EBay Calling Skype: Is It a Good Connection - Essay Example

? Strategic marketing Contents PESTEL Analysis 3 Political Factors 3 Economical Factors 4 Social Factors 5 Technological Factors 5 Environmental Factors 6 Legal Factors 7 Reference 8 PESTEL Analysis PESTEL Analysis tends to cover the macro environment which is external driven and hence the organization thus has no or little control over the macro environment factors. The influences usually have a direct impact in the strategies used by the organization and it is very much essential for an organization to analyze its macro environment. Skype business is also influenced by the external environment and thus PESTEL analysis is performed to take care of the external factors which have high influence on the business. 1 Skype is the market leader in the international voice over internet protocol (VoIP) telephone market. The software used by Skype allows the customers to use the internet in order to make free calls to other Skype users globally. In the process of doing business along with the internal factors, the external factors, the external environment also have the potential to enhance or subdue the performance of the business. The extent to which the political, economical, social, technological, environmental and legal factors affected the business of Skype has increased generate public awareness and acquisition by eBay. 2 Political Factors Skype defined as VoIP has an international outlook as it’s used by numerous people all over the world. So the political conditions are essential for the success of the Skype. Skype allows people to make free calls over the internet which has a direct advantage to the small business. But Skype has been suffering from many political issues over the years. The governments of some emerging countries have tried to block Skype mainly because the telecom industry started to lose money due to lucrative international calls. China telecom has planned to block the access to Skype as Skype has been accused of security issues. Apart from the countries blocking Skype, based on its technology, assuming that no disruptive technology enter and challenges Skype, variations from different country tends to become less significant. With liberal regulations Skype has the opportunity to extend to developed countries and its presence along with eBay has a great potential for earning revenues and increase profits. In the emerging countries Skype has been facing difficulties but the company has the ability to capitalize in a positive manner along with eBay. Countries such as China where the political factors are often co related with the social and cultural issues, the possibility of Skype is less optimistic. The Middle Eastern Countries have also denied the use of Skype in their communication process and it can be said that the implication of the company are not favorable.3 Economical Factors The internet along with the digital civilization has brought about dramatic changes in the economic system as well s in the social structure caused mainly due to communications technologies. The economic condition which governs Skype reveals that a very minimal amount of risk is associated with Skype in the efficient running of its business. The business model of Skype peer to peer model is combined with the ability to leverage the resources of eBay in a cost effective manner in order to ensure competitiveness in pricing strategies.4 Skype is cost effective as it offers free online calls over the internet to people across the globe. Its low cost strategy has led to an increase in the perceived value since the savings associated to individuals are high and significant in the long run. According to sources, Skype has been regarded as one of the fastest business which has fueled the growth rate for eBay. Skype has currently added about 150000 users per day for its 54million members in about 225 countries. Skype has generated revenue of about $7million in 2004 and achieved $200million in 2006. With Skype’s international existence, and popularity it would eventually help eBay with its international presence and expansion.5 Skype with its low cost advantage has emerged as one of the successful VoIP operating into various different countries and satisfying the needs of the consumers and as a result they are able to spend more on other factors which would indirectly boost the economy of the country. Social Factors Communications is a social need and Skype has been one of the internet devices which have revolutionized the whole communication industry. Skype allows free calls over the internet which has helped the consumers to interact with its near ones more easily and almost at a free rate. The low cost factor is the biggest advantage for Skype is their service which is being offered by it that also at a minimal rate and has resulted in social engaging. Thus Skype has marked its presence among the consumers and is expected to grow in the near future. Technological Factors Technological factors play a vital role in the success of the IT industry and especially when it is like Skype, which allows VoIP over the internet. Skype with its innovation has given internet telephony has provided more freedom the way Skype implements its services which are being offered. As the new technology has riled out the old technology there arise many new opportunities which helps to exploit the new and ongoing technology which are required to fulfill the needs of the users all over the world. Skype hence do not disclose about its technology and as a result the company has not ye released any public documents about the technical factors. Skype tends to own only the login server. However the voice quality of Skype is better than other invoice technologies. The configuration of network is made automatic which means that the user on Skype only has to login with their credentials and as the login formalities is complete the users are able to use it. Internally Skype make uses of the application “Simple Traversal of Users Datagram Protocol”. One of the events of Skype was the launch of “open application program interface (API)” which has enabled the third party to develop its own add on facility for Skype. Skype along with is creative users and API had made a new ways through which services offered by Skype can be used. For example Skype’s radio stations are some of the examples of services offered. But however, a major disadvantage in the service of Skype was that the technology did not provide the phone numbers for its users. As a result the users of Skype were not reachable with the normal phones. But Skype to over its drawback has planned to come up with new technology of Skype In where the users of the Skype would get a number which can be easily used by the users like any other phone number.6 Environmental Factors As such the VoIP do not have any adverse impact upon the environment but if seen in dept from Skype’s point of view affecting the business, Skype security can give rise to environmental issues and it is because of the security issues that China and other countries have almost banned Skype from operating into its countries. However Skype has been working on its security issues and believes that the voice calls on Skype is secured and will not affect the communication process mainly when the users use only standard software of Skype. Therefore communication through Skype to Skype software has always been secure and will continue to remain the same. Legal Factors EBay which is the current owner of Skype, have been involved into legal limbo which could ultimately lead to shutting down of the business into the future. It has been stated that the ongoing case between Joltid and eBay could ultimately lead to disclosure. The two companies are facing disputes due to void in agreement as the owner of Skype; eBay has filed a suit stating that the company has not been able to end the agreement of license. But in return Joltid filed a case on eBay blaming Skype to violate the agreement. However the company has been focusing on new invention of software in order to keep continuing its popular audio and video services.7 Despite of the legal factors concerning Skype and its owner eBay, Skype has been able to make profit and with a change in time Skype would make it to the emerging countries along with its innovation in technology allowing its users to use it at any given time. Reference 1. Skype, “eBay Completes Acquisition of Skype” Skype Limited, 2012. http://about.skype.com/2005/11/ebay_completes_acquisition_of.html 2. Handlechner, Manuel. Risk Management. GRIN Verlag, 2008. 3. Shambler, Thomas. “Why Skype is blocked in the UAE”, Stuff Middle East, 2010. http://stuffmideast.com/2010/06/10/12556/why-skype-is-blocked-in-the-uae/ 4. Guha, Saikat. “An Experimental Study of the Skype Peer-to-Peer VoIP System”, UCSB, 2006. http://iptps06.cs.ucsb.edu/papers/Guha-skype06.pdf. 5. Knowledge @ Warton. “eBay Calling Skype: Is It a Good Connection?”, Warton, 2005. http://knowledge.wharton.upenn.edu/article.cfm?articleid=1291 6. Tapio, Antti. “Future of telecommunication – Internet telephony operator Skype”, Helsinki University of Technology, 2005. http://www.tml.tkk.fi/Publications/C/18/tapio.pdf. 7. Randomus, “Skype faces legal issues; possible closure”, Myce, 2009. http://www.myce.com/news/skype-faces-legal-issues-possible-closure-17889/. Read More