Strategic Marketing in Innovative Technology Companies - Case Study Example

Case Study Smith always sat in his shop with his iPhone. Networking on social media is part of his routine and visiting the various sites of the industry has become part of his life. Most customers who visit the shop are aware of his business even from the social media where Smith has posted various comments regarding the shop and his business. From his online profiles, the shop owner is well known from the uploaded photos.” Look at the comments on our business group” another customer told the shop owner who affirmed he will visit the site to go through the latest comments. Smith mostly accesses his customers and other business persons online where he advertises his products and interacts with other members in his group. Smith has made social networking part of his business and life such that he cannot conduct his business without his social networking. LinkedIn LinkedIn is a website for social networking for individuals in professional fields. The company was established in the year 2002 and formerly started its operations in the year 2003 (Botow & Taylor, 2009). The purpose of the company is to network and join different professionals on a social platform. As at June 2013, LinkedIn had a membership of 225 million professional users and being available in more than 200 territories and countries of the world The LinkedIn site can be found in 20 languages that include Italian, French, German, English, Dutch, Portuguese, Spanish, Russian, Swedish, Romanian, Czech, Turkish, Japanese, Indonesian, Polish, Korean, Tagalong and Malay (Sherman, 2013). As at July 2013, Quantcast issued a report having the United States as the largest user access of 65.6 million monthly visits and 178.4 million monthly global visits to the site. As at June 2011, the company had 33.9 unique visits. This was a 63% increase from the previous year. LinkedIn issued its initial public offer in January 2011. Its first shares were traded in 2011 May. The company used NYSE symbol LNKD. Background history The CEO of LinkedIn is Jeff Weiner, who previously worked for Yahoo! Inc. as an executive (Sherman, 2013). The establishment of LinkedIn can be traced to Rid Hoffman and other members from Socialnet.com and PayPal. Reid Hoffman, who previously worked as the CEO of LinkedIn, now chairs the company’s Board. The company has its headquarters in Mountain View, California. It has other offices in Omaha, New York, Chicago, Dublin and London. LinkedIn is financed by Sequoia capital, Bain capital ventures, European founders fund, Greylock and Bessemer venture Partners. As at March 2006, the company reached its profitability level. The company had gathered investments worth $103 million as at January 2011 (Breitbarth, 2011) Towards the end of the year 2003, series A investments were led by Sequoia Capital. Then in June the year 2008, Greylock partners, Sequoia and other capital ventures bought a stake in the company worth$53 million. This accounted for 5% stake in LinkedIn. Out of this acquisition the post evaluation result showed the company as having $1 billion worth of investments (Sherman, 2013). The company’s international headquarters in Ireland Dublin was opened in 2011. At that time, Tiger Global management gave the company $20 worth of investment. The post valuation of this investment stood at $2 billion. The company announced its acquisition of the Mspoke. The company also had its 1% subscription ratio improved. The Silicon Valley in October 2010 ranked the company in the 10th position out of 100 most start ups. LinkedIn was valued by private markets to be worthy $1.575 billion (Breitbarth, 2011). 2011 IPO In January 2011, the company filed its initial public offer. Its shares were first traded in the stock exchange in the May 2011. This was done under the New York Stock Exchange symbol LNKD. The IPO price per share was at $45. Within that first day of trade, LinkedIn shares rose by 171 percent. The day closed at $94.25. This was 109 percent beyond the initial public offer price. The site’s infrastructure was revised in order to allow for more and fast revision release cycles to take place (Gunneries, 2012). Social network industry It is very vital that there are many ways through which people can share information and exchange ideas. This can be done through networks and social communities. There exist applications that are internet based that are developed on technology and ideology that enable the exchange of knowledge and user generated content. LinkedIn is in this industry. Social media industry heavily depends on the web based and mobile technologies in order to come up with interactive platforms to enable communities and individuals to create, share, discus and comment and modify content generated by users. Social media has transformed the way of communication between individuals, communities and organizations (Bajde, 2010). There has been a big transformation between the social media industry and the mainstream media industry in that social media is more immediate and permanent. Most internet users spend a larger percentage of their internet time on social media networks. In the United States, internet users on social media increased to 121 billion minutes in the year 2012. This was a 37% increase from the previous year of 88 billion minutes. There is a lot of exclusivity in the social media. This is the major criticism of the industry. Most sites do not accept the transfer of data from one site to another, there is also other issues like the reliability of the given information, the information disparity and the kind of interactions created by the social media. The positive side of the social media industry includes its ability to democratize the social internet and the fact that individual internet users are able to advertise themselves and get to interact with others and create friendships(Bajde, 2010).. Advertising LinkedIn Feature LinkedIn earned $154.6 million in revenue from advertising in the first quarter of the financial year 2011. This surpassed Twitter, which had earned $139.5 million. In the fourth quarter of the year 2011, the social networking company LinkedIn had its earnings soured. This is attributed t o the success of the company in the world of social media (Schepp & Schepp, 2012). In the year 2012, during the spring in the San Francisco financial district, the company expanded by 57,120 square feet in its office space. The results of the first quarter of the year 2012 for the company were announced. Revenue had increased up to $188.5 from the previous year 2011 results of $ 93.9 million. This was 101% increase. The net revenue for the company had increased by almost 140% and had reached $5 million. The quarter two revenue results as was predicted had soured to $215 (Schepp & Schepp, 2012). A major problem and challenge to the company occurred in the year 2012. 