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Small Business Management

Small Business Management


Critical Assessment of Skype's Business Model

Every business model, be it at a start-up level or at an established level can be judged via the following factors;

Customer segments: It stands for who uses a company's product and the target market it is directed towards. Skype initiated by targeting itself towards entrepreneurs and travelers.

Value Proposition: It can be defined as the bundles of products or/and services that a company provides to its customer in order to satisfy and eventually build customer loyalty. It provided free calls of reasonable quality and with the facility of conference call aided with video calls. It also had calls made to phones at a cheaper rate.

Distribution Channels: It can be termed as the channels/modes that a company utilizes to deliver values. The sole distribution channel is the World Wide Web that is via automated web-relationship which has a set-up to download for the software to become usable.

Customer Relationships: Aids in having instant peer to peer connection free of cost. It also works as an ancillary product which aids not just the consumer but also other entities as well such as the organizations, institutions as well as industries.

Revenue System: The ancillary product line of Skype called “Skype Out” and its “Ancillary Products” however most calls of Skype is free.

Key Activity: The key activities of Skype are software development and the complaint management which adds value to Skype's brand equity.

Key Partnership: The key partners associated with Skype are Telco's, Payment Provider as well as Logitech.

Key Resources: Telco's itself has invested billion dollars in Skype but Skype's Key Resources are its developers as well as its Software.

Cost Structure: Once the business structure is developed and understood then it becomes easier to understand the cost structure of the company. Skype being software-based company its costs ...
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