The value of an Online Platform

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I want to set-up an online platform where the average person can find information about the stock market. Mentioned before in the introduction I came up with this idea during my own research in enquiring information about the stock market. During this research I encountered numerous problems in understanding the things, because of the difficult jargon used. When sharing the information I got with other students they acknowledge the problem, because they had the same difficulties as I also encountered.

This all led to the idea of starting up an online platform containing information about the stock market and trading in layman terms. Everything will be explained in a step by step manner so that everybody can follow it. This site (blog) will act as a platform for information about the general stock market and will have the opportunities to expand into different areas in the future. E.g. Economic/ business related topics.

The product idea.

The idea is to set-up an online platform, this platform will be at first a website with a blog connected to it. This will be the initial stage to get the website up and running with information about the stock market and trading in layman terms.

The blog will be used to discuss topics that are related to the stock market and trading. These topics will depend on the market, because they will be about the current things happening on the market. For this blog people from the industry will be contacted if they are willing to write for the blog about their area of expertise and to give their view about the market.

In the beginning phase of the online platform it will be offered for free to its visitors. The platform will be for free in order to create awareness amongst the targeted audience. It will be free because in order for an online platform to survive it needs a certain amount of visitors. Out of these visitors the amount of unique visitors is even more important.

From this point the revenue will be generated by the advertising on the online platform. At a later stage when the amount of unique visitors has grown and we have a database with enough members there will be a premium function added to the platform. For this premium function the members have to pay a monthly fee. The premium function of the platform will contain relevant information about the stock market and advise on shares for instance.

The online platform will contain the following:

Blog/ website

Detailed information step by step about the stock market.

Trading information.

All information is in layman terms (understandable for everybody)

Room for specific advertising for revenue.

Possibility to expand into different business related areas.

1.2 Reflection on competencies

The BBA/IBMS competencies are the core elements a student must have when writing a thesis and attending this education. These competencies are measured in three levels, levels one, two and three. The difference here is that when you start with the IBMS program you should be level one and during the educational program you should grow to level three. For a student to start writing his or her thesis the student must be at level three.

When reflecting on the competencies, see appendix 1: competencies, I noticed that I already had experience in all of these areas. I had these experience because of my previous education, the courses given in school and due to the internships I did during the years. Because of this I reflected on these competencies as high and medium, but mostly high. The competencies I rated as medium are because of the fact that I was less interested in that certain subjects.

On an overall I could say that I have got a decent amount of knowledge about most of these competencies. However for some of the competencies I might need some additional help such as the financial part.

1.3 The fishbone diagram.

The Fishbone diagram also called the 'Ishikawa diagram' is a tool used to describe the problem and its causes. The fishbone diagram is used to indicate a problem and the causes of this problem for the research that is going to be carried out. Therefor the fishbone diagram serves as the backbone of this research.

In figure 1 you can see the fishbone diagram of this research to analyse the problem (fish head) ''if it is feasible to launch an online platform for the stock-market in layman terms''. As seen in the figure there are four main causes (bones) which are: 1 Market analysis, 2 Industry analysis, 3 Strategy analysis & 4 Financial plan. Each of these specific causes play an important factor to find out if the plan is feasible. The research of these causes will be conducted on the topics described in the sub-branches of the causes, they illustrate the areas to research in the cause.

Figure 1: the Fishbone diagram

1.4 The problem definition.

This thesis is being written to find out if it will be feasible to set-up and launch an online platform. The online platform will contain content related to the stock-market, but what will make this platform different from others is that the information will be presented in layman terms.

The main reasons behind this feasibility study is to find out if such a platform is needed. With this research there will be focused upon how to launch the online platform, how to generate revenue and how it will differ from the competitors. To find all these things out the main research goal was formulated, the research goal is:

''The goal of this thesis is to find out if it is feasible to launch an online platform about the stock market in layman terms''.

The research will be focussing upon the four causes displayed in the fishbone diagram, see figure 1. These four causes are:

Market analysis

Industry analysis

Strategy analysis

Financial plan

By researching these four causes they will generate results and data that will be analysed to come up with the correct solution and recommendation for the research goal.

1.5 Thesis objectives.

The research objectives for starting up this online platform can be divided into four causes. These causes are the main areas, which will be focused upon in this research.

The four causes:

Market analysis

This part of the research will focus upon the following areas: 'What is the interest for such a concept in the market'? (This analysis about the market will be done in the form of the DESTEP analysis, target group and a competitor analysis).

Industry analysis

With the industry analysis there will be focused on the aspect: 'how attractive is this concept to the industry'. (With the Industry analysis there will be focused at the size, characteristics and the general trends in the industry).

Strategy analysis

What will be the right strategy to use for launching such a concept into the market and what will be the right marketing plan that will be used to go along with the strategy. There will be different types of strategy analyzed and in the end there will be a recommendation given, which one will be best suited for the online platform.

Financial

What will be the resources needed in order to launch this concept and to keep it running. And how many visitors does the concept need in order to have a positive return on investment. (ROI)

After all the four objectives have been researched and the data collected has been analyzed a recommendation will be given. In this recommendation will be stated if the plan is feasible or not and what steