Case Analysis

Case Analysis AOL Example

The following is not a complete analysis of the AOL case. Be sure to include all 4 major parts described in the Case Assignment. This is an example of some responses from students who identified the following facts relating to AOL.

Strategic Objectives  Dominate the Internet home access market  More controlled growth while managing costs  Focus on making profits  Continue aggressive marketing of the AOL brand  Appeal to the inexperienced user with easy-to-use approach  Form strategic alliances with retailers and technology providers  To move from B-to-C and B-to-B

Cost Strategy  Major effort to reduce costs of doing business  Force advertisers to bid against each other for the right to advertise  Shift from growth to profitability

Differentiation Strategy  Appeal to the average person, not the techie  Ensure AOL is extremely easy to use and install  Features such as chat rooms and portfolios  Market AOL brand in many ways

Innovation Strategy  Develop a newspaper feature called AOL Direct  Common interest web pages located in hometown AOL  Updating the AOL software to enhance simplicity of use  Possible peace negotiations with Microsoft  Looking at AOL TV to compete with WebTV

AOL Successes  Overcame organizational problems  Captures 50% of home use of the internet  Drove down the price of doing business  Appeal to the common man very successful  AOL’s aggressive marketing produced great results  Tremendous growth

AOL’s Use of Technology  Servers  Telecommunications Technologies  Web design  Use technology to produce easy to use environment  Provide a forum for customers and retailers to sell goods and services  Use online setup and billing services to reduce costs

Problems to overcome  Infrastructure, Overloaded networks  Advertising space is being pushed  Fierce competition with entering ISP’s  Develop new ways to overcome competition  Further reduce costs  Integrate new technologies

Business Strategies and Use of Technology

Black are advantages, Red are disadvantages Customers Suppliers Competitors New Entrants Strategic 1. Easy to Use 1. Improve Quality 1. Increase Svcs 1. Leverage 2. Customer Svc 2. Target Svces 2. Svc Quality Infrastructure Objectives 3. Mnge Growth 3. Reduce Outage 3. Reduce 2. Internet only Overload svc. Cost 1. Reduce usage 1. Decrease 1. Switching Cost 1. New costs infrastructure 2. Low cost Technology Strategies 2. Fee for costs Competitors service 2. Leverage Technology. Differentiation 1. Front-end 1. High Profile 1. Usability 1. More Svcs Internet 2. Integrate new 2. Simplified 2. Technology Strategies 2. Internal svcs technologies Technology Alliances Innovation 1. Bundle of 1. New products 1. More Svcs 1. Product Svcs 2. Broker Svcs 2. Slow to Alliances Strategies 2.Cluttered introduce new 2. Depth Services screens svcs

Technology Strengths 1. Interface 2. Usability 3. Depth of services 4. Network 5. Rich functionality 6. Strong Supplier support

Technology Weaknesses 1. Problems with E-Mail, system outages 2. Many users still have trouble with software 3. Increasing competitors with low cost infrastructures 4. Customer service is still weak