NUTRITION AND HEALTHY LIVING Nutrition and Healthy Living Waroud Alenezi 1 NUTRITION AND HEALTHY LIVING 2 Nutrition and Healthy Living-Business Plan Introduction Healthy living has been a challenge in modern day world due to the nature of lifestyle middle, and high-end families have adopted. The rising number of cardiovascular-related complications is attributed to unhealthy living standards and poor nutrition. Most urban centers have thriving fast food joints that serve a large population, as they offer quick and relatively cheap foodstuffs. The harsh economic times have forced family men and women work extra hours to cater for their needs. As such, they have limited time to identify and prepare nutritious homemade meals for themselves and family members. They all flock in fast foods day in day out to purchase the tasty but non-nutritious meals. Description Nutrition and healthy living is a unique and emerging issue in any society due to the fact that individuals have reached a turning point towards a sustainable lifestyle. Relevant stakeholders have held sensitization campaigns in various communities on the need to adopt a healthy lifestyle because the rate at which obesity, hypertension, cancer, diabetes, and other cardiovascular-related a condition is alarming (Visser, 2012). The unmet need is that the society, enterprises and other non-governmental bodies need to implement strategies towards minimization of such health complications, as they are preventable. Technology, school life, and careers have influenced healthy living among citizens in developing and developed economies. Unhealthy living is also a crisis in developing countries as they lack balanced diet components in their meals. Children are mostly affected by such situations, for example, hunger and famine in some African and Asian countries as they suffer malnutrition or even die. NUTRITION AND HEALTHY LIVING 3 Nutrition in most developed nations is however not due to lack of essential meals, but laxity and nature of lifestyle. There are families that are too busy to prepare a homemade meal for the family but prefer to purchase foods from stores. Such foods are mostly processed or cooked fast to meet customer demands, hence contain a lot of calories and other harmful components. The United States and the UK have the highest number of citizens living with health-related complications. Background Psychological issues like stress could lead to unhealthy living. It is not that people do it on purpose. Essentially, self-esteem in a person on how their bodies look is what matters most. Obesity if not well attended to physically through exercise, observing healthy eating habits and getting psychological counseling could be fatal. The various television shows have however seen a major transformation in enhancing healthy living, exercising and having the appropriate body size. It is not however in our place to criticize overweight people but encourage them to healthy living. It is essential to understand that fast food, just like drugs, is highly addictive and requires self-determination to give up. For example, a ban on fast food in Los Angeles failed despite the population comprising more than 50 percent obese individuals. Dependency levels are indirectly attributed to unhealthy living due to the economic and social effects it has on an individual. For young children, all their savings could be consumed at fast food because they offer a variety of delicious sugary and fast foods to them. When individuals develop unhealthy eating-related complications, they automatically become dependents to family members (Soldavini, 2016). Some of the conditions are life threatening hence require close medical and physical attention. Teenagers might also develop suicidal NUTRITION AND HEALTHY LIVING 4 thoughts. Health care expenses and other support mechanisms have to be catered for even though they might be in the productive stage of life. This drains the family capital and reserves and in turn, hurts the nation’s economy. Players A well-renowned businessman showed the intention of collaborating with the chain of fast foods in the United States. His major motivation was the fact that he survived cancer and henceforth, he has believed that it was partly contributed by unhealthy dietary habits. He then purposed to save others the calamity by diverting his business to a healthy restaurant and collaborating with other market players in the same industry. Fast food owners agreed to the idea after an intensive market research and identifying a market niche. The partnership has agreed to share its profits/losses in ratios of 1:1, and the business is expected to thrive because the communities in the USA have an unmet need of healthy eating Solution Past experience in the food industry would be an added advantage to meeting the market niche. The businessman will combine his expertise with that of the other stakeholders in the fast food industry to come up with a common solution to the need. In order to reduce the rising cases of cardiovascular diseases and obesity-related complications, there is need to maximize the preparation of healthy meals to encourage nutritional intake of meals (Visser, 2012). The combination of gym and spa services at the restaurants will ensure that clients consider accessing the all-in-one-roof services for their health benefits. The company, in turn, gains a large customer base which maximizes its profits and social welfare. NUTRITION AND HEALTHY LIVING 5 Company summary Kona is a new restaurant that has collaborated with various existing fast food stores form a nutrition-based network of restaurants across the country. The enterprise is initially focusing on attaining a wide market share to have high sales volume during its initiation phase. It aims at serving fresh, healthy grilled meat, vegetables, and natural fruit juices. The stakeholders invested in research to identify a market niche, and they realized that there was an outcry of increased cardiovascular-related complications, owing to unhealthy eating habits and livelihoods. The restaurant also aims at providing gym and spa services at affordable rates to its clients to ensure that an exercising and relaxation culture is embraced. The company’s mission is to become the leading healthy-eating network of restaurants across the United States. Its objectives are to launch a new joint on an annual basis and to offer high-quality and healthy meals at reasonable prices so as to reach a wide customer base based on their income levels. Kona keys to success are sticking to strict financial controls, offering simple, delicious and affordable meals, and customer satisfaction by offering additional services of gym and spa to promote healthy living among its customers. Success if such an enterprise is highly dependent on location and the company management has carefully selected its locations across the states for convenience and cost-effectiveness. SWOT Analysis Strengths • Reliable source of healthy food alternative and gym services to encourage the community residents to adopt a healthy lifestyle NUTRITION AND HEALTHY LIVING • Customer focus to enhance satisfaction and promote repeat visits and purchases by customers through quality service delivery of tasty but healthy meals and servings • Kona will also focus on pricing strategy to attract a large customer base and serve ethnic meals while offering promotions to generate traffic during off-peak or slow times Weaknesses • Kona will still need to train its entire staff so that they offer competitive personal service to all clients to reduce complaints and loss of customers to rival restaurants • Collaboration of the point-of-sale system is required as the partnership will need to be having congruent operations to meet its objectives • The challenge of not getting consistent supplies to offer healthy meal items might emanate in the beginning before acquiring reliable suppliers Opportunities • The company will offer more organic and healthy meals to meet the market niche of reducing cardiovascular-related complications, hence increased productivity • An opportunity for growth presents itself through compensation of slow times and offering website guidance on healthy meals • Delivery services, take-away organic salads, and meals setting up a drive-through and offering after-sales services present a potential opportunity Threats • The upcoming similar restaurants offering healthy meal items and similar experiences might pose a competitive threat to Kona business 6 NUTRITION AND HEALTHY LIVING • 7 The business might suffer a great blow if prices of food supplies increase because customers might opt alternative options and Kona's profitability decreases Marketing The company has embraced modern technology in its operations to avoid obsolescence, as such, its website is up-to-date and provides all information customer would require regarding nutrition and healthy living. Customers are able to make inquiries online for fast service response as well as pay for their purchases using credit cards and other financial methods conveniently. The company will also adopt print media to sensitize the public on the need to eat healthy even if it means cooking from nutritious home meals. For example, The Willamette Week would be more appropriate as it is commonly watched by families during entertainment. The enterprise will create an economic appeal to the community by issuing coupon-attached flyers. The company expects to