Analysis Of Six Forces Analysis AOL

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I’m in Desperate Need of a Strategy Signing onto the internet, the user listens to the guitar solo noise that comes from his modem. Always amused by the mystery of the clicking that comes from his computer, the user waits for another sound. Three words. “You’ve Got Mail,” his computer chimes as it finally signs in and opens the America Online homepage. For most Americans, the simple format of AOL was their first experience with the internet. However, as in any new technology market, the internet service market has rapidly evolved from its simple beginnings, calling AOL’s future dominance of the market into question. Six Forces Analysis AOL is in the internet service market; they deliver access to the internet. AOL does this through two major methods, dial up and broadband services. Accessing the internet was once a luxury, but is now becoming more and more necessary. People can quickly communicate through email and instant messenger. Employees can work from home on their computers without ever coming into an office. The amount of products and services available on the internet encompasses everything imaginable. Sites sell anything from tickets to rock concerts to groceries, even jet planes. The internet is also an incomprehensibly large information source. With hundreds of encyclopedias and dictionaries, as well as millions of independent articles, the internet has multiple resources about every topic imaginable. If someone has thought of it, someone has a website about it. The amount of products that complement the internet service is staggering. As stated earlier, there are thousands of services available on the internet that makes it more appealing. Nearly all computer products connect to the internet for some purpose. Email alone is enough of a reason for many individuals to require access to the internet. An email account used at home

can also be accessed from various hand held devices. New technology such as WiFi allows users to connect to the internet without even a wired connection. Such innovations are making the internet a greater and greater part of people’s lives as time goes on. There are very few substitutes for an internet service provider. Though the internet mimics many services, no single service could replace it. The internet is an excellent substitute for other devices such as mail service and telephones. However, these single commodities do little to match the diverse features of the internet. In addition to boasting a multitude of assets, internet access is very convenient. Most people receive access in the comfort of their homes. Any products ordered are shipped directly to the front door. Contrasting the number of substitutes, the amount of products that complement internet service is staggering. As mentioned before, there are thousands of services available on the internet that make it much more appealing. Likewise, most computer products can now link up to the internet. For example, the email account used at home can also be accessed from hand-held devices. New technology such as WiFi allows users to connect to the internet without a wired connection. Like the telephone before it, internet service is becoming a much more essential service. AOL was once essentially alone in providing internet service, but the market has been flooded by entrants. When dial up or low band service was the only option, AOL was the name brand. Now, the market is full of low dial up services. AllVantage offers unlimited hours, support, anti-spam and antivirus software, and a month to month contract for only $5.95 a month (https://www.allvantage.com/secure/buy.asp?plan=2). AOL was therefore forced to reduce

prices in 2003 from $23.90 to $9.95 a month in order to help stem the outgoing tide of 1 million customers in three months. AOL saw that, “many [customers were] going to cheaper dial-up services, primarily Juno and NetZero” (http://consumeraffairs.com/news03/ aol_netscape.html).

The amount of low band providers…