Strategic Management
3rd Edition
ISBN: 9781259420474
Author: Frank T. Rothaermel The Nancy and Russell McDonough Chair; Professor of Strategy and Sloan Industry Studies Fellow
Publisher: McGraw-Hill Education
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Chapter 1.4, Problem 1CC
Summary Introduction
Case summary:
The case explains whether Company T have a strategy. When compared to the stock price of Company T in 2013, it has been reduced by 50 percent in 2015. Hence, Person DC was removed from the post of CEO due to the disappointing performance. Person JD, who was a co-founder of Company T, returned to Company T as new CEO.
The ultimate goal of Company T is to increase the user base. Thus, they can be able to increase their revenue. They can charge advertisers for promoting their goods and services. The charge is based on the user base. Advertisements for individuals are based on the location, time, and user’s interest. The monthly users of Company T are 300 million and the monthly users of Company F are 1.5 billion.
To determine: Why Company T is struggling.
Expert Solution & Answer
Explanation of Solution
Determine why Company T is struggling:
According to Person X, Company T is not adapting to the changes and the trends. The advertisements overkill the experience of the users. The growth of mobile usage of their sites would negatively impact the social media sites and their revenue on advertisements. However, Company F is more successful when compared to Company T in handling the ad revenue and increasing the user base.
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