reap greatly from the strategies by use of experienced and motivated staff to reach out to potential customers. During the first eight months of operations, Kona would present entertainment book coupons. During its launch, the company will focus on assessing customer-dining experiences and attend to the areas of complaints. If customers come back on a regular basis, or better still refer finds or family to the same restaurant, then the company would be headed in the right direction. However, a decrease in the number of meals served to customers, and dissatisfied customers who present numerous complaints and disappointments to the management is an indicator of inefficiency in service delivery. Production and operations The company has already made a network with the best suppliers of fresh vegetable, fruits, and other foodstuffs to be used in the preparation of their meals. The company targets NUTRITION AND HEALTHY LIVING 8 suppliers who desire to establish a long-term relationship for reliability. Quality should not also be compromised, as this would make customers disloyal given that the business is just beginning. The company also aims at recruiting professional staff in its operations departments that have been equipped with relevant competence and skills to meet the stipulated threshold (Borisova, 2017). Since the major business is food preparation and gym services, the resources required in the kitchen and gym area need to be efficient to meet customer needs and demands. Obsolete equipment would mean that customers are not satisfied hence they would be lost to rival companies. The meals and drinks need to be healthy and natural to enhance the company objectives. Its staff would be recruited on the basis of experience and matching professional credentials to drive the company business to the next level. There will be an appropriate chain of command even as the management involves its employees in decision-making regarding customer loyalty strategies and business development. The company aims at eliminating unhealthy fast food; hence each meal will essentially contain vegetable salad or a signature pineapple/watermelon slice to encourage customers to embrace healthy living and nutritious meals even when at home. Finance The number of employees is expected to increase with time due to the expansion of the business. Therefore, the company has forecasted that its total payroll expense will increase annually upon recruitment of new staff. The payroll expense will be $50,000, $100,000, and $ 150,000 in the first three years to be allocated to cooks, kitchen managers, and supervisors as well other miscellaneous operations. The company will receive cash from borrowing totaling $30,000 which will be repaid as debts fall due to avoid liquidation and tainted public reputation. NUTRITION AND HEALTHY LIVING 9 The current and future interest rates are expected to be 10 percent while taxation rate is 30 percent. It will also receive a new investment of $15,000 in the first year that will enable the company settles its operational expenses. The company focuses on making sales to individuals as well as families through varied servings depending on their demands and expectations. Sales from families form the largest proportion at an average of $7,800 annually while that of individuals is estimated at $3,200. Kona will focus on making family food servings that cater for the young, adult and old age members so as to maximize profitability and customer loyalty. During the summertime, the company will make the most sales as families are on vacation and desire to have time together in a serene environment that offers an all-under-one-roof experience to all family members. During the winter, the restaurant ought to receive increased bookings at the gym and spa because outdoor activities are limited. It is normal for the company to operate on negative returns at least for the first year because its focus is mainly on attaining customer base and learning the market trends. With such foundation, Kona will make huge profits in the subsequent years. Human resources The company will not have a detailed management and employee structure due to the nature of its operations. The two directors will be responsible for overseeing the general business performance and implementing new innovative strategies for business growth. The company aims at cutting down on costs hence chances of duplication of duties will be eliminated by training employees to perform related duties. During recruitment, however, the human resource manager will ensure that selection is done carefully to identify employees whose qualities and NUTRITION AND HEALTHY LIVING 10 motivations match the company core values and vision (Borisova, 2017). This will drive the company to great heights, as the employees will have the company’s interest at heart. To achieve cost-effectiveness and profitability at the same time, Kona will need to hire employees with experience in restaurant operations to cut down on training and development. However, as technology advances, the employees will need to be equipped with new competence and skills to meet the market standards. Additionally, new kitchen equipment will need to be purchased with advancement in technology to ensure that the restaurant does not remain obsolete and lose its competitive edge. An experienced project manager will be hired because the business is set to open more joints across the nation. Therefore, the location being strategic needs to be assessed and determined by professional personnel. The employees will be motivated depending on their performance in increasing profitability and increasing sales volume. Bonuses, promotions and recognition are set to keep the employees motivated and avoid losing talent to rivals. Information technology Kona will make a considerable investment in technology, approximating $17,000 to gain a competitive edge in the industry. Touchscreen food vendors with various variations will be able to meet customer demands and keep them satisfied and at the same time reducing the number of staff required. With the restaurant set to have traffic flow, tablet restaurant management will enable table views, menu catalogs, process sales and delivery tickets, and send the order to the kitchen. Customers will, therefore, be served faster, conveniently and workforce expenses will be reduced. The company will invest in LED alert systems to sensitize workers on time-based tasks as dishwashing since the kitchen is a busy and noisy environment. NUTRITION AND HEALTHY LIVING 11 Non-compliance with health regulation and safety codes in the kitchen area will be monitored closely through Webcams to avoid conflicts and litigation form relevant authorities. An IT manager will be responsible for the development and management of the company website to ensure that flaws are eliminated. Customers will require timely response to ordering food and its payment using digital methods, hence the need to keep it updated and operational 24/7. Customer complaints from failed technology should be prevented and eliminated as such destroys company reputation and reduces sales volume. The management should constantly learn technology trends and implement them at Kona depending on their relevance and market fit. Research and development Apart from promoting healthy living in the US community, the company aims at driving the economy through the restaurant business. The research will enable the management to identify market niche so as to meet customer expectations. The marketing team will be able to listen to customer complaints about other dining experiences so that similar mistakes are not repeated. According to National Restaurant Association, locally grown produce and healthy kid’s meals are on the trend, hence the need to focus on that (Soldavini, 2016). And since kids must be accompanied by parents and the entire family, customized healthy meals for them are also served to increase sales volume. Research on data mining and productivity will enable the company to adopt point-of-sale management software for its supplies, inventory control, and staff schedules hence increasing productivity. In conclusion, Kona seeks to offer excellent customer service, and delivery of meals served to gain customer loyalty. Personal touch with managers to assure quality to customers enhances appreciation by clients’ hence increased sales volume. Nutrition and healthy meals NUTRITION AND HEALTHY LIVING servings are emerging trends Kona desires to accomplish and establish a good foundation as compared to other entrants in the same market. During times of economic downturn currently being experienced, Kona seeks to provide simple, healthy and affordable meals to consumers. The company is expecting to garner profits in its early years of operation, as there is a ready market. 