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MGIS 130: What makes an Application Successful? Business Strategy

Internal Code: MAS7007

Business Strategy

“What makes an application successful?” is a multimillion-dollar question. If you can develop and deploy a successful application, you can make millions—every single day. Is it luck that creates that app millions of people download, like Flappy Birds, or is it a genuine business strategy that can be implemented by anyone? With the millions of applications already in the app store and hundreds being added each day, what are the chances you can find that sweet spot for success? If you are lucky enough to create an app that jumps to the top ten list, you can open your doors, sit back, and watch the money flow in. This is exactly what happened to Candy Crush—the highly successful puzzle game that matches fun with pain. Candy Crush offers a range of 3-D sweets that players must eliminate by matching colored candies to crush them, thus advancing to the next level. Candy Crush brilliantly combines Bejeweled, Candy Land, and Tetris into one game. Each player receives five lives and, once completed, must wait 30 minutes to play again, which can be the longest 30 minutes of your life if you are on level 99. Candy Crush held the coveted position of the number one downloaded app for more than nine months and is one of the highest grossing U.S. applications. The company responsible for the Candy Crush craze is Sweden’s King.com, and it boasts making between $1 million and $3 million daily on its applications is the latest among European technology firms entering the international gaming scene similar to Mojang’s Minecraft and Rovio’s Angry Birds. What sets King.com apart is its unbelievable profitability in an industry plagued with failed companies. King.com is truly an icon for others seeking to match its success. Perhaps if you study the secret to King.com’s sweet success, you can be the next star of Apple’s App Store.

Here’s the secret to King’s success: freemium. Anyone competing in business today must understand this term. A freemium game is free to download and play and then charges customers for extras. King.com takes advantage of freemium and is making millions as it purposely creates pain points in the game, which users can pay extra for as a way out. For a meager .99 cents, users can purchase a lollipop hammer that thrashes unruly jujubes. Just imagine you have been beaten at level 49 and for just .99 cents, you can regain five lives and continue playing. Or you can buy a lollipop hammer and literally beat your way to the next level.

Many business applications operate using the freemium model, giving customers a functional but limited time to use their applications for free. For example, you can download Microsoft Office for a free trial version and in 90 days purchase the fully functional version for $499. It is important to note that the freemium business strategy does not work with physical products that cost money to produce; the closest you will see in freemium is free shipping. In business, the something-for-nothing feeling resonates with customers. Grocery stores often use the BOGO concept: buy one get one. Instead of simply offering a 50 percent discount on all products purchased, customers tend to buy more when they think they are getting one product for free. The bottom line for the company remains the same regardless if it offers each product at a 50 percent discount or two products for the price of one.

Questions:

1. Do you agree or disagree that freemium business strategies can provide a company with a competitive advantage? Be sure to justify your answer.

2. Analyze LinksSaver, using Porter’s Five Forces.

3. According to Porter’s three generic strategies, where does LinksSaver reside?

4. Describe the difference between transactional and analytical information and determine which types LinksSaver can provide for a group of users in a project.

5. Illustrate the business process model used by a user of LinksSaver.

6. Formulate different metrics LinksSaver can use to measure the success of a user’s experience.

7. Argue for or against the following statement: LinksSaver invades consumer privacy by taking data from the user and allowing it to be shared in an archive with others.

8. Argue for or against the following statement: LinksSaver copyright by taking data from the user and allowing it to be shared in an archive with others.

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