Introduction
The case of King.com reveals how a competitive business model can make a significant difference for every organization. The success of the company’s Candy Crush in a flooded market explains why the freemium model has become appropriate for many businesses. This paper discusses various attributes, business models, and approaches that have made King.com successful.
Do you agree or disagree that freemium business strategies can provide a company with a competitive advantage?
I strongly believe that freemium business strategies can improve a company’s competitive edge. The model is designed in such a way that customers are willing to pay for extras. For instance, the concept allows players to download apps and play games for free. However, every user is enticed or compelled to pay for extras in order to complete certain levels. That being the case, a company that uses the model finds it easier to attract and retain many customers.
The firm can go further to charge for extras after the limited time for using the service expires. Organizations that embrace the model can make profits since the targeted customers will be willing to make in-app purchases. Users can also buy complete virtual products after their trial versions expire. However, this model will only be appropriate for firms that marketing services but not physical goods.
Why are data, information, business intelligence, and knowledge important to King.com? Give an example of each in relation to a customer playing Candy Crush
Data, information, business intelligence, and knowledge are important to King.com. To begin with, data can be used to monitor the number of Candy Crush players, downloads made in a day, and purchasing patterns. The collected data can then be organized to come up with adequate information for effective planning. The information focusing on Candy Crush’s performance in the market can make it possible for King.com to improve the nature of its marketing and freemium models.
Business intelligence is appropriate for the company because it can ensure data is analyzed to present meaningful information. This understanding guides the company to make appropriate decisions such as customer satisfaction and improvement of Candy Crush. Knowledge is the totality of information or understanding associated with Candy Crush. This knowledge can be used by King.com to engage in continuous research and development (R&D). The ultimate objective is to improve Candy Crush, introduce new features, and make it enjoyable to every player.
Analyze King.com’s Candy Crush, using Porter’s Five Forces. If you have one million dollars, would you invest in Candy Crush?
Porter’s five forces can be used to analyze the performance and position of Candy Crush in the market. A detailed analysis of the app using the tool is presented below:
- Threat of new entrants: Candy Crush appears to be threatened by emerging apps and games in the industry. However, its competitiveness decreases the performance of new entrants in the market.
- Buyers’ bargaining power: The power of customers is low since King.com uses a freemium model to meet their needs. The absence of desirable alternatives in the market also reduces the power of different users.
- Threat of substitutes: The level of competition arising from similar apps or alternatives is moderate. Customers can consider emerging or existing gaming apps in the market.
- Suppliers’ bargaining power: Candy Crush is not threatened by suppliers since the app is technological in nature. Users can download Candy Crush for free from different online-based platforms.
- Rivalry in the industry: The level of competition in this industry is quite high. However, King.com has managed to develop an app that is user-friendly and admirable. Different firms also have superior games or apps that compete directly with Candy Crush.
This analysis shows conclusively that Candy Crush is a competitive app in the gaming industry. The app’s superiority has lessened the problem of competition in the market. It is also embraced by many customers across the globe. Consequently, the company’s apps generate over 1 million dollars daily. I would, therefore, be willing to invest in Candy Crush if I had one million dollars.
According to Porter’s there generic strategies, where does King.com’s Candy Crush reside?
According to Porter’s generic strategies, it should be observed that King.com’s Candy Crush resides in the Cost Leadership segment. This is the case because the model is associated with companies that minimize costs while at the same time delivering quality products to their customers. King.com has increased its market share by attracting more customers using the freemium model. This move has made it easier for the company to make huge profits and retain its competitive edge in the industry.
Why do freemium business strategies work well for virtual products and typically fail for physical products?
Freemium business models are known to work well for virtual products because of a number of reasons. The first one is that virtual products are marketed as services. Customers can use such virtual products without exhausting them. They are also technological in nature. This means that they can be purchased by many users or customers across the globe. The products can also be supported virtually, updated, or improved continuously.
The use of trial versions or limited functionality becomes possible for such apps. The model is usually inappropriate for physical products. This is true because tangible goods must be produced in large numbers if they are to be available to many people. Any attempt to give free products to different individuals can result in numerous losses. Additionally, many physical products do not require continuous support. The model can only be effective for goods that must be maintained, serviced, or supported. In conclusion, a freemium model for many physical products will be unsustainable.