3BM020 – week seminar Strategic concepts Week seminar: MySpace General observations of the case: News corporation appears to following the stance of Chandler in its deliberate definition of its long-run goals and objective (‘a leading and profitable internet presence’) and its actions to carry these out (the acquisition and subsequent investment in the technology platform) The positioning of MySpace is distinct from Facebook and reflects Porter in its concern for uniqueness On the other hand, the entrepreneurial spirit of the founders, being reluctant to prioritise and trying many initiatives, is reflective of Mintzberg, allowing the dominant strategic direction to ‘emerge’ from what turns out to work General observations of the case: Conflict of focus is apparent in that the founders seem more interested in launching a new film studio, their new owners, News Corporation, are more focussed on the more short term target of for increasing advertising revenues Arguably, MySpace is concerned with businesslevel strategy, specifically in how to compete against Facebook News Corporation’s issues however are more focussed on Corporate level strategy: how to manage the whole portfolio of different businesses, including MySpace Question 1: Consider the business level strategy issues: The competition from Facebook at the time of the case scenario and in the future – (no doubt you all use Facebook now) what are your views and opinions on this? Think about value in terms of the potential to earn profit, not just in terms of what you like to use as consumers We will explore this later in the lecture series by linking into the VRIN/VRIO framework (Value, Rarity, Inimitability, Non substitutable) Question 2: This question is related more to the corporate level strategy, especially the implementation issues Some of you may support the entrepreneurial spirit and free-wheeling approach to strategy of the MySpace founders – emergent strategy Others may support the Chandlerian approach of News Corporation definitive approach to strategy formulation – prescriptive/planned/ deliberate approach Which approaches you think were sensible or required, and which were less so? Note: Alan Van Natta was fired by News Corporation in February 2010, less than a year after his arrival By this point Facebook had four times as many users as MySpace The rest, as they say, is history….look at Facebook now and look at MySpace now January 2015 Facebook reports fourth quarter profit of $701m (£462m), a 34% increase on the same period of 2014 Total profits for the year were $2.9bn, almost double the total from 2013 Advertising revenue grew by 53% to $3.59bn, approximately 70% coming from mobile ad sales The amount of profit made on each dollar of revenue decreased from 44% to 29% from a year earlier, as the social network invested more heavily in marketing and research and development Facebook users approximately 1.39 billion active users each month Source of data: bbc.co.uk/news/business, 28 th January 2015 ... January 20 15 Facebook reports fourth quarter profit of $701m (£462m), a 34% increase on the same period of 20 14 Total profits for the year were $2. 9bn, almost double the total from 20 13 Advertising... February 20 10, less than a year after his arrival By this point Facebook had four times as many users as MySpace The rest, as they say, is history….look at Facebook now and look at MySpace now.. .Week seminar: MySpace General observations of the case: News corporation appears to following the stance