12 NUTRITION AND HEALTHY LIVING 13 References Borisova, A. (2017). Ways to Improve the Personnel Policy of the Restaurant Business. Path Of Science, 3(6), 1.15-1.19. http://dx.doi.org/10.22178/pos.23-6 Soldavini, J. (2016). Healthy Living Made Easy. Journal Of Nutrition Education And Behavior, 48(6), 431. http://dx.doi.org/10.1016/j.neb.2016.03.014 Visser, R. (2012). On the Prevention of Obesity and a Philosophy for Healthy Living. Food And Nutrition Sciences, 03(07), 970-974. http://dx.doi.org/10.4236/fns.2012.37128 Running head: SNAPCHAT 1 Shaimaa Saab Prof. Linowes MGMT 361-001 11 October 2017 SNAPCHAT 2 Snapchat Introduction The growth in the field of information technology has brought about numerous changes in the world, among them being an increase in social media sites. Social media refers to the technologies that allow individuals to share information, videos, images, and ideas among others through virtual communities. Many innovations have emerged in the creation of social media sites, with Snapchat being one of the most trending sites. Snapchat is a mobile application that allows image messaging and other forms of multimedia exchanges (Spalding, 2017). The application’s main concept is the ability to share pictures and messages for a short time after which they are rendered inaccessible. The purpose of this paper is to analyze Snapchat as a current innovation, focusing on areas such as its description, background, process, and the impact on the people and businesses, among others. Description The Snapchat innovation is unique when compared to other forms of social media such as Facebook, Instagram, YouTube, and Twitter among others. Unlike the other social media websites, Snapchat allows the users to share videos, images, and messages, which are only available for a short while after which they can no longer be accessed. In other social media sites, the shared media forms remain accessible to the followers of the users until when the user changes their privacy or chooses to delete or hide the messages. On the Snapchat, on the other hand, the disappearing nature of the multimedia messages shared is the unique feature that has made this innovation quite competitive in the social media industry. The application also informs the users about their snap updates saved by other users. This aspect is quite different from other applications, whereby the users can screenshot messages without the owner’s knowledge. SNAPCHAT 3 Additionally, Snapchat has managed to incorporate other features that are available on other social media websites alongside the unique features specific to this innovation. For example, while the information shared on other social media websites remain accessible, Snapchat ensures its users can still access the past posts by allowing an option to click on the message and have it saved on a private tab. This option is referred to as ‘memories’ in which story posts and snaps can be saved privately for future reference. Other social media website only allows the users to use the ‘check in’ option to indicate their location in a post. Snapchat, on the other hand, provides users with a choice of geofilters, which are accessible to individuals in a specific geographical location (Grant & Meadows, 2016). The geographical filters are graphical overlays that are available to the users in an event, city or particular destination (Grant & Meadows, 2016). In addition to the geofilters provided by the application, the users can also customize their geofilters, and submit them to Snapchat’s developers, allowing other users to use these filters. Source Snapchat is an invention that was designed by three former students of Stanford University, namely Evan Spiegel, Reggie Brown, and Bobby Murphy. The innovation started as a project by Spiegel and Brown as a project for one of the classes that Spiegel was attending as product design major at the Stanford University (Grant & Meadows, 2016). The underlying invention was an application that could allow the users take “selfies” and share them with others. However, this was not the only intention as Spiegel also had the idea that the “selfies” could be available for a short while, after which they would delete themselves. The name of the original application created by these students was ‘Picaboo’. The term can be attributed to the peek-a-boo play in which an individual hides their face and uncovers their face in front of the infant. SNAPCHAT 4 Therefore, in this application, the pictorial messages of the users could be visible for a moment and in the next moment, they could disappear. Spiegel and his friends were determined to create something that was quite different from what other social media developers had achieved so far. Moreover, the temporary nature of the images that could be shared with the Picaboo application was necessary for increasing fun among the users of the application. The inventors figured that it would be fun to have the images disappearing, thus creating curiosity among the users, who hoped to see what next their friends would be posting. Additionally, another underlying invention for Snapchat included the need to increase the flow of interactions on social media, making the flow more natural. Unlike in the other applications whereby the users can keep viewing one image even several years down the line, this innovation allows virtual communities to live one moment at a time. That is, once they have viewed the image or video, they are able to progress to the next moment, which is quite similar to the interactions among humans in the physical environment. Furthermore, the invention of a social media application with impermanent aspect was quite thrilling to Spiegel, although it would require a lot of effort to make this idea an actual application, giving users an incredible experience. Background There were numerous social media websites by 2011, among them including Facebook, Twitter, and Instagram. However, for Spiegel’s class project, he needed something unique with the potential of becoming an application recognized globally (Schoja, 2016). Brown, who was aware that Spiegel had a previous experience in business and needed a project for his class, initially voiced the idea. Brown and Spiegel worked together to create Picaboo for the class project. However, Spiegel’s classmates were not so thrilled with the idea of having a social media page that could only hold their photos temporarily, after which they could delete SNAPCHAT 5 themselves. They felt that this was quite inconvenient and could not provide a good virtual community experience for the users. However, Spiegel did not stop him from creating the application, and he brought in Murphy to write the source code for the application. After several months of working, the three were able to launch the app as Picaboo in July 2011. The application could initially run on iOS operating systems only. This was not the end of the journey, but a beginning to a more superior application. As of September 2011, Brown had been removed from the company, and Murphy and Spiegel worked together to re-launch the application as Snapchat. Unlike other founders of social media websites, Spiegel and Murphy did not put much effort on branding but rather concentrated on improving the technical aspects of the application, as well as its usability. However, they did not eliminate the “GhostfaceChillah” mascot design that had been developed by Brown as the logo of the application. The temporal nature of the posts was also an important aspect that the application. The two co-founders worked on ensuring that the application eliminated most of the problems that social media users experienced with other applications. For example, users of other applications engaged in emergency detagging and deleting of photographs before interviews to prevent interviewers from seeing images that could make them choose not to hire the individual. With disappearing images, it was quite unlikely that users could experience such problems. Therefore, Spiegel and Murphy managed to change the nature of the virtual communities. Players The main players for the Snapchat innovation were Spiegel, Murphy, and Brown. The three individuals worked together to produce Picaboo. Although Brown is no longer with the Snapchat team, he was one of the original authors of the idea behind the current application. SNAPCHAT 6 Brown came up with the idea but lacked the business experience that could lead to the actualization of this idea. Therefore, contacting Spiegel and informing him of this idea was the only way to make it work. After the presentation of the idea by Spiegel as his class project, the two took the next step of actualizing the idea. However, they were both experienced in terms of program coding. Therefore, Murphy was brought in to write the source code. After the launch of the application as Picaboo, Spiegel and Murphy decided to remove Brown and proceed as two partners (Schoja, 2016). After that, the two changed the application to Snapchat and started the Snapchat Inc. Brown asked to negotiate for his share in the ownership of the application, but Snapchat’s lawyers stated that he made no valuable contribution to the creation of the application. After numerous negotiations, Brown settled with Murphy and Spiegel for around $500 million. After the settlement, Murphy and Spiegel have grown the company to its current state as Snapchat Inc. Other players that were involved in the Snapchat innovation include the lectures that guided Spiegel to the completion of his class project. Having been a student at Stanford University, the lecturers checked to ensure that the source codes written for the project would work accordingly. At the end of the class that Spiegel was taking, he had managed to complete the program, while the rest of the upgrades were performed later. Spiegel's classmates played a part in the development of this application. Many of them felt that the application would not become a worldwide social media website, but would be used by the teenagers to share nude photos. Therefore, the co-founders were determined to prove the students wrong, leading to the creation of a trending application. NBC Universal was also involved in further development of Snapchat Inc. The two companies formed a strategic partnership that could help both of the firms SNAPCHAT 7 increase their growth. NBC Universal also courted the Snapchat's CEO, Spiegel, in an effort to make the relationship between the two companies stronger. Backing Various entities and individuals were involved in providing capital for the development of Snapchat. The initial venture capitalist was Barry Eggers, a partner at Lightspeed Ventures. His journey with Snapchat started when he learned about Snapchat from his high school daughter and her friends. He found the daughter and her friends business with their phones and laughing among them. He enquired what they were doing, and that is when they informed him about the application. On learning what Snapchat was about, Barry and his partner Jeremy Liew met the co-founders of the application and made an investment, becoming the first venture capitalist for Snapchat Inc. The total seed capital provided by Lightspeed ventures amounted to $480,000 (Spalding, 2017). The investment led Lightspeed Ventures to own 43,314,760 shares of the innovation’s class A stock. Barry and Jeremy individually own 8.6% of Snapchat’s Class B common stock. Barry also convinced St Francis High School to invest in the application. The school, which his daughter attended, made an investment of $15,000. Silicon Valley’s Benchmark was also another venture capitalist that also put some money in the development of Snapchat. In 2013, Snapchat required some more capital in Series A, causing Benchmark to invest $21 million, making it another large shareholder of the innovation. This investment led the company to own 13% of Snapchat Inc, as well as Class A and B common stock averaging at 65,799,720 shares (Schoja, 2016). The rise of Series B attracted Institutional Venture Partners and General Catalyst who also made investments to contribute the funds that were required. Another major investor at Snapchat Inc. is NBC Universal, which is making aggressive bets in digital media. This parent company of CNBC made an investment of SNAPCHAT 8 around $500 million in Snapchat Inc. The investment was made during Snapchat’s IPO, becoming part of Snapchat’s strategic partnerships. In addition, other investors, among them being Coatye Management, Alibaba, Yahoo, Graph Ventures, and Fidelity among others were also involved in raising funds for the growth of Snapchat Inc. and to help the developers to increase the application's feature. In total, Snapchat is said to have raised around $2.6 billion through the help of these investors and venture capitalists (Schoja, 2016). Moreover, much of these funds were obtained after Snapchat’s Co-founders made the decision to make Snapchat a publicly traded company. Process A lot of information concerning the steps used to get the innovation to its current state has been examined in the background and source sections of this paper. However, it is important to note that the current success of Snapchat can be highly attributed to the initial investors’ efforts to create an application that was unique, giving the users an interaction similar to the one that they would have in a physical environment. Although Brown originally floated the idea, it was through the efforts of Spiegel and Murphy that it was actualized and made into a company that it has become as of today. The source code for Snapchat was initially written to run on iOS, but improvements were made to ensure that the windows and Android operating systems also supported the application (Grant & Meadows, 2016). Spiegel focused on improving the application's features and operations, rather than increasing brand awareness. He was aware that with an amazing user experience, the spread of the application would be rampant. Additionally, the innovation was created with the aim of ensuring that technology could conform to humanity, rather than having the humans conforming to technology. He required that the application corresponds to the behavior of the people, which SNAPCHAT 9 inspired him to create features that could ensure that the application maintained the privacy of individuals while creating an environment in which people could interact with one another. For example, the disappearing nature of shared photos and videos was necessary to prevent the virtual community from reliving the embarrassing moments of an individual's life, as well as things that they might not be proud of in future. Impact Snapchat has an effect on individuals and business all over the world. One of the impacts of this application is on the privacy issues that are attributed to social media sites (Spalding, 2017). Arguments made state that the increase in social media sites has led to a significant decrease in the user privacy. However, Snapchat has changed this by showing the users that privacy exists in the application. That is, once the individual sets the allocated time for viewing the message sent, he or she is sure that the message is eliminated once it is viewed, and cannot be retrieved. Therefore, businesses are taking advantage of these aspects and joining Snapchat, whereby they can communicate with their customers to get honest feedback on areas that they need to improve. Another impact of Snapchat is that it is forcing businesses to become more like people, willing to listen to what other people have to say. Unlike the other social media platforms, Snapchat does not provide an option for creating a business page but expects business to open social media accounts similar to those used by the people. Through this strategy, the businesses have to interact with the people, increase their online presence, making it quite authentic. Furthermore, Snapchat increases business creativity and convenience in terms of marketing. Snapchat stories self-destruct after every 24 hours, which means that the business has the SNAPCHAT 10 opportunity to make updates severally, sharing some visual contents that could attract more customers. Snapchat capitalizes on the fact that people pay more attention to visual images than they do with text messages. Therefore, instead of using the traditional message types to communicate some information to the customers, companies can use visual messages to communicate and add a short caption, giving some additional benefits. Moreover, most customers and potential customers are too busy with other things and lack time to scroll through an entire text to understand the information being conveyed. Therefore, the small memorable advertisement of information presentation allowed by Snapchat is time-saving for the customers. Additionally, they also cause curiosity, as the client regularly checks the business page to get more information about a specific product or to find out what else the business offers. While Snapchat has the above-mentioned positive influences to businesses and individuals, it is also said to have a negative impact on the mental health of children. It causes the children to have a fear of missing whatever is going on in the virtual community. Therefore, the children spend much of their time n the site, rather than engaging in other activities that could increase their wellbeing. Snapchat has also become a haven for cyber bullies, whereby the information shared by the users is used against them, and they are bullied. Research indicates that many children suffer from anxiety and inadequacy feeling whenever they have few people interacting with them on this social media platform. Conclusion Social media growth continues to increase as the growth in technology expands. Snapchat is one of the most recent and successful innovations in the social media sector, especially due to the unique features that it possesses. Although the application began as a simple class project that SNAPCHAT 11 many people did not have any hope for success, the co-founders have worked earnestly to get the application to its current state. Snapchat has changed the nature of social media interactions, providing the users with a more thrilling experience. SNAPCHAT 12 References Grant, A. & Meadows, J. (2016). Communication technology update and fundamentals. New York: Routledge. Schoja, V. (2016). Snapchat Case Study with Teaching Notes. Hamburg: Anchor Academic Publishing. Spalding, M. (2017). Snapchat. Minneapolis, Minnesota: Checkerboard Library, an imprint of Abdo Publishing. Sabrina Bibbo Prof. Linowes MGMT 361-001 October 11th, 2017 Out With the Old and in With the New: Blockbuster vs. Netflix Introduction Change is happening everyday; it is the catalyst behind society’s progress to become more efficient. However, within the realm of business, changes come in the form of innovations. There has been one innovation specifically that has been able to go from just an idea to truly change the way individuals watch movies and television shows in just 20 years. That innovation is Netflix. However, Netflix’s revolutionary uprising did come at the expense of one company, Blockbuster. Blockbuster failed to successfully change to the consumers demands, while Netflix was able to thrive off of it. Despite being a significantly smaller company compared to Blockbuster in its beginning years, Netflix continues to be such a successful company because of its forward thinking and innovative mindset. Demise of Blockbuster David Cook, founder of Blockbuster in 1985, had a