Strategy in the case of BeeUp
Case study and task
A phone call via Skype
You are a strategy consultant and are responsible for a project on the BeeUp platform. To understand the details of the assignment you meet CEO Michael Czarniecki on Skype. Michael explains his concept of two-sided markets to you, which he thinks will be an important aspect in solving the problem.
Markets with network effects
The more people that sign up to Skype, the greater the number of Skype-members that can be reached by an individual user. This means that Skype’s value for the individual user increases with the overall number of users. This is known as the network effect. However, products with network properties face a huge problem: when these products launch, they do not have any users and therefore don’t have much value for early adopters. A specific threshold in total users has to be met before the product starts to offer value to individual users.
Two-sided markets are markets in which one party only benefits from the product offered if another user (for instance, from another industry) also uses that product. Consequently, two-sided markets are a special kind of market with a network effect. A typical example is credit cards. A market for credit cards will only be successful if the card is accepted by retailers and consumers. If one of the parties withdraws from the arrangement then the market will collapse for the other side because the value proposition can no longer be met.
BeeUp on the two-sided market
Over Skype, Michael explains to you: “You see, on the one hand, BeeUp helps companies find and implement new ideas and talents for their business development. However, at the same time this concept also supports people who want to improve their skills in a business context. If BeeUp fails to find companies with business development issues, the platform will be empty and no-one can participate in successful projects. If, however, BeeUp doesn’t manage to sign up people interested in self-improvement, companies will not benefit from having their case studies published. What I’d like from you is either a successful marketing concept that mobilises both parties, or a strategic response to the problem in form of strategic partnerships “.
You say: “Strategic partnerships are my specialty. But what do we need the marketing concept for?“
Michael replies: “Proper marketing will enable us to increase the number of users in both markets, even without strategic partnerships. I don’t know which of these measures is more effective: marketing or key partner management. For this purpose, I’ll send you BeeUp‘s simplified business model Canvas including both problem areas, as I have it in mind at the moment “.
You are provided with the below document:
Figure 1: business model Canvas for BeeUp, structurally based on (Osterwalder, Pigneur, & Smith, 2010)
You reply: “Thank you! I’d like to focus on measures related to strategic partnerships. It’s a tricky issue because it requires alliances for the companies as well as the users”.
Michael says: “Please do so! And don’t hesitate to call me if you need my support“.
In cooperation with your coach you might proceed as described below:
• You set up a team consisting of members interested in strategic partnerships in the corporate and the consumer sector.
• The team applies creative techniques. Which are the industries that might be able to solve the corporate or the user issue?
• Set up a SWOT for a venture with the industries that have been identified. Define SWOT-measures that involve BeeUp.
• Answer the following questions: how does BeeUp benefit the strategic partner and how does the strategic partner benefit BeeUp?
1. Read the case
2. Study the background materials
3. Check your knowledge by completing the multiple choice questions
4. Create a team that has the necessary skills to solve the case, or join an existing team
5. After you have successfully gathered your team you will be invited to a webinar by your supervisor
6. Solve the case as detailed in the assignment
7. As soon as you have completed the case, your work will be evaluated by instructors, experts, and your team members, and you will receive a certificate and feedback
1. In this case decide if you want to work on the user side, the company side, or both sides. Limiting your focus is often a formula for success!
2. Prepare the following document:
• 1st section: Users. List potential trades / companies / influencers that could help BeeUp acquire customers (e.g. business schools)
• 2nd section: Companies. List potential trades / companies / influencers that must also solve innovation problems for companies (e.g. consulting companies)
• 3rd section: Benefits for partners.
List the needs of these potential partners (users and companies) and how BeeUp can help satisfy those needs.
• 4th section: Goals and measures.
Formulate goals to be attained within these strategic partnerships. Use the goals, the identified potential partners and their needs to find specific measures. Consider the cost-benefit ratio.