Aol presentation
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Presentation by Monique Singh illustrating and delving into the transitions AOL had to take in order to stay relevant in the Internet universe as new technologies and the economy changed.
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Aol presentation
- 3. The Environment: PEST Analysis Political Low Regulation Monopolies Public Access Content Responsibility Economic Recession and purchases of computers Providers and consumers spending less Sociological Foreign Technology acceptance Geography Demographics Technological Constant innovation Reliance on technology
- 4. The Industry: SWOT Analysis STRENGTHS: Experience Brand name Experienced employees WEAKNESSES: Local Content Employee training Limited expansion OPPORTUNITIES: Evaluation of operations Web Application Satellite locations, delivery, relocation THREATS:
- 5. Porter’s Five Forces Model Rivalry Among Existing Internet Service Providers: High Suppliers: relatively high Substitutes: High Buyers: High Threat of Entry: Low
- 6. Key Success Factors in the Industry Source: Strategic Management Theory, Charles W.L. Hill 2007) Resources Distinctive Competencies Capabilities Functional Strategies Differentiatio n Low Cost Value Creation Profitability
- 7. The Environment: Affect on ISPs Industry: Growth of substitutes Market/Technology: Creation of high-speed connection Economy: Dot.com bubble Legal: Monopolies Overall Threats and Opportunities: Companies knowing if they are profitable given their cost or quality
- 8. The Organization: AOL Objectives: creating a sustainable model for the ISP business Strengths: Customer brand awareness Weakness & Constraints: Lack on innovation, Source of revenue Company Orientation: Sales oriented Company Culture: You first. We insist.
- 9. The Problem #1 Merger with Time Warner No foreseen growth at the time Lack of synergy Change in initial strategy Completely different cultures
- 10. SWOT: Merger Strengths AOL’s brand recongnition 30 million customer base Time Warner’s experience with media and their existing content Weaknesses Culture Clash Lack of Synergy Lack of strategy execution Opportunities Time Warner’s content being available to only AOL users Internet usage innovation Threats Phone companies Dot com bubble burst Competition on content
- 11. The Problem: Consumer Perception 2009 AOL announced their departure from Time Warner High speed internet New brand identity Left the world of just access and ventured into focusing on content and advertising Bought Huffington Post Collaboration with TOMS shoes and emphasis on helping consumers find a cause to donate to and run an Employee Cause Contest
- 12. AOL Now
- 13. Marketing Strategy Mission Statement: To Inform, Entertain and Connect the world
- 14. Marketing Strategy Products: Global and local content, paid subscriptions, advertising, consumer applications, AOL Ventures Target Market: niches Global Diversity: AOL Dublin
- 16. Future of AOL We're here to hold the Internet to its promise, to deliver the best it has to offer, and to bring us all closer to the things that matter. We do it by helping people discover and share the stories that color their lives; By pursuing innovations that make things easier, more effective and just plain fun; And by bringing to light the many simple ways we can all help make our world just a little better.
Editor's Notes
- Political: regulators only generally step in when large companies use their networks to charge people certain prices that can oust smaller companies from the market and create monopolies. Lack of small businesses also limit rural users from using anything but a long distant network, which is too expensive. ISPs are also allowed to have their services available in public schools and libraries, they should allow some restrictions so people can have the options of having certain content not reaching certain demographics Economic: People spending less, use computers in libraries or schools rather than buying their own. Consumers want to spend less on the internet service providers and look for the cheapest price, even if its not the fastest Sociological: Difficult to infiltrate the foreign market, because other countries, such as Japan and France tend to avoid inventions that are not their own, or just appreciate their own inventions more than other countries’ because it helps their economy when they support their own services. Only scientists and scholars used to use the internet, and now virtually anyone anywhere can, so demographics and geography do not play as big a role as the past. Technological: technologies are constantly improving and society’s reliance on these technologies promote the need for innovation
- Strengths: Most companies in the industry know all about the schematics that go behind developing a company and know what it takes to make customers have the services they expect. Having a name that sticks out to customer and a trustworthy brand gives them a
- Substitutes: high because switching costs are low and customers are price sensitive and things such as broadband and faster technologies can threaten other services Buyers: High, they are price sensitive and can switch whenever they want Barriers to entry: low for existing firms because they already have a customer base and infrastructure in place. AS long as the firms offer a good and affordable service, it is hard to differentiate your product when you offer the same services as the rivals. Suppliers: ISPs must use existing networks because it is difficult for every ISP to build their own entire network. Suppliers are the backbone of the internet and control routing and switching traffic.
