INTERACTIVE CITY – COMPETITOR ANALYSIS

Group 4A7th of February 2011

Definition of Market – Social Online Shopping

Feature Interactive City

eBay Entropia Universe

Facebook Second Life

Social Network X X X X X

Applications for mobile/tablets

X X X X

3D Graphic X X X

Games X X X X

Real ShoppingX X

Virtual shopping X X X X

Mobile X X X

Business Model Percentage per transaction and DNA Store commission Advertising Affiliate Solution CPL and CPA

Profitability Negative – 9MSEK in 2009

Performance N/A as the product is yet to be launched

Business Model advertising listing and value fee merchant fees revenue sharing agreements contractual service fee and classified and lead referral fees.

Profitability Yes. Approx $6 billions in 2009.

Performance Very high. High number of users and retention rate

Sustainable competitive advantage

- 81 million active users

- Hard to reach to same level of trust.

Business Model revenue from advertisements facebook credits User DNA

Profitability Strong $1.86 billion in 2010

Performance Very strong. High numbers of active users (500 million active users)

Sustainable competitive advantage Hard to reach similar amount of users, the availability on all

platforms and trust for the brand.

Business Model Micropayments and premium accounts

Profitability Unknown profitability

Performance OK; declining number of user vs. growing

volume of purchases

Sustainable competitive advantage user base attracting other user and businesses

Business Model Planet partner (50/50 split of revenues), “real estate” –

transaction payment, Micro payment, own virtual currency PED

Profitability Negative Net Profit (Jan-June 2010) minus 13 MSEK

Performance Good with its unique business developing process 1.2 million users Size of virtual economy approx. 400 MUSD

Sustainable competitive advantage Technology and management Experience in 3D ( VW) industry. Controlling the “virtual economy”

Strategic Importance

Rela

tive

Str

ength

icR1

icR2

icR3

icC1icC2

icC3

eR1

eR2

eR3

eR4

eR5

eR6 eR7

eC2

eC1

euR4

euR5

euR2

euR3

euR1

euC1euC2

fR1

fR2

fR3

fR4

fR5

fR6

fC1

fC2fC3

sR1

sR2

sR3

sR4 sR

5

sR6 sC1

sC2

sC3

icR4

Resources and Capabilities of Interactive city and their competitors

VRIS Analysis of Interactive CityResource or

CapabilityValuable

Rare Inimitable

Substitutable

Competitive consequences

Platform Yes Yes No Yes/No Temporary

AffiliateYes No No No Competitive

parity

PartnersYes No No No Competitive

parity

VOIPYes Yes/

NoNo No Temporary

Innovativeness

Yes No Yes/No No Temporary

Integration of features

Yes Yes No No Temporary

International market coverage

Yes No No No Competitive parity

SWOT analysis of Interactive City

Strengths•Quality graphics•Multiplatform•Unique combination of user experiences•International market coverage•First mobile application•No virtual currency

Weaknesses•Unsustainable competitive advantages•Lack of financial resources•Unfinished product•No users•Tarnished company reputation•Limited support of mobile platforms•Legal regulations of international trade•Unknown brand

Opportunities•First mover advantage•Many potential affiliates•Many industries ready to enter virtual worlds•Rising popularity of smartphones•Large potential user base

Threats•Big, well established competitors•New entrants, “Copycats”•Lack of user interest•Smartphone application distributor restrictions

Conclusion Fast-moving highly competitive landscape IC You’s current competitive advantages are

unsustainable and you need to find new ways to compete for users hard earned attention

eBay and Facebook are potential threats to Interactive City in the near future

IC You need to finish the product immediately and start to attract partners and users

Key factor for success – attract more users than competitors and retain them by offering a better user experience

Bibliography

Collis, D.J. & Montgomery, C., “Competing on Resources”, HBR, 2008.

Ebay Annual Report 2009 http://investor.ebayinc.com/faq.cfm (2011-02-01)

Facebook Factsheet and statistics http://www.facebook.com/press/info.php?factsheet (2011-02-03)

How Sustainable is Facebook’s Competitive Advantage? Jan 7, 2011

http://webupon.com/social-networks/how-sustainable-is-facebooks-competitive-advantage/

Facebook Books $1.86B in Advertising; Muscles In on Google Turf January 17, 2011 (2011-02-01)

IC You Annual Report 2009 (2011-02-01)

IC You interview and lecture at SSE 31th of January 2011

Interactive City www.interactivecity.com (2011-02-01)

Mind Ark Financial Report (2011-02-03) http://www.mindark.com/press/financial-reports/documents/SemiAnnualReportJanJun2010_eng.pdfRe

MindArk lecture at SSE 31th of January 2011

Porter, M.E., "What is Strategy?", HBR, 1996

Resource and capability model - Grant 2008 - Robin Teigland Lecture 24th of January 2011

Second Life http://adage.com/digital/article?article_id=148236

http://blogs.secondlife.com/community/features/blog/2011/01/26/the-second-life-economy-in-q4-2010 (2011-02-01)

SWOT Analysis – Jobber. Principles and Practices of Marketing. 5th Edition. 2007. McGraw Hill. P.47-49

VRIS - Model Hitt, Ireland, & Hoskisson 2006 - Robin Teigland Lecture 24th of January 2011

Youtube clip Interactive City Demo http://www.youtube.com/watch?v=_p7uxIX3Zfo (2011-02-05)