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Business Case Analysis: MySpace Company Case Study


MySpace.com Company: A Brief Background

In the recent past, the number of companies operating in the social networking industry has risen exponentially. The rise is attributed to, among others, the increased growth in information and communication technology (ICT). The companies operating in this field include, among others, Facebook, Linkedln, and Twitter.

Facebook is perhaps one of the largest and most dominant of these companies. MySpace is another company operating in the global social networking industry. Currently, this company has approximately 125 million users (CrunchBase, 2013). The site provides internet users with a platform to connect and share with each other with regards to culture and content.

Compared to other companies operating in this industry, MySpace is a relatively old company. It was a leading player in this industry in 2005. In spite of this long history, there are several issues that are currently facing the company. When the company was started, the founders wanted to exploit the socializing potential among internet users. However, the economic potential of the company was only realized when it was purchased by News Corporation.

In this paper, the author carries out a critical analysis of the company from a business perspective. A number of frameworks, theories, and concepts that were introduced during the semester are used in this analysis. The problems facing the company, as well as the underlying causes of these problems, are analyzed. Finally, recommendations are made to address these issues.

MySpace.com: A Detailed Company Analysis

Key Issues Affecting MySpace.com

When it was acquiring MySpace, News Corporation was hoping to make profits from the venture. However, MySpace is facing a number of critical issues that News Corporation needs to address if the envisaged returns are to be realized. The key issues include, among others, the following:

  • Competition from other social networking sites. The industry is saturated with many players offering similar services. The competitors include AOL, Yahoo!, and Facebook.
  • The need for the company to generate revenue through advertisements, especially from the big brands in the global market.
  • The need to enhance user confidence in the site, especially with regards to content.
  • The need to strike a balance between revenue generation and user satisfaction.
  • Keeping up with changing trends in the industry. Such changes affect access platforms and the generation of user friendly features.
  • The need to transform the users of the site into customers, or at least make them potential sources of revenue generation.

Analysis of Key Business Issues

It is noted that MySpace has an outstanding potential for generating revenue through social networking platforms. However, the issues the company is currently facing can easily lead to its demise. Opportunities for the company are immense, but the management is unwilling or unable to exploit them.

Marketing strategies and decision-making processes are major impediments to growth and future direction of MySpace. Upon acquisition, it was realized that the marketing objectives of existing MySpace managers differed significantly with those of News Corporation technocrats.

The management at News Corporation is more concerned with generation of profits. However, the founders of MySpace are more concerned with user satisfaction. Both dimensions are important. However, the varying objectives may result to losses. Intense focus on customer satisfaction may render the company unprofitable. On the other hand, intense focus on revenue generation may lead to low quality services. Such services may push users away from the site.

The ethical issues surrounding the services offered by MySpace are critical to the company’s business model. Majority of MySpace users are youths. Their parents and guardians are worried about glorification of sex and drugs in the site. The system does not clearly define the nature of the content promoted.

Recommendations

Several measures can be taken to address the issues facing MySpace.com. Decision making should take the center stage in the operations of the company. The management and the development teams should be separated. The decisions made by MySpace developers and News Corporation should be harmonized to come up with shared objectives for the company.

The company’s value chain also needs to be addressed. According to Laudon and Laudon (2013), the company is currently using the push-based supply chain model. The model predicts customer demands and then pushes products to them. Developers of MySpace should also desist from focusing solely on customer satisfaction. The management at MySpace should provide services targeting the predicted customer demands. The management should also make efforts to increase revenue generation without compromising quality of services.

The internet is changing at a very fast pace. As such, focusing on one aspect of an online business, such as customer satisfaction, can result to losses in the long run. Speedy exploitation of online opportunities is paramount. Failure to do this gives competitors an edge in the market. As such, the need for revenue generation at MySpace should be balanced with the need for customer satisfaction.

Enhanced management of customer relations and clearly defined user policies will boost the confidence of the customers. However, the policies should not stifle business. Lack of clear boundaries in with regards to content can endanger the survival of MySpace in the industry.

References

CrunchBase. (2013). MySpace. Retrieved from

Laudon, K., & Laudon, C. (2013). Management information system 13e: Managing the digital firm. New York: Pearson Higher Ed.

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IvyPanda. (2020, July 3). Business Case Analysis: MySpace Company. Retrieved from https://ivypanda.com/essays/business-case-analysis-a-case-study-of-myspace-company/

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"Business Case Analysis: MySpace Company." IvyPanda, 3 July 2020, ivypanda.com/essays/business-case-analysis-a-case-study-of-myspace-company/.

1. IvyPanda. "Business Case Analysis: MySpace Company." July 3, 2020. https://ivypanda.com/essays/business-case-analysis-a-case-study-of-myspace-company/.


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IvyPanda. "Business Case Analysis: MySpace Company." July 3, 2020. https://ivypanda.com/essays/business-case-analysis-a-case-study-of-myspace-company/.

References

IvyPanda. 2020. "Business Case Analysis: MySpace Company." July 3, 2020. https://ivypanda.com/essays/business-case-analysis-a-case-study-of-myspace-company/.

References

IvyPanda. (2020) 'Business Case Analysis: MySpace Company'. 3 July.

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