- In order to gain profitability, ISPs must create value in a way that attracts customers such as a low cost, high quality approach, or just having good customer service.
- Creation of broadband connection: constant internet technology change Dot com bubble: The collapse of the dot com bubble left many companies bankrupt and regretful of business transactions or Mergers Threats and Opps: A large company will buy an internet for speed, some homes may just buy for price.
- Strengths: You’ve got mail Weakness: They stayed with dial-up software when they watched Comcast and Verizon come into the game with faster services. Also, 70 % their revenue came from monthly fees Company orientation: Transitioned to a market oriented company with the merger of Time Warner as they eventually focused on customer’s wants and needs rather than sales. Company Culture: boasts to put employees first because empowered people make smarter decisions. Also promotes employees doing good deeds for their local community, but their seems to be no large emphasis on CSR
- Known as one of the worst business mergers of all time, merged in 2000 Both companies jumped into a merger in order to connect media and the internet, however, AOL was not seeing much profibility at the time due to high speed internet being introduced. AOL lost 4 million members between 2002-2005 Lack of synergy: Those at the top were not pushing the employees in their own brand to work with the other company in generating new ideas, and the environment became and us vs them Also, most of AOL’s executive stayed at the top and without strong editors to deliver the content, AOL found themselves ill-prepared to step into such a business. Lack of focus: the merge initially occurred in order to connect AOL’s large subscriber base with Time Warner’s content, however Time Warner was reluctant in allowing their content to stream over the internet, even with a fee. Completely different cultures: Just a few examples: AOL was centrally managed while time warner was decentralized and there was autonomy at the division level; people who worked at AOL were in the mid 20s to early 30s, while time warner had employed mainly older mature men; Lastly, AOL was focused on their stock price, while Time Warner was focuesd on growing their business.
- *Opportunities: Internet usage innovation: using the internet to connect to AOL and then use their rich multimedia content, download music and movies, social media usage *Threats: Local phone companies having first mover advantage with their new high speed access Tech bubble burst and companies must spend less on advertising Site such as google and yahoo offering the same content eventually
- Basically, no one really cares about AOL after the other companies came out with broadband, and they have to figure out ways to reinvent themselves. The emergence of high speed internet threatened the future of AOL and they Needed a new branding strategy, AOL seemed like an ancient ISP to many Bought huffington post for $315 million in 2011 and are not partners As part of the transaction, Arianna Huffington, The Huffington Post's co-founder and editor-in-chief, will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content AOL now has Global reach and very recently, the Huffngton Post just recently won a Pulitzer Prize. Employee Cause Contest: AOL employees write about which no profits they are passionate about and have 3 winners in which they donate to
- Inform: their acquisition of Huffington Post definitely allows them to inform users with information reported by Pulitzer Prize winning writers Entertain: they have news stories, celebrity gossip, health advice, and even their own music channel on their home page alone. Connect: AIM, AOL Lifestream and AOL Mail Transitioned from an ISP to a “web service company” more focused on content and advertisements, but still has a subscription based access service to the internet
- Global and local content: Huffington Post, Moviefone, Engadget, TechCrunch, Patch, Stylelist, Mapquest. The paid subscriptions boast a VIP experience and high quality member support. They aim to provide advertisers with premium content to reach the consumer Consumer applications such as blogging AOL Ventures invest capitol in early stage businesses and can give them checks ranging from $50,000 to $3 million. It is obvious that they have many products and services, AOL targets a certain niche with certain services. They bring in bloggers, gamers, people who love celeb gossip, etc. and it seems to be working well so far. Global Diversity: a development team in Dublin is rolling out new AOL homepages for the worldwide audience.
- They do not charge users for their online services such as email, aim, content. Their highest prices internet plan is 14.95 per month They also have a broad range of services
- And I think they’re on their way to accomplishing their mission as long as they stay focused, and always think one step ahead of their new competitors such as Yahoo and Google, and make smart business decisions such as the acquisition of Huffington Post I think its wise that they have transitioned their focus from not just and ISP, but also content and advertising