SWOT on "SWOT Analysis on Company of ABC Au and Reuters"

SWOT 3 pages (1435 words) Sources: 4 Style: Harvard

[EXCERPT] . . . .

SWOT Analysis: ABC/Reuters

The Australian Broadcasting Corporation has enjoyed some success in the Second Life virtual world. In 2007, they were receiving 1980 visits per week to their site (Winterford, 2007). The company has built this success by offering a wide range of content on their "island." The ABC island contains a mix of entertainment and information. The entertainment component is particularly strong for two reasons. One is that it contains uniquely Australian content, which is a relatively unique feature and a drawing point. The other reason is that ABC places emphasis on the same types of attention-grabbing entertainment that one would expect in any other medium. Indeed, ABC's island is in essence a virtual rendering of a newspaper or television channel. This plays to the inherent nature of the virtual world -- it is entertainment for the consumer. ABC draws traffic because it provides a variety of entertainment to its visitors. Thus, a key strength in the product offering itself.

Another strength is that the company drives traffic to the site. They have ABC Friends, which allows users to receive updates on new events and announcements with respect to the ABC island. This technique is common for other types of business in the real world, but not for media businesses. The ever-changing nature of their websites and channels is inherent -- there is little need to alert consumers to updates. However, within the virtual world this is more of a necessity, in part because the company's brand does not have as much equity in that world, but also in part because the virtual world has a relatively small population at present.

There are weaknesses to ABC's virtual world strategy, however. One is that the company is subject to security and vandalism. In May of 2007, the ABC island was all but destroyed by a hacker attack. Without adequate security, the island was bombed by the vandals. Undoubtedly the resulting publicity only helped to drive more traffic to the ABC island, but it also highlighted the weakness ABC has with respect to security in the virtual world.

The other main weakness of ABC's presence in the virtual world is that it is not profitable. The virtual world, at this point of development, is largely a marketing tool. This explains ABC's emphasis on content, but at some point the company is going to need to justify the expense and effort with real revenues.

There are a handful of opportunities as well. The Corporation can use the island to drive more traffic to its other media properties. Because the virtual world does not have a platform for direct sales, it serves as another marketing arm. ABC should therefore leverage the traffic that it gains in the virtual world to drive traffic back to the real world properties. In essence, the virtual world island and the real world website can develop a two-way traffic flow.

There are threats, however. The first is the threat of vandalism. Clearly, the hacker attacks on the ABC island in 2007 exposed the company to the negative side of the virtual world. An ever bigger threat is the slow uptake of the virtual world. In any other form of media, 2000 hits per week would be considered terrible traffic. Such performance s accepted because the virtual world is a new media form that has yet to reach critical mass. However, there are questions as to whether investments in the virtual world will pay off, given that traffic at Second Life has somewhat stagnated. For much of 2008, traffic stagnated. However, traffic growth began to accelerate again towards the end of 2008 (Wagner, 2009). The stalled growth, however, calls into question the long-term viability of the virtual world as a media form, representing the most significant threat to ABC's presence in Second Life.

ABC's eBusiness model is similar to the one it has established in real life. There is an element of the infomediary model in that ABC provides information and content. There are two drawback to this approach, however. One is that there exists no means to follow through on sales, so the approach generates traffic and attention but does not directly convert it into purchase. The second drawback is that because the virtual world is occupied by avatars, it is impossible for ABC to… READ MORE

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