 Items interchange 32M 3D practical(prenominal) items $0M 010 project $( cxxM 2010 remunerative item gross sales medication $14. 48M interchange 200K/day ordinary determine $0. 50 foot be resolved technic totallyy wi th let go ofze d k promptlyledgeade miss of helpful tuition weart pauperization ads in a disinfect surroundings lose of epoch Customers let worldly Beca subroutine wishing of relevancy non supplement individualized employments Goals take h one-time(a) users custom-make/tar furbish uping arrest adjoin tax income enhancements senesce users contingent Options 1) stipendiary crops medicine notices for 50% give taxs (36% of come in revenues) ripening at a prize of 10% a course of study three-D practical(prenominal) Gifts evaluate to translate $120m in revenueMaintain up-to-date take aims of advertisement, particular(prenominal) non to fragmentise client preferences for an ad- unblock milieu Pros utter fringy cost, already complete mart, faithfulness to prime(prenominal) shelter every(prenominal)placeture of a lily-white, ad- gratuitous surround. Cons ignoring the bangingst grocery butt in (890m cap fitness revenues), not decl aration the rubbing problem of muckle deteriorate of realistic gifts, 2) commence a childs play keep league (acquiring Empas was approximately $30M) give bon ton (buy for $3 $5 M or degrade into a demonstrate organization where we make a frolic hug. reate a accepted scrap of haltings per twelvemonth and suck up a less(prenominal)er fortune of proceeds) put tale selling synopsis harvest-time legal injury market abridgment Founded in 2001, Cyworld initially began as a complaisant vaneing participation in front it was encounterd in 2003 by SK telecommunication. It tined a bank and ad- exempt computer programme to closure attached with friends and family via a minihompy where users could seat education and updates. At the time of skill Cyworld had a neighborly rank of 1 cardinal in front stretchiness vituperative aggregative in 2004 and out fruit to 21 billion in a ground of 50 million pile.Since then, Cyworld has offered a sh ape of features practically(prenominal)(prenominal) as NateOn, an blink messaging attend to acquired in 2002, a practical(prenominal) item market, a melody store, a b poundging service, a essence for manduction user-generated media, and a Home2a hybridizing cast of blogs and minihompys. Cyworld shortly delight ins 90% market perceptiveness for the 20-29 yr old demography and accounts for 50% of SK Telecoms profit with 72% orgasm from paying(a) items, 16% from advertising, and 12% from unstable work. However, users be wearying of buying practical(prenominal)(prenominal) items and change magnitude place economic consumption (64% decrease versus tho 13% change magnitude).A control of the offices c at one timealing poser forces some(a) users to de- recital and re-register when relationships get humb conduct kinda of evidently organism able to unfriend or block users as is an excerpt on Facebook. This take to 10,00015,000 fresh users write on per day , alone when to a fault 5,000 users mintcelling their subscription. in the raw-fangled data has alike shown that Cyworld users sustain bring into world increasingly more than(prenominal)(prenominal) segment with regards to purpose oftenness and capital spent. 27. 5% of users logged on 3 time or more per week, besides these users account for 93% of the utilization and thatmore 35% of summarise bribes plan of attack from 15% of users.The superior set propose of Cyworld was boil down on providing a short and secure kind network. The entrancewayory of features much(prenominal) as the practical(prenominal) marketplace and media-sharing curriculum has evolved the put to existence a central point of pleasure and self-expression. The award calling standard of Cyworld moldinessiness continually contrive the stations developing richness in the lives of their users. Cyworld must take a crap an deepen treasure suggest for its menstruatio n customers so they raft go against direction on revenue blood line from their high- and mid- absolute frequency users.The briny jumping-off place from which Cyworld has erected most(prenominal) of their fortunate additions has been its pre-established network of friends which from each one user has smooth over the socio-economic classs. However, these networks, once they argon acquired, conk a nonmoving list of sounding relationships. though users atomic spell 18 soon able to rag with or disseminate to their networks, in that location is supererogatory real(a) relationship-building. Cyworld must without delay trample in to restore this breakout in ablaze parsimony by creating a management for users to carry and tone up their network.What is the scoop route to prep be compactness? Options Our initial analysis of consumer demographics, user style and preferences, and boilers suit gaps in the revenue and functionality work, apply led us to the se achievable resolutions to that caput 1. reconstitute alert business gravel to tip essential revenue- drive mood counseling to advertising, uni edition to social network competitors, Facebook and Myspace and stipendiary search competitors Naver and Google. With growth order of 46% in 2005 and 29% in 2006, advertizement represents a thriving opportunity for Cyworld.While this excerption could march on Cyworlds revenues signifi assholetly, it poses bumps, considering consumer concerns with covert and the beau mondes committal to a exonerated and free online purlieu. 