BAV_Case2 - QUESTION 1 AOL was having very few competitors...

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Unformatted text preview: QUESTION 1 AOL was having very few competitors (only 2 major rivals),So degree of competition among existing firms was less. Ø Prior to 1995 the threat from new entrants was not that Ø Because of large base of customers and very few rivals the content providers (i.e. merchandisers ) were not having any bargaining power and AOL was able to make them work on there terms. Ø AOL were investing heavily in customer acquit ion and retention programs like marketing etc. Ø AOL made alliances with many other firms e.g. apple etc that provided them a continuous stream of revenue. Ø They maintained cost leadership by having a very simple and low price structure which customer was able to understand as compared to its competitors. Ø Had strategic partnership with many firms like American express etc which allowed it to grow its membership base and uniquely positioned it in the industry. Ø QUESTION 2 Key Changes Ø New entrants : Microsoft Network ,World wide web Content providers now had alternate distribution channels. Ø New entrants were Affect on AOL Ø AOL customers base would decline in future as other new alternatives were much more cheaper and lucrative options. Ø The intermediaries will start ...
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BAV_Case2 - QUESTION 1 AOL was having very few competitors...

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