2.2 goal and objective
2.3 data analysis and results
3.0 current state analysis
3.1 SWOT analysis
3.2 positioning analysis
4.0 Data and Analysis
4.2 collection of data
4.6 new item
This project is conducted by team 8 of Microeconomics class in KAIST. The objective is to analyze the item market of Cyworld using concepts and tools that we learned from the class. Cyworld is one of the biggest web communities and its profits are heavily dependent on the item market.
To collect data on the current status of the firm and how customers would react to the new systems, we conducted survey for 200 people in KAIST. Then we estimated future customer behavior and profit using the tools such as demand curve, game theory, willingness to pay, consumer surplus, profit calculation.
Several assumptions are made during the analysis. As long as they are not violated, its profit will increase by huge amount when adopting the strategies of reselling system, bundling sets, and new item.
There are limitations to the accuracy of the results, as the complexity of the reality cannot be reflected wholly. Nevertheless, our effort to analyze the item market and adopt what we learned from the class was useful experience.
Recently, based on the data from 2008 April 18th, Cyworld has peaked the highest number of webpage-view per day throughout Korean websites, at 790 million. This is also the maximum record for Cyworld itself, since the beginning of its service. The number shows what big influence the company has to the internet users- overpassing all the other webs! However, compared to this identifiable fact indicating the huge success of Cyworld, it is missing some marketing strategies to maximize their profit. These kinds of blog-run business can create profit only in the area of users’ item markets. So, first analyzing the item market, we will set up strategies to increase their profit. In the process, tools and concepts used in microeconomics will be implemented, concluding the expected additional profit with respect to each strategy.
2.2 Goals and Objectives
The goal is to find strategies to maximize the profit of Cyworld based on the analysis. As most of the profits are coming from item market, the attention was focused on the item market.
2.3 Data Analysis and Results
Data and information were mainly collected from the survey and internet.
Economical concepts used in this project includes monopoly market, marginal cost and revenue, profit maximization, consumer and producer surplus, utility, demand curve, willingness to pay, discount rate, game theory and strategic-decision making.
<Figure 1. Conceptual diagram of the outline
1) Micro Economics, 2nd Edition, David Besanko.
2) Game Theory, Morton D. Davis.
3) New Product Development, Samsung Economic Lab.
4) http://corp.nate.com Data of Page-view
5) http://www.cyworld.com Contents of Products