simple, but profound idea for his company at the time of its founding. Blockbuster allowed customers to pick from a variety of movies for a relatively cheap price for their own personal enjoyment. Christopher Harress, a writer for International Business Times, re-counted that at Blockbuster’s peak, it had over 9,000 stores worldwide with a market value of five billion and revenues close to six billion dollars. Harress goes on to further describe that in 2000, Netflix offered itself to Blockbuster for $50 million, but Blockbuster respectfully declined.1 This offer truly demonstrated how powerful of a 1 Christopher Harress, “The Sad End Of Blockbuster Video: The Onetime $5 Billion Company Is Being Liquidated As Competition From Online Giants Netflix And Hulu Prove All Too Much For The Iconic Brand” (Newsweek Media Group 2015). company Blockbuster once was, along with their sizable market value. However, just a few years later, Blockbuster began spiraling downward. According to Miriam Marcus and Steve Schaefer of Forbes, between 2003-2005 Blockbuster lost 75% of market value as competition from Netflix increased. They go on to state, “By 2010, competition from Netflix has decimated Blockbuster and a heavy debt burden has the company struggling to re-organize.”2 It was in that same year that Blockbuster would file for Chapter 11 Bankruptcy. Marcus and Schaefer further discuss how Dish Network bought Blockbuster for only $320 million, when their debt substantially surpassed this amount.3 From there on, Dish Network closed down the majority of Blockbuster’s locations which officially marked the abrupt end to a once prosperous company. It took less then 25 years for Blockbuster to go from a Fortune 500 company, to filing for bankruptcy. The force behind this sudden decline was the continued pressure from the Netflix’s rising success. Netflix’s popularity over Blockbuster was due largely in part to the fact that Netflix did not charge customers late fees on DVD rentals in their early years. Greg Satell, a writer for Forbes, importantly noted, “Yet Blockbuster’s model had a weakness that wasn't clear at the time. It earned an enormous amount of money by charging it’s customers late fees, which had become an important part of Blockbuster’s revenue model.”4 Harress backs up this assertion by pointing that in the year 2000 alone, Blockbuster made $800 million in late fees.5 Acquiring a significant amount of revenue off of a customer’s default was beneficial to Blockbuster but not to their customers, who are the underlying reason behind any company's success. Therefore, when Netflix did not offer late fees, customers found this incentivizing to move their loyalty 2 3 4 5 Miriam Marcus and Steve Schaefer, “A Timeline: The Blockbuster Life Cycle” (Forbes Magazine: 2011). Marcus and Schaefer, 2011. Greg Satell, “A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To” (Forbes Magazine: 2014). Harress, 2015. away from Blockbuster to Netflix, which ultimately triggered the beginning stages of Blockbuster’s eventual demise. Netflix’s Advantages As previously discussed, the downfall of Blockbuster can be most closely contributed to Netflix becoming a major player in the movie rental industry. Satell attributes Netflix’s early success to two major advantages: the fact that Netflix did not have physical stores and the use of the monthly subscription model, which eliminated late fees.6 With these two advantages, Netflix was able to lower overall costs, by not having to pay rent or hire more employees to runs stores. Additionally, they were able to keep customers happy and attract more by not boggling them down with ridiculous late fees. Robert Shaw, author of Why Pixar, Netflix, AirBnB, and Other Cutting-Edge Companies Succeed Where most Fail, points out that Netflix did not work with video tapes, but rather provided DVDs through the mail. He further discusses that Netflix’s founders saw that DVD players, which were rare at the time, would eventually drop in price and become more popular.7 This decision to use DVDs and not video tapes allowed Netflix to get a jump start in this unchartered territory that other movie rental companies did not seek out as early on. Shaw goes on to discuss that this structure gave Netflix a rapid turnaround of orders and at a lower cost because of the small size of DVDs.8 Ultimately, these early advantages in Netflix’s model can be narrowed down to be what inherently caused their quick popularity. Additionally, these advantages can be described as the key differences between Blockbuster and Netflix. In relation to these advantages, Satell importantly affirms that Netflix 6 Satell, 2014. Robert Bruce Shaw, Extreme Teams : Why Pixar, Netflix, AirBnB, and Other Cutting-Edge Companies Succeed Where most Fail (Amacom: 2017). 8 Shaw, 2017. 7 was a disruptive innovation, which meant Blockbuster had to completely alter their business model to remain in competition with Netflix.9 In other words, Netflix’s structure ensured that it would succeed in the future, leaving their competitors to eventually have to catch up with them. Essentially, Blockbuster was unable to infiltrate the business structure that Netflix had found its early success on, leaving this company to be blocked out of the industry permanently, allowing Netflix to continue its revolutionary take over. Major Players and the Early Years Behind all great innovations there is the individual who first had the idea. In this case, it was Netflix’s founders and well established entrepreneurs, Reed Hastings and Marc Randolph, who met from previously working together at another start up. As described by Tanza Loudenback of Business Insider, Hastings earned a Masters from Stanford, which turned him onto the entrepreneur model, and then led him to create Pure Software, a debugging tool for engineers. She goes on to discuss how Pure Software was acquired by another company, in which Hastings got over $700 million from this takeover.10 This is the acquisition that brought Randolph and Hastings together. In an interview with Business Journal, Randolph described how both himself and Hastings had the drive to be the “Amazon of something.” Randolph further discusses how it was himself who pushed the use of the internet and e-commerce to Hastings, who then in the summer of 1996, thought out Netflix’s original business model of DVD rentals through the mail.11 Despite popular belief, Netflix was not founded because Hastings incurred a $40 late fee from renting “Apollo 13” from Blockbuster; this story was simply used a media ploy to highlight a major weakness of Blockbuster. However, the other widely told story of Hastings 9 Satell, 2014. Tanza Loudenback, “Meet Reed Hastings, the Man Who Built Netflix” ( Business Insider Inc: 2015). 11 Jon Xavier, “Netflix's First CEO on Reed Hastings and How the Company Really Got Started” (American City Business Journals: 2014). 10 sending himself a CD in the mail to ensure the legitimacy of his idea is in fact true. In this interview, Randolph went on to note that after extensive research, Hastings wrote the first check for $2.5 million to officially start up Netflix.12 It was less than two years after Hastings first thought of the idea that Netflix would officially be open for business on April 14th, 1998. A writer for Success Story, Alicia Mathew notes that Netflix started with only 30 employees and had 900 rentals that were available to rent for a seven day period for just six dollars. She furthers that Netflix added the unique service of movie reviews and suggestions for customers based on their previous rentals.13 However, like all new businesses, Netflix struggled at first before it began seeing major profits. One of the challenges Hastings and Randolph first encountered was the simple fact that DVDs were not widely popular at the time because most households did not have DVD players. However, Mathew notes that Netflix made key relationships with Toshiba, HP, Apple and various other companies to promote DVD players and computers with a DVD drive.14 These relationships allowed the popularity of DVD players to soar, and therefore increase the demand for Netflix’s services. Another challenge the founders faced early on was in regards to their services. In Randolph’s interview, he discussed how in addition to renting DVDs, Netflix offered to sell them through their online platform as well. However, he furthered that they soon realized selling DVDs was not realistic due to increased competition from Amazon and Walmart who infiltrated this business.15 This left Hastings and Randolph in a tough spot because most of their revenue came from these sales but the current benefits were outweighed by the looming possibility of 12 13 14 15 Xavier, 2014. Alicia Mathew, “Netflix, Inc. Success Story” (successtory.com). Mathew. Xavier, 2014. being blocked out of the market. However, as time would tell the tale, they persevered and came out with new ideas which led to where they are today. Randolph importantly notes that Netflix’s innovation was essentially about being able to help people find movies they loved.16 This innovation that Randolph discusses is what has driven the company for the past 20 years and is the reasoning behind their major business decisions and their ability to overcome challenges. Rising Popularity These challenges is what drove the founders of Netflix to change its original model to something more unique and fitting for the changing times, as demonstrated by the fact that Netflix is the leading online streaming website with millions of subscribers. However, in order to get there, Netflix went through various changes to disseminate the company’s services. As described by Netflix’s Media website, their first major milestone was in 1999 when the subscription service was first formerly introduced.17 As noted earlier, this move was widely popular because it took away the aspect of late fees. According to Mathew, this move drastically increased orders to 10,000 a day.18 Since Netflix saw huge profits this early on, in 2002 they had their initial public offering on the New York Stock Exchange. Netflix Media notes that in just three years after their IPO, their subscriptions went from 600,000 in the U.S., to 4.2 million.19 This is an astounding 800% increase. Netflix used their rising popularity as way to make relationships with production studios for their movie titles. Mathew notes that some of these partnerships included Columbia Pictures and Warner Brothers.20 The movies acquired from these 16 17 18 19 20 Xavier, 2014. “Netflix Timeline” (Netflix: 2016). Mathew. Netflix, 2016. Mathew. partnerships drew in even more subscribers to Netflix and progressed their popularity even further. At this point in Netflix’s business life, it had a strong, loyal customer base which allowed Hastings to take risks to progress the company even further. As stated by Netflix Media, streaming became available in 2007.21 This simple decision is what revolutionized the way movies and television are now watched by individuals all over the globe; it is what truly made Netflix stand out against its competition. From there on, Netflix has kept rapidly growing. Between the years 2008-2010, Netflix Media notes the various partnerships with Xbox 360, Smart TVs, and Apple were formed to perpetuate widespread streaming.22 These partnerships ensured Netflix would acquire more subscribers because of the simplicity and accessibility of now watching from numerous devices. Finally, Netflix Media states how between the years 2010-2016, Netflix expanded to Canada, Latin America, Europe, Australia, and numerous other countries.23 These expansions brought Netflix to new astounding heights and once again inherently set the bar even higher for competitors to now reach. In addition to these significant changes, Netflix was able to create its own Emmy award winning and widely popular television shows, such as House of Cards and Orange is the New Black. These shows were just another step for Netflix to take on its rise to the top of online streaming. Altogether, Netflix has used its innovative mindset to think one step ahead of its competitors which has allowed it to reach such great heights. Worldwide Impacts 21 22 23 Netflix, 2016. Netflix, 2016. Netflix, 2016. It would be an understatement to say that Netflix’s impacts, especially over the past 10 years, has been anything short of astounding. Paul R. La Monica, a writer for CNN, reports in 2017, Netflix’s stock was up 30% and the company was worth more than $70 billion. Additionally he stated that in April, Netflix had over 100 million subscribers, with predictions of reaching 120 million by years end, and 130 million by the end of 2018.24 To go from just 600,000 subscribers to 100 million over the course of 15 years is a notable accomplishment and is a strong indicator of Netflix’s potential. In recent years, Netflix's success has been attributed to their original shows and movies. An article written in Forbes by the Trefis Team states that, “Netflix’s content acquisition spending has been highest among competitors in recent years and we believe this investment is paying off, enabling the company to retain and increase its subscriber base.”25 In other words, Netflix’s originals are drawing in millions of subscribers because there is no other way to watch these exclusive shows, therefore giving subscribers a reason to continue their memberships. Forbes continued that with a strong subscriber base and user growth, it ensures that Netflix can increase their spending on their own programming.26 Essentially, this puts Netflix in a win-win situation of continuously growing their subscriber base and investing in high quality originals, which attract mass audiences. Not only has Netflix garnered worldwide subscribers, it has unquestionably changed the way television shows are watched and now made. Benji Wilson, of the U.K. Telegraph, describes Netflix as a disruptive force to the television world. He further describes the way watching television has been changed, “ There are no schedules or live shows: subscribers are simply free to stream any of Netflix’s thousands of films and series to watch when they want and 24 25 26 Paul R. La Monica, “Netflix Is No House of Cards: It's worth $70 Billion” (Cable News Network: 2017). “Is Netflix’s Investment In Original Programming Paying Off?” (Forbes Magazine 2016). Forbes, 2016. where they want, whether on a traditional television, a tablet or a mobile phone.”27 Simply put, Netflix has been the leader behind the switch from watching shows when they appear live, to binge watching numerous episodes in one sitting, and the parallel switch from a television screen to a computer screen. Wilson also discusses that the way shows are now made are distinctively different from the past. He builds on this by noting that shows do not have to fit into a traditional schedule, they can be longer or shorter depending on the plot of the episode, and the use of cliff hangers at the end of episodes is obsolete because viewers can simply watch the next one right away.28 Producers of new television shows, that will be streamed online, use these tactics to their advantage and create astonishing pieces, like Netflix has been doing since 2013. Netflix’s impacts around the globe and in the television show industry itself are attributed to what the company was founded on. From the start, Hastings and Randolph expressed a mindset in which they were always thinking ahead of their competitors. Even when the Netflix name was created, Hastings did not call his company “DVD by mail” because he knew he wanted to be ready when video-on-demand happens.29 Moreover, Netflix predicated what the next huge success was about to be, did it, and to their benefit, it as always worked out. However, in his interview with Business Journal, Marc Randolph never thought Netflix would be able to disrupt Blockbuster.30 Yet, not only did Netflix disrupt Blockbuster, it was the leading force behind its downfall. Ultimately, with a drive like Hastings had for Netflix to succeed, this company’s widespread achievements should have been anticipated when their revolutionary idea first took hold. Conclusion 27 28 29 30 Benji Wilson, "How Netflix Changed the Way We Watch” (Telegraph Media Group: 2016). Wilson, 2016. Michelle Castillo, “Reed Hastings’ Story about the Founding of Netflix Has Changed Several Times” (CNBC LLC: 2017). Xavier, 2014. Netflix’s successes have surpassed what founders, Hastings and Randolph, and individuals around the world could have ever predicted. This company has managed to use its forward thinking and innovative mindset to its benefit by always staying one step ahead of the industry. In Netflix’s 20 years of existing, it has been able to attract over a 100 million subscribers worldwide, while forcing their previously largest competitor into bankruptcy. Netflix has been able to take hold of the changes happening all around the globe and harness them to their benefit because it is truly a company that thrives off change and has caused revolutionary transformations itself. Change will fundamentally continue to be the catalyst behind this innovation's prosperity in the coming years and push it to progress in unthinkable ways. Works Cited Castillo, Michelle. "Reed Hastings' Story about the Founding of Netflix Has Changed Several Times." CNBC. CNBC LLC, 23 May 2017. Web. 10 Oct. 2017. Harress, Christopher. "The Sad End Of Blockbuster Video: The Onetime $5 Billion Company Is Being Liquidated As Competition From Online Giants Netflix And Hulu Prove All Too Much For The Iconic Brand." International Business Times. Newsweek Media Group, 05 Dec. 2015. Web. 08 Oct. 2017. "Is Netflix's Investment In Original Programming Paying Off?" Forbes. Forbes Magazine, 18 Apr. 2016. Web. 09 Oct. 2017. La Monica, Paul R. "Netflix Is No House of Cards: It's worth $70 Billion." CNNMoney. Cable News Network, 30 May 2017. Web. 09 Oct. 2017. Loudenback, Tanza. "Meet Reed Hastings, the Man Who Built Netflix." Business Insider. Business Insider Inc., 6 Sept. 2015. Web. 8 Oct. 2017. Marcus, Miriam, and Steve Schaefer. "A Timeline: The Blockbuster Life Cycle." Forbes. Forbes Magazine, 07 Apr. 2011. Web. 8 Oct. 2017. Mathew, Alicia. "Netflix, Inc. Success Story." Success Story. Successstory.com, n.d. Web. 09 Oct. 2017. "Netflix Timeline." Netflix Media Center. Netflix, 2016. Web. 09 Oct. 2017. Satell, Greg. "A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To." Forbes. Forbes Magazine, 21 Sept. 2014. Web. 08 Oct. 2017. Shaw, Robert Bruce. Extreme Teams : Why Pixar, Netflix, AirBnB, and Other Cutting-Edge Companies Succeed Where most Fail. Amacom, 1 Feb. 2017. Web. 8 Oct. 2017. Wilson, Benji. "How Netflix Changed the Way We Watch." The Telegraph. Telegraph Media Group, 21 Nov. 2016. Web. 10 Oct. 2017. Xavier, Jon. "Netflix's First CEO on Reed Hastings and How the Company Really Got Started." Silicon Valley Business Journal. American City Business Journals, 9 Jan. 2014. Web. 09 Oct. 2017. Running head: SKYPE 1 Skype Hetaf Alhariry American University MGMT-361 SKYPE 2 Skype The past few years have seen an explosion in communication technology hinged on invention and innovation. Perhaps one of the most significant of the invention is the Internet and the launch of the World Wide Web at the turn of the century. With computers being able to communicate with one another and the masses able to access online pages and websites from the different web browsers available, the Internet and World Wide Web have ideally become the most important platforms for human communication. Perhaps of most importance has been the innovation that has been enabled by the availability of the internet, particularly about communication. For instance, email and instant messengers such as AIM, Yahoo Messenger, and Windows Live Messenger (initially MSN Messenger) were just among the first communication tools to be used by the masses over the internet. Largely, these communication tools allowed users to send text and images, as well as attach files (email) in communication with other users. Aside from instant messaging and email, voice and video calls have increasingly become popular since the establishment of the Internet. One of the most important inventions in voice and video calling over the Internet is Skype, whose launch had a significant impact on online communication (Fell, 2011). Skype has indeed changed the lives of many, by narrowing the distance between people, while at the same time saving on the cost of communication in comparison with traditional voice calls. Description Launched in 2003, Skype is a service that allows its registered users to call one another either for free over the internet, or purchasing its premium service, which comes with added benefits; calling landlines and mobile phones (Keane, 2010). The service allows users to send SKYPE 3 text messages as well as video messages in addition to allowing the exchange of digital documents. Perhaps the most distinctive of Skype’s services is the video call and video conference calls. In essence, the video call feature allows users to make video calls to one another through computers and cell phones, with the option of adding other users to the call for a video conference call. The video conference call feature allows a group, which contains up to 25 people, to participate in a video conference call at a time (Skype, 2017). Moreover, within the group feature is the option to have group chats, which ideally allows users to participate in online text chatting instead of the video conference call. Skype uses the voice-over-Internet protocol, a technology that lets users make telephone calls over the Internet. Essentially, voice-over-Internet protocol (VoIP) employs a technology that changes the analog voice signals into digital data packets sending them over the Internet network (Arora, 2000; Desantis, 2008). Arora (2000) informs of VoIP "VOIP can be achieved on any data network that uses IP like the Internet, Intranets, and Local Area Networks (LAN). Signaling protocols are used to set up and tear down calls, carry information required to locate users, and negotiate capabilities” (p. 2). While the technology relies on the Internet protocol and VoIP service providers such as Skype to provide the connection, interconnected services are much more intricate. According to Desantis (2008), interconnected VoIP services allow users to make and receive calls to and from traditional landline and mobile numbers, but for a service fee. According to Skype (Skype, 2017), it has such a feature, but users need to have Skype Credit or a subscription to make such calls. Source SKYPE 4 To facilitate calls, Skype uses peer-to-peer sharing software, which users download and install on their computers. Through the technology, Skype can have as many users as possible using the service for a small fee, and allow the network to be more stable and reliable (Aamoth, 2011). Furthermore, with the peer-to-peer service, Skype could essentially allow its users to use the service to make calls to each other across the world for free. The clarity, speed, and stability of the service’s network rely on the number of people using the network, hence the more reason why the service has continued to be popular (Aamoth, 2011). Skype’s underlying peer-to-peer network originates from Kazaa, a peer-to-peer file-sharing program launched in the early 2000s. At its launch, Kazaa enabled users to share different files among its users including music, video, and programs, a fact that made the program very popular (Aamoth, 2011). The essence the software and the file sharing feature is that it provides a connection between everyone on the network. Additionally, the network is built in such a way that there is no central server holding all the files. Thus, the more people there are on the network, the faster the network in sending files back and forth. Additionally, the more the number of people who are on with the specific file, the faster it is to download the specific file (Aamoth, 2011). In its rudimentary stages, Kazaa was a backend music-sharing software built by AhtiHeinla, PriitKasesalu, and Jaan Tallinn, all from Estonia. Niklas Zennstrom from Sweden and Janus Friis from Denmark then further developed Kazaa, later selling it to Sharman Networks (Aamoth, 2011). The idea and technology used in Kazaa, however, stuck with the two (Niklas Zennstrom and Janus Friis), and they used the idea to build Skype. In the new technology, the two used the peer-to-peer file sharing feature to bundle voice with the internet as a calling feature. The service then gained popularity since it allowed people from remote areas to make free, clear calls from and to other remote areas over the internet. SKYPE 5 At the onset, Skype only allowed people to make voice and video calls over the internet through their computers. All that the users needed were a headset for the earpiece and microphone, and they would then make the calls. Later, however, the company launched instant messaging and lived video conferencing, using the peer-to-peer network, which guaranteed clarity and stability (Aamoth, 2011). While all these were free at first, later the company began charging for making calls to landlines and mobile phones, as well as receiving the calls, although the charges have remained lower than thestandard phone charges for long distance calls. From its initial release, Skype has been a desktop application installed on the user’s computer and using the Internet connection to avail its services. Additionally, the application is available for Windows operating system, OS X (Mac) and Linux. With the proliferation of smartphones and tablets as well as other portable devices, the developers have released Skype for all these platforms. The application is, therefore, available for downloading from the App Store (for iOS), Play Store (for Android), for Windows (through the Universal Windows Platform release for all Windows-based products), BlackBerry, and Symbian. Background Skype’s underlying software Kazaa, built by the Estonian developers AhtiHeinla, PriitKasesalu and Jaan Tallinn, has the Estonian prime minister to thank for its existence. According to the Economist (2013), after independence from the Soviet Union, the prime minister created a good environment for business in Estonia through a flat income tax, sound money, and privatization. Also, the government embarked on building its digital system having declined Finland's free analog telephone exchange (The Economist, 2013). By 2000, the country SKYPE 6 (Estonia) had declared Internet access to be a human right, with free Wi-Fi a common occurrence in the country. These events set a precedence of a tech-savvy population, given the country’s belief and extensive use of the Internet and technology (The Economist, 2013). Therefore, with a belief in technology, the country experienced an upsurge in the number of technology start-ups, one among which wrote the code to Kazaa. The belief in the country on what technology could do and its widespread use in the country across different sectors, including education, set the precedence for the establishment of Kazaa. By meeting and building Kazaa as a peer-to-peer filesharing software, the Estonians, Swede, and Danish coders built the foundation for the development of Skype. While Skype is not the only VoIP service, the fact that it is free made for its great success. Having been borne by the peer-to-peer service that was Kazaa, Skype became widely popular in comparison with other VoIP services. The free Internet in Estonia and the very need to share files (and the service) had a great impact on the creation of Skype as a free online calling and chatting service. Undoubtedly, in the creation of Skype, the idea was to bring a free service that could allow people to communicate freely over the Internet, much as it was the idea in the creation of Kazaa as a free file sharing software (Arora, 2000; Desantis, 2008). The thought of the creation of Skype, and even its underlying software and functionalities came as a result of the success that came with Kazaa. Players Skype had Niklas Zennstrom from Sweden and Janus Friis from Denmark as the main entrepreneurs who worked in its creation and running in the early years of the company, and the SKYPE 7 innovation that allows people to make voice and video calls from the Internet on their desktop computers, and most recently on their mobile phones. With its headquarters in Luxembourg, Zennstrom and Friis had previously worked on the creation of Kazaa, a peer-to-peer file-sharing software in collaboration with AhtiHeinla, PriitKasesalu and Jaan Tallinn from Estonia (Fell, 2011). Having worked on the creation of Skype, Zennstrom and Friis released the first public beta version of the software in 2003, making its first official launch to the public (Fell, 2011). In the early beginnings of Skype, Zennstrom and Friis were the main players behind the software, who later made agreements with Onet.pl to offer the software to the Polish market. The agreement with the Polish web portal allowed Skype to access a more expansive market and exposure before its purchase by eBay, which paid $2.5 billion for a 65 percent stake in the company (Fell, 2011). eBay's purchase of Skype not only allowed the company (Skype) to gain more traction but also brought more performance-based considerations allowing the software to bring even more features, while at the same time registering more users. The performance-based considerations by eBay are especially visible given that in 2006, a year after its sale to eBay, Skype had more than 100 million registered users; double the users it had the previous year (Fell, 2011). Backing At the onset, Zennstrom and Friis were the only people involved in the investment and management of Skype. Additionally, considering that it was a free service, there was not much in revenue that the software brought, although it carried advertisements, which brought a little revenue. The introduction of Skype Credit and subscription, however, changed the company’s revenue streams, allowing it to earn some revenue from its users. With a $2.95 monthly SKYPE 8 subscription fee, users could make unlimited (within the fair usage policy) calls to landlines and mobile phones in the US. The feature allowed the company to gain more in revenue, in addition to the Skype-In feature, whereby people using landlines could call Skype users through a regular phone number for $12 for three months or $24 for a year (Fell, 2011). After its purchase by eBay, Skype added, even more, features given the monetary backing that came with such a purchase. By 2007, Skype was generating $382 million in revenue in addition to having more than 276 million active users (Fell, 2011). Skype's ownership by eBay was, however, did not last as the company (eBay) sold the online video and voice calling company to Silver Lake Partners and other investors for $2 billion (Horowitz, 2011). Skype's sale to Microsoft for $8.5 billion made things better for the Internet telephony company given Microsoft's financial backing and in-depth knowledge of the technology industry. Today, as part of Microsoft, Skype has become the default video calling app for all Microsoft products including Windows 10 and Xbox. Process From the onset of its launch, Skype was a desktop client. The first beta version released to the public in 2003 was a desktop application that allowed users to download and install the client on their desktops. In addition to running the native desktop client, Skype is also online on the web through its IP addresses skype.com and skype.net. Thus, after launching the native client software for users to download from Skype's online domains, users would register and have their accounts ready to make video and voice call over the Internet (Horowitz, 2011).Downloading Skype and installing on the desktop across different platforms, creating a username and being able to make free video and voice calls was the first step in disseminating the innovation. After its purchase by eBay, then Silver Lake Partners, and Microsoft eventually, the businesses SKYPE 9 increased advertisements to popularize some features the innovation, which was initially not part of the application. For instance, at its launch and a few years after its launch, Skype did not offer video conference calls. However, over the years, Skype has included video conferencing as part of its offering (Skype, 2017). With a proliferation of smartphones and other handheld devices, Skype has moved from just the to-go desktop video calling the client to becoming one of the most popular smartphone applications. Despite having competition on the Android and iOS platforms in Google Hangout and Apple's FaceTime, Skype's Android and iOS apps are still among the most popular for video calls (Horowitz, 2011). Today, therefore, users can easily download Skype from the App Store (iOS) and Play Store (Android) as well as Microsoft's Market Place onto their smartphones and easily make local and international calls to both Skype users and none-Skype users on their landline and mobile phones. Value Over the years, Skype has grown to become one of the most popular online voice and video calling application. From its launch to date, Skype has had unprecedented success in changing the way people communicate. Among the greatest impacts of Skype is making it possible of people to communicate across different platforms. With clients for desktop computer across the different platforms (Windows, Mac, Linux), Skype has essentially enabled easier communication among people, and at no cost to its users. Even more is that Skype is currently available for mobile phones across the different mobile device’s platforms. Although it faces competition from Google’s Hangouts and Apple’s FaceTime, Skype’s main advantage over its SKYPE 10 competitors is the ability to work across different platforms, while its competitors are platform specific. Skype's value goes beyond simply connecting people socially over long distances. According to Moskvitch (2013), Skype has become a professional tool used by people from different professions. For instance, doctors are actively using Skype to give instructions on procedures to peers far away, a feat that would have been impossible for voice or email. Moskvitch (2013) informs that doctors find it easier to give instructions and explain intricate procedure via video. Using video in this case makes it easier as the other can see what the other is doing, and provide immediate feedback, in addition to demonstrating the procedure.Making traditional international calls is an expensive affair to both the recipient and the maker of the call. Skype, on the other hand, offers a cheaper option for users to make local and international calls over the internet at a fraction of what telephone companies charge. Essentially, Skype allows people to keep in touch cheaply a fact that increases social bonding across the geographical divide (Moskvitch, 2013). Families, friends, and relatives can today stay in touch regularly at cheaper or no cost at all. On the other hand, sSkype allows businesses to communicate with their clients, other businesses, and employees, as well as enable employees working in teams to collaborate on different projects. Through a video conference call, employees working as a team on a project can communicate and work as if in one room. Skype for business, additionally, allows businesses to make, receive and transfer calls in the office, at home, and on the road at low rates. Given the availability of the software on both desktops and phones, businesses can, therefore, transfer these calls on PC and mobile. SKYPE 11 Skype continues to face competition from other cross-platform voice and video calling applications on smartphones such as Whatsapp, Viber, and ooVoo among others. However, it is noteworthy that while the competition offers greater choices to users, the revolution began with Skype. Moreover, while the new competition may be good at providing the video and voice calls on mobile phones, Skype remains the most dominant among online desktop telephony. The growth of Skype was unprecedented, and over the years, the company has retained most of the engineers who worked on the first iteration of the software, giving it consistency, and perhaps the stability it requires to keep connecting people and changing the world as it did when the service first launched in 2003. SKYPE 12 References Aamoth, D. (2011). A brief history of Skype.Time. Retrieved from http://techland.time.com/2011/05/10/a-brief-history-of-skype/. Arora, R. (2000). Voice over IP: Protocols and Standards.Washington University. Retrieved from https://www.cse.wustl.edu/~jain/cis788-99/ftp/voip_protocols.pdf. Desantis, M. (2008).Understanding voice over Internet protocol (VoIP). US-CERT. Retrieved from https://www.us-cert.gov/sites/default/files/publications/understanding_voip.pdf. Fell, J. (2011). Skype: From startup to $8.5B in eight years.Entrepreneur. Retrieved from https://www.entrepreneur.com/article/219621. Horowitz, B. (2011). Why the Skype investment worked.Fortune. Retrieved from http://fortune.com/2011/05/10/why-the-skype-investment-worked/. Keane, M. (2010).The secret to Skype’s success: Growing the online phone market.E Consultancy. Retrieved from https://econsultancy.com/blog/5272-the-secret-to-skype-ssuccess-growing-the-international-phone-market. Moskvitch, K. (2013). Skype: How the online chat revolution changed lives. BBC.Retrieved from http://www.bbc.com/news/technology-23862352. Skype.(2017). Groups calls. Retrieved from https://www.skype.com/en/features/group-calls/. The Economist (2013). How did Estonia become a leader in technology? The Economist. Retrieved from https://www.economist.com/blogs/economistexplains/2013/07/economist-explains-21
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