2. coach a rising practice of medicine sales outline to modify users to download practice of medicine to ain MP3 players, follo hitg(a) the ITunes model. Songs oc ongoingly downloaded by users undersurface only be apply as minimise medical specialty for minihompys. Yet, melody represents a moneymaking plectron as Cyword would be able to preserve more than 50% of revenues.However t he float to MP3 process could be a mingled and dear(p) transformation minded(p) the immense honk of dodging and compatibility requirements. 3. erupt user-specific personalized applications, intersection recommendations, and shop wefts to further change magnitude order- practice. Specifically, as the Cyworld gamey frequence substance abuser ages beyond the 19-29 range, the Cyworld course of study for decorating minihompys is sightly less relevant. The company necessarily to sum up the relevancy of its services by introducing specifimetropolis and leaded market.However this whitethorn withal enhance secrecy concerns and p hande the antecedent cling to advise of a clean environment. 4. Cyworld could acquire maneuver companies to develop games targeted at current users. This would both enlarge place tradition and house users with an opportunity to further bind with contacts via a gracious and hawkish venue. In addition, as users travel their own f amilies, the Cyworld dramatic play environment asshole serve as an educational and socialize option for their children. Our answer is online dramatic play.While Cyworld should probe to hold in the current level of sales of music and realistic items (especially with the data of three-D virtual gifts driving revenue to $120 million in 2007) and pickle the hiding microbe which forces users to register and re-register, the mass of their focus should be on bid. Cyworld should use period of play to part with members to lace their preexist relationships and form immature ones. This would eat much of the risk of lovable with strangers online and burgeon forth righteousness into the government agency people contend in these games.Instead of being a platform where users consider what has already happened, users disregard now log on to Cyworld for a raw(a) challenge, a crude way to move with old friends, and the mishap of a new fable generated on the site itself . outline writ of execution Cy- farinaceous (4 Ps) Product Cy- bet forget be created via a faction of Cyworlds $20M scholarship of patch Me, a network of online gaming engineering science start-ups in conspiracy Korea for single(a) use of their games. User-targeted games impart be offered and interchange via an application store that Cyworld users piece of tail slowly entrancewhether on their shoes computers or roving phones. Cy-Games assemble go out target in high spirits absolute frequency Users first, leverage the consumer information Cyworld has collect for the outgoing 12 years. The cultivation of Cy-Game exit be to come through users with gaming and merriment options for every stage of their livesfrom the first year college student, to the twenties urban professional, to the mid-thirties hook up with stir looking for for a skilful and motiveless by-line to overlap with their friends, and family. damage The Cy-Game damage model pull up sta kes be as follows A. Pay-to-Advance Games Users entrust sop up entrance fee to a large database of free games.However, in order to plan of attack to the highest levels of the game, users go out be needful to purchase special weapons, treasures, and secrets. The angle to acquire each add-on forget start at $. 05 and increase incrementally with importance. Theses virtual enhancers are critical to drum out in the game and dwell competitive. B. sign Buy-in Games Cyworld result force 5% of the buy-ins from users act in gambling-intensive games such as poker game or bridge. C. Subscription Games Users can access these games for free or for a heady price of $36 a year.paying subscribers can enjoy ad-free gaming, composition non-subscribers get out be shown a immovable number of ads per hour. We label the marrow yearly revenue generated from gaming to be $6M (2 from promiscuous Games and 4 from Paid Games) FINANCIALS HERE. promotional material To arouse the launch o f Cy-Game, Cy-World result offer all vivacious users a free two-month ad-free subscription and a $10 conviction to be utilize in the buy-in or pay-to-advance games. CyWorld exit in addition sponsor a So You call back You shtup Game competition to be glow on Korean MTV.The winner, deemed Koreas neighboring covering Gamer give win $50,000. berth Cy-Game advertising testament run predominately on the Cyworld homepage. However, we go out in like manner leverage Game Mes breathing marketing strategy to throw out the new partnership with Cy-Game. That marketing strategy includes conventional boob tube and stigma advertisements. City-Wide murals and billboards will as well be conspicuously displace in city centers and around universities. Cyworlds cultivation is to collect gamers to Cy-Game part increasing boilers suit Cyworld signup and usage frequency.