You are on page 1of 3

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 AOLs aggressive marketing produced great results Tremendous growth

AOLs 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 ISPs 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 Strategic Objectives Cost Strategies Differentiation Strategies Innovation Strategies

1. Easy to Use 2. Customer Svc 3. Mnge Growth 1. Reduce usage costs 2. Fee for service 1. Front-end Internet 2. Internal svcs 1. Bundle of Svcs 2.Cluttered screens

1. Improve Quality 2. Target Svces 3. Reduce Outage 1. Decrease infrastructure costs 2. Leverage Technology. 1. High Profile 2. Integrate new technologies 1. New products 2. Broker Svcs

1. Increase Svcs 2. Svc Quality 3. Reduce Overload 1. Switching Cost

New Entrants
1. Leverage Infrastructure 2. Internet only svc. 1. New Technology

2. Low cost Competitors

1. Usability 2. Simplified Technology 1. More Svcs 2. Slow to introduce new svcs

1. More Svcs 2. Technology Alliances 1. Product Alliances 2. Depth Services

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