Week 2 seminar MYSpace

3BM020 – week 2 seminar

Strategic concepts


Week 2 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 do 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