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VEVIDA : marketing strategy for a Dutch web hosting company

Geertsma, Systse (2009) VEVIDA : marketing strategy for a Dutch web hosting company.

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Abstract:The research problem addressed in this report is aimed at identifying a proper marketing strategy for VEVIDA, considering the organisation‟s strategic position. A combination of both quantitive and qualitative research techniques were used. Qualitative interviewing was used to gain insight into the strategic capabilities of VEVIDA, while a survey research was used to analyse customer preferences. The analysis of existing statistics provided additional information to investigate key issues in the environment. An analysis of the environment indicates an increasing level of (price) competition within the web hosting industry. Application-specific hosting services are slowly replacing the demand for web hosting services. Non-business customers are very price sensitive and can easily compare prices by using comparison websites. Combined with low switching costs, this leads to intense competitive rivalry among web hosting providers. Business customers, on the other hand, are less price sensitive. Opportunities arise from the trend towards outsourcing and the growing demand for Software as a Service (SaaS). VEVIDA‟s main strategic capability is economies of scale. The company‟s age and size, reputation and dedicated customer support facilities are also identified as competitive advantages. However, the lack of a clear marketing strategy and declining customer satisfaction inhibit VEVIDA from dealing with the concerns arising from the environment. VEVIDA‟s in-house developed control panel restricts development that could address these concerns. VEVIDA could add additional features to their web hosting service to deal with the threat of substitute services. Sitebuilder functionality is a common feature offered by competitors. This strategic option is only feasible when the legacy software is replaced by commercial control panel software. However, the human resource costs associated with the integration of commercial software are still very high, thus reducing the feasibility of this strategic option. A measurement of customer preferences also indicated a limited importance of sitebuilder functionality. An alternative strategic option is to implement additional services on a SaaS basis, addressing the trend towards outsourcing of IT functions, and the growing demand for the SaaS model. This option is advisable, because it will likely enable VEVIDA to gain higher profit margins. The costs associated with this option are also lower, as it does not require the complete restructuring of existing systems. Established support facilities and extensive experience with the Windows operating system would allow the company to benefit from economies of scope, while using their extensive client base to gain traction for their new services.
Item Type:Essay (Master)
Clients:
VEVIDA BV
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/59804
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