6.4 million Cryptographic hashes LinkedIn user passwords were hacked and stolen. The hackers later on published the stolen hashes online by the hackers. This was heavily criticized by the security experts (Schepp & Schepp, 2012). The third quarter earnings of the company were released. The earnings per share were $0.22. The company had revenue of $252 million. Because of these results, the stock of the company went up and its shares were trading at $112 per share. Strategic market issue of significance LinkedIn Company in 2012 acquired at $ 4 million, 15 key patents. This included a click button in order to vote a story patent. In its quest to strategically position itself in the market, the company has acquired the following companies (Rutledge, 2010). Date of acquisition business company description Country price 4 August 2010 Adaptive content personalization Mspoke LinkedIn recommendations United States $0.6 million 23 Sept 2010 B2B social reviews Choice vendor Rate and review United States $0.39million 26 Jan. 2011 Social contacts Card Munch Scanning and importing business cards United States $1.7million 5 Oct.2011 Social CRM Connected LinkedIn Premium United States - 11 Oct. 2011 Social search Index Tank LinkedIn search United States - 22 Feb. 2012 Social contacts Rapportive - United States $15million 3 May 2012 Social content Slide Share Give members of LinkedIn means to discover themselves through content United States $119million 11 April 2013 Mobile/web reader Pulse Professional definitive publishing platform United States $90million LinkedIn’s Unique Position LinkedIn has uniquely positioned itself in the market, boasting to have more than 225 million members. The membership is drawn from over 200 territories and countries. It is better and much ahead of its competitors XING with 10 million members and Viadeo with only 50 million members. It has been approximated that the LinkedIn membership grows at the rate of two members per second (Breithbarth, 2011). As at January 2013, the LinkedIn membership was as follows. The total membership of the company is as follows in the last five years Year 2013 2012 2011 2010 2009 Members in millions 200 147 100 70 60 Features The site allows users who are registered to maintain a detailed contact list of users with whom that they a share some form of relationship. This relationship is called connections. The users who are already registered can invite other members whether registered or not to be part of the connection (Rutledge, 2010). However it has been noted that if an invitee commands spam or I don’t know, then this cancels the invitation. If many of such responses are received by the inviter, then that account may be closed or get restricted. The connection list can be used in many various ways. Through direct connections, a great contact network is created. This can be handful in introducing a mutual person to another individual that he would want to be introduced to. The feature of the company whereby an individual user would not be able to upload more than twice their resumes was removed in 2012 in order t o make the site friendlier (Crompton, Sautter & Sautter, 2011). The site can also be used by job seekers to find a vacancy or business opportunity recommended from a connection. Employees in their quest for the best talent in the market can as well target employees on this site (Rutledge, 2010). Those seeking employment can always review possible hiring manager’s profiles in order to possibly introduce themselves for possible opportunities. To identify the members, it is possible for users to post photos to be viewed by other members. Users are also able to follow different companies and be able to get information relevant to these companies and finally users are able to bookmark those jobs that they are interested in and that they would want to do an application in. It should also be noted that LinkedIn is a participant in the privacy principles of the European Union; the company has introduced a gated approach that enables users only access to other professional where there only exist a relationship or where there is a connection that can lead to that. The intention of this is to create trust amongst the site users (Crompton, Sautter & Sautter, 2011). The company had developed a site similar to that of yahoo, where questions can be asked and the community gives answers. The feature is called LinkedIn Answers. Unlike the one for yahoo, the identity of members asking questions are known and the questions asked are all business oriented. The company stopped supporting this feature as from January 2013 and instead replaced it with a different one with a focus on discussing development and sharing on professional topics on LinkedIn. LinkedIn had in the year2011 introduced yet another feature called LinkedIn polls. Another feature LinkedIn Direct Ads was launched in mid 2008. The main purpose for this was to sponsor adverts (Crompton, Sautter & Sautter, 2011). In the year 2008, the company announced its plans to open a social network with more than 30 million global professionals. The major aim of this was to carry out business related research. This was widely viewed as better promising than advertising. As at July 23, 2013, the company rolled out its sponsored programs where companies and individuals can pay some set fee to have their content sponsored by LinkedIn within their user base. This has generated more revenue to the social media company (Rutledge, 2010). Applications An application platform was launched by the company whereby, other online services can easily get embedded in another member’s profile page. Amazon reading is one of them. This enabled an individual member to display books that they are currently reading and those that they have read in the past (Elad, 2011). The TypePad, WordPress Trip it and SixApart were also launched that would allow the users to have a display of their latest blog that they have posted on their LinkedIn profile The company allowed businesses in 2010 November to list their services and products on the profile pages of the company. The company also encouraged its members to write reviews on the products and services and recommend the best products and services (Vincent & Valkenburg, 2013). The site’s mobile version was introduced in the year 2008. This gave reduced feature access that only fitted within the mobile phone. This mobile service version is available in six languages; English, French, Japanese, Chinese, German and Spanish. The company in January 2011 acquired CardMunch. This mobile app maker is able to create online contacts by scanning business cards. The mobile application was in August 2011 revamped into the Android, HTML5 and iPhone by the company. According to Jeff Weiner, the company’s CEO, the application views by mobile users has increased by over 400% (Vincent & Valkenburg, 2013). The company also encourages and supports the formation of interest groups. The company as at March 2012 had a total of 1,248,019 registered groups. The group membership lies between 1 and 744,662. The largest number of these groups is employment related. Mostly, areas covered by these groups are around career and professional issues. The company has 128,000 for corporate alumni and academics. The groups have managers and owners who moderate the group’s limited discussion. There are many firms that offer to provide spamming services. This is out of the need for the individual groups to avoid falling play to anti spam solutions. There are always spam posting, this is because of the ability of the groups to reach out to a very large audience. The company has come up with ways of minimizing spam. The latest approach used by the company was to remove the initial ability of the members in which they were able to inspect email address of the joining members. This was in a bid to determine whether they were spammers. The individual groups also maintain their members updated on the current and popular discussions. This information is only distributed between members of the same professional circle. The groups may either be private meaning that they are only accessible to members or they may be available to all other internet users. The internet users are however restricted to post any message not unless they join the group (Vincent & Valkenburg, 2013). Job Listings The company makes it possible for users to research on the companies that they may be willing to work for. Company statistics is availed whenever a user starts to search the name of the company in the site’s search box. The statistics includes the ratio of male to female workers in the organization, the titles of positions available in an organization, the place where the company has its head quarters and the list of its current and past employees. The company also had introduced a feature in the site, whereby the users are able to do a job application for vacancies preferred. The profile acts as the resume in the application. All applications for individual members are saved on the saved job tab (Elad, 2011). The company further has a feature that allows registered members to give an endorsement on another member’s skills. Through this, the members are allowed to efficiently issue a commentary on the profiles of other members. This allows the possibility of reinforcing network building. This means that members can only post content and cannot flag anything negative. Business Units There are three major business divisions from where the revenue is derived from. The first one is the talent solutions. In this division, the corporations and employers pay for their full branded page on the corporate section outlining the careers available. Any click on job ads is paid for. These ads target the members of the company whose profiles tallies with those of the job requirements. These employers also pay for any access made to the database of member’s resumes and profiles (Rutledge, 2010). The second division is the marketing solutions. The company advertisers pay for each click though those ads targeted. Finally the last division is the premium subscriptions. In this case, the users of the company also pay the users of business for business of the company, the talent employers of the company and finally from the company’s professionals sales for sales Reception Tec Republic an online trading publication described the described LinkedIn a de facto professional networking tool. The company has also been praised for fostering strong business relationship (Vincent & Valkenburg, 2013). The company has also been described the most beneficial tool of social networking to the job seekers and other professionals especially those in the business field. Marketing Problem In the year 2009, the users from Syria announced that the company server had stopped from accepting all connections with IP address originating from the country. The reasons issued by the LinkedIn support office were that the company’s services were subjected by the laws of the United States and their regulations. The company further stated that it would, as a matter of fact, then not accept members’ access or accounts from Iran, Cuba, North Korea, Syria and Sudan. Information came in the year 2011 that the company had been blocked in China resulting from Jasmine Revolution (Vincent & Valkenburg, 2013). These were in bid to bar dissidents from accessing twitter that had on the previous day been blocked. LinkedIn was restored back and members started accessing its services after a long day block. References Leskovec, J., Huttenlocher, D. P., & Kleinberg, J. (2010), Governance in social media: a case study of the Wikipedia promotion process. ICWSM 2010. 98-105 Bajde, D. (2010). User-generated content in business education. Cutting-Edge Social Media Approaches to Business Education. 95-115 Bridgen, L. (2011). Emotional Labour and the Pursuit of the Personal Brand: Public Relations Practitioners. Use of Social Media, Journal of Media Practice, 12(1): 61-76 Taber, L. R., & Taber, R. H. 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