dropbox case assignment

8/10/2019 Dropbox Case Assignment

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ASSIGNMENT

Q1) Imagine at the time Drop box was launched Google decided to target the

opportunity that Houston has identified, what should be the response of the

Drop Box?

Ans1) To some extent this problem was envisaged by Houston as indicated in the case

and accordingly he wants to move in quickly to capture a large customer base at

the earliest possible. Google is a giant company with advantages of strong

financial position, large market presence over a long time, a established brand

name and a diverse products with large customer base besides other advantages

like established infrastructure, other R&D centre with specialist and a robust

management team including marketing etc. Infact the possibility of Google

giving away a terabyte to 100 million machines, Google/MS/Yahoo being

possible companies most likely to buy it and Google might finally unleash

GDrive and steal a lot of Dropboxs thunder is not ruled out by Houston. It is in

this context and the also the differentiating characterstic which Drop box has the

options are to be explored.

Accordingly there may be three options:

1)That Houston may not take on direct competition with Google and avoid being

crushed like Netscape by Microsoft. In this case it may sell the technology to

Google for a hefty price based on the unique differentiation the product has

over the existing competitor and consequently move into some other area of

computer programming or software/ new apps development i.e a new

innovative product development where there are no competitors. In factHouston spells this that he shall have hard time turning down $1 million

after tax for months work.By this way it shall avoid the direct competition

with a large giant with which it is difficult to compete (since Google may

provide a larger storage space at a lesser cost with similar features by using

its available strengths and networks). SWOT Analysis/ Porters 5 forces

analysis show that In such a case the business proposition shall not be

attractive as it does not have capital requirement to match marketing and

brand building, build economy of scale in a field which is already crowded

with competitors with similar products and the features of differentiation may

get copied and lesser access to distribution channels. Further since as per thequestion Google targets this opportunity Drop box does not have much

chance to build up until it makes a First mover advantage.Incase Google

does not be interested with purchasing options of other major software firms

e.g Microsoft etc or PC manufacturing firms (instead of PC security software

providers as he did) can also be explored.


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1) Earliest launch of the product to gain first movers advantage. Take

advantage of the complacency (as it appears in Google) and past efforts

around cloud storage failing for internal political reason, project has been a

black sheep since 2005 and the grandeur of their vision , trying to move

everything to the web, Google is not solving the problems that real people

have today. This weakness /shortsightness of a large firm, its failing to read

the customers mind and their preferences and their needs has been wellidentified by Dropbox which it is trying to encash.

2) Besides the already product differentiation made from the storage/back up

solutions provided by other firms, it may also focus on features like file

versioning, permission /access control, encrypted storage, mobile version,

forum/chat etc so that the features which are offered by other competitors

(Ref Exhibit 1) are also available in this application so that their customers

move to Dropbox considering the differentiating features which dropbox

offers besides the other features which others also offers leading to faster

shifting and expansion of customer base from other competitors.

3) Continuous study the market and reach out for merger and acquisition of

other smaller competitor firms so that it becomes a bigger and stronger

entity.

4) Tie up with PC manufacturers to provide the software as part of bundled

software (helps to reduce distribution cost and reach out to large customer

base and enhance popularity of the application).

5) Investment has to be made in building team of marketing, production etc.

6) Keeping the model simple, integrated and addressing the gap /customer need

with ease and convenience is the key.

7) It may also go for patenting of the product.

Q 2) Should Houston create a separate version of small and medium

business customer ? Give your reason for the option you suggest ?

Ans 2) Yes Houston should create a separate version of small and

medium business customer after some time, say after 1 year after first

launching the current developed application which is simple integrated. The

reason for the same is as under:

The current Success factor of Dropbox is that it Offers a simple, ease of useand single product version currently provide a competitive advantage.However we must understand that the product is not a highly innovative oneand can be developed /copied by other competetors and the industry is ahighly competitive industry. The purpose of all these firms is to provide astorage solution. It is the method, ease, suitability and applicability for the to

individual user/ business segments and mode of delivery and costing etcwhich shall decide which form shall remain ahead of the others in the long


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run i.e the usage applicability, relevance and delivery and cost shall be thedifferentiating factors in the long run.

In order to decide whether Dropbox should create a separate version ofsmall and medium business customer we have to consider factors likewhether an attractive market exists, whether there is customer demand forthe product, how the strategy of the company has to be changed to addressthis issues, financial issues, whether it may not cannabalize the existingproduct, existing competition in this space, whether it will lead to economy ofscale and profit and whether it is essential for future survival and growth and

maintain competitive advantage and edge.

In order to remain ahead of other it has to create productdifferentiation in terms of feature and service and build economy of scalessince the market is fiercely competitive and their is declining costs for storageand bandwidth bolstered industry growth and competition over the years.Further as per the (Exhibit 7 ) Dropbox ranked 6thin the customer segment

but it was not mentioned even in the top 25 provider in the either the smallmedium business or enterprise segment. It is pertinent to mention that this isone of the revenue giving segment for the firms since for them data storage isimportant from business point of view. Carbonite is aggressively focussing onthis segment and Drop box shall have to create a segment for the smallmedium business customers if in case it wants to challenge the existingcompetitors in the long run and stay ahead. Certainly an attractive market isavailable.

It is clear from the case that the market is growing fastly and their is

increasing global market for data synchronization and backup services.Dropbox's market dominance might fade away one day if it does not

constantly improve and upgrade its functions while its competitors does. Thesmall business entreprises (SME), as well as Multi National Corporations(MNC) are huge markets for dropbox to venture into.

Dropbox will have to position itself as a product catering to the different

needs and functionalities required by these organizations(product

segmentation) to increase its chances of breaking into this lucrative market.Further it has to identify the specific requirement of this segments which areunfulfilled by the existing service providers and come up with innovativesolutions. Capturing this market would need to alter its marketing strategy abit and may require higher financial investment for which planning is to bemade carefully. Innovative practices which reduce cost on other front likeDrop box relied on a cloud services partner like Amazon S3 unlike Carbonite

stored customers file on its own servers. It will also help to build spirit to


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challenge itself and go for more innovative products /creativity and findingbetter management methods which is essential in this particular productcategory rather than remaining stuck up with an existing developed simplisticproduct.

dropbox case assignment

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