Furthermore Nadler-Tushman Congruence Model will be also emphasized in accordance with the strategies of Skype. Finally the report will present the critical inputs of Skype and will then offer a conclusion based on the findings from the study. The next part will therefore put emphasis to the business strategy of Skype.
Skype mainly follows the business model, which is the combination of network effects model and service provision and thereby collective referred to as “freemium” model. Skype offers both free as well as premium services to the customers. Some of the applications that are offered free include chatting, Skype-to-Skype calling, file transfer, multi-party calling, and video calling. On the other hand premium or paid services comprise of Skype-In, Online numbers, Voicemail, subscriptions, Skype-Out and SMS. Since Skype offers a number of communication methods via internet, it has been able to target a large number of customers, who seek communication over the internet at low cost. In the recent past the company has also entered the mobile market by incorporating software that runs on a Smartphone. Skype also caters to the television segment along with the blue-ray devices. Hence from an overall viewpoint the basic business strategy of Skype is to have global coverage for the users of mobiles and computers.
Apart from generating revenues from the premium services, the company earns revenue by providing partnership perspectives through licensing, and advertisement opportunities (Hagstedt, Håkansson & Thideman, 2011). Nevertheless, one of the important factors that played a major role in driving the business of Skype is the security it offers to the customers and a strong brand reputation supported by Microsoft.
The three generic strategies of Porter include cost leadership strategy, differentiation strategy and focus strategy.