INPUT DIAGNOSIS – SKYPE
Input diagnosis of companies is vital as it helps in assessment of the company structures, operations and culture in order to find out if the company ranks well in the market. Through this diagnosis, the strengths and weaknesses of an organization are realized, and this enables for the correct steps to be taken in strengthening the company more. The factors that limit the company’s effectiveness are also studied in order to ensure these are worked on for a higher productivity. Therefore, an input diagnosis allows for changes to be made in an organization in order to maximize the company strengths for better performance.
Input of an organization includes machinery, people, capital, and ideas that a company employs in order to achieve its objectives and goals. All these are affected by the external environment, resources and company history. Customers, human resources as well as economy make up the external environment. Different models can be used to perform input diagnosis for companies. Nadler and Tushman argue that a company’s objectives, goals and structures must conform to all its other components. For instance, the employees of a company must have the relevant skills and knowledge to perform company tasks (Nadler & Tushman, 1980).
Skype is a company that is computer-oriented and internet-based. It allows people to make voice calls for free over the internet. It was launched in 2003 and by early 2009, had acquired close to 443 million users. The main objective of Skype is to make internet phone calls a primary medium of communication for people. Skype offers free internet calls, video chat, file sharing and instant messaging services. This company has extended its services to be offered on mobile phones also.
In its early years, Skype did not face great competition in the market. It was among the first internet communication companies and its cost effective strategy got it a lot of users. However, in recent years, similar companies such as Yahoo, Vbuzzer, and Google among others have come up rapidly to compete with Skype. Yahoo is the main competitor of Skype. Jajah, another telecoms industry was established in 2005 and it was considered a possible replacement of Skype. However, it is more expensive than Skype but its services do not require a PC or downloaded applications.
In Porter’s Generic Competitive Strategies, a company’s profitability is determined by its current position in the industry. For any company to have above average productivity, it must have a competitive advantage. This competitive advantage depends on cost leadership, focus, and differentiation. In the case of Skype, it has tried to achieve its strategies through different ways (Porter, 2007).
On cost leadership, Skype has set out a cost effective strategy. Its rates are very low and affordable. This has given it an edge over the other companies in the telecommunication industry. This also includes the technology employed by Skype. On differentiation strategy, a firm must remain unique in order to retain more customers. A company chooses an aspect that is deemed important by its buyers. It then serves these needs of its buyers in a unique way. On focus strategy; a company chooses a narrow scope of competition in the market by seeking a cost advantage over its competitors.
Porter’s competitive advantage requires that a company competes favorably and sustainably. Skype’s core competence is its calling costs. With the increase in IT, most companies have adopted internet use. Skype’s internet communication therefore has won it many customers. A company’s strategies will enable it to attain above average profitability or not. The costs of operation must be low, quality of services should be high and speed of service delivery must be high too. Skype has tried to put all these into consideration (Porter, 2007).
Skype’s inputs are congruent with its strategies. The kind of leadership that is adopted by Skype is high caliber. Skype has immensely invested in its leadership unlike other telecommunication companies who cut down costs in the leadership sphere. The appointment of some renowned skilled leaders to join Skype in 2009 was a way of ensuring that the technological standards as well as Skype’s strategies are achieved. Global research and team development are some of the strategies that Skype needed to enforce through high leadership. Its vision is to drive forward a technological innovation and creation of a world-class leadership team. Skype’s leadership team makes it at a better position to develop rapid growth and embrace new opportunities as they come.
Another one of Skype’s strategies is delivering of quality services to its users. In order for this to be achieved, Skype drifted from the previously used private VoIP system to a more business friendly service. In an interview, Stephan Oberg of Skype had revealed that Skype had come up with a new strategy that focuses on business where cheap calls would be made via a texting PBX switching machine. This therefore attracted new customers from the business circles unlike the previous personal users. This strategy attracted a good 10,000 companies
The upgrade of Skype’s technological functionality as observed by wireless news article of 2008 also serves to attract more users as its accessibility has been made easier. Mobile support and an additional messaging service to users is a sure way of retaining them and attracting more.
Another strategy of Skype is to integrate basic communication with entertainment. This is a differential strategy approach as Skype realizes that people today value entertainment. This has been done in collaboration with Microsoft. Exclusive content involving artists and celebrities who subscribe to Skype is availed to other users. This is a marketing strategy that has proved to be successful and is promoted on other social media platforms such as Facebook and Twitter. It has attracted more than 200 million new users every month.
According in an article in Marketing Week, 2012, partnering with other brands such as Samsung, LG, Facebook, Panasonic and Verizon is a way that Skype has used to reach out to more people. Skype maintains good relationship with its partners and shares with them constructive business and marketing ideas. Being a quality and affordable brand, Skype is expected to outshine in the industry.
In conclusion, input diagnosis is vital for every company as it helps in problem detection. This way, companies have a chance of improving their productivity and profitability. The company strategies should be congruent with its inputs in order for success to be realized. Companies today should therefore take the initiative of performing input diagnosis in order to realize their position in the industry.
Interview: Stefan oberg of skype. (2009). Global Telecoms Business, , n/a. Retrieved from
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Skype to call on celebrity fans as it shifts focus on content. (2012). Marketing Week, , 5-n/a.
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Skype previews mobile strategy at 2008 international CES. (2008). Wireless News, , 1-n/a.
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