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INTERNATIONAL SCHOOL OF MANAGEMENT

MBA PROGRAM – FINAL PAPER

E-COMMERCE – SKYPE IN MEXICO

PRESENTED TO: ROHINI RAO-BOCHATON
PRESENTED BY: DIEGO PARDO

APRIL 2010 – PARIS

TABLE OF CONTENTS

1. INTRODUCTION
2. SKYPE BACKGROUND AND PROFILE
3. TARGET MARKET INFORMATION – MEXICO
4. COMPETITIVE SCENARIO
5. SWOT ANALYSIS
6. POSSIBLE PARTNERSHIPS
7. MARKETENTRY STRATEGIES AND MARKET SEGMENTS
8. SUBSCRIBER PLAN AND REVENUE NUMBERS
9. CONSLUSIONS
10. REFERENCES

1. INTRODUCTION

One of the most disruptive innovations that has arrived in the last decade is Skype. It brings a new business model into the market where high costs to make domestic and long distance calls have had the users looking for new viable and low cost options. Itdefinitely gives value innovation with differentiation and low costs at the same time. I have chosen Mexico (for personal reasons and I know the market because I lived there for four years) to be the entry market in this final paper. Applying the issues and information seen in class will give structure to the analysis of the entry strategy to this wonderful technology and business model. It won´t beeasy because of the strong competitive players in the market, but the final strategy will determine the results of success or failure.

2. SKYPE BACKGROUND AND PROFILE

Niklas Zennström and Janus Friis were the founders of Kazaa, a software that would let you download files (music) from the Web in a peer to peer mode. Right after the music labels battled Napster into court, Kazaa gottremendous growth of users in the UK and all over the world. But it wasn´t very long before the music labels went after this two entrepreneurs. They had to sell the company but then started thinking their new business. They ask themselves if they could transfer music through the web, they had to do the same with voice calls. They got to work and in 2003 they founded Skype. They were able to connectpeople for free through the Web. Venture Capitalists went crazy and soon they had enough resources to start up. They started getting very interesting growth numbers and they were legal (the most important thing!).
The online communication tool enabled users to do instant messaging, calls (voice over Internet Protocol – VoIP), video conferences among other services. By 2005, the business was growingpretty good, that some big players started to look around. Google and e-Bay where among the first ones, being e-Bay the chosen one to buy the company from Luxemburg for over 2.6 billion dollars. E-Bay said that they buying this disruptive technology they would add value to their actual customers in the C2C (consumer to consumer) transactions held every day. Imagine a girl from Miami that isselling her bicycle to another one in Minnesota, but they can actually do a video conference for free! That was added value to their customers. Besides, the company has all the best projections to be in the first places of telecoms on the world.
These are some facts and statistics about Skype (Skype Organization 2008):
* Revenues of $550 million dollars and 26% growth in 2008.
* 405 millionusers worldwide by 2008 (an increase of 47%)
* 100 billion minutes worth free Skype to Skype calls from those 405 million users.
* Skype software is extremely secure, sustainable, and scalable. At peak times, there are over 15 million concurrent users and over 300,000 simultaneous calls. There are more than 100,000 information queries on the network each second.
* Skype accounted for 8%of the world's international calling minutes in 2008.
* It is available in 28 languages.
* 30% use Skype for business purposes.
* 25% of calls use the video application.
* 1 billion copies of the software has been downloaded.
* Skype adapts bandwidth usage to guarantee best audio and video possible.
* They offer Skype around 50 mobile phones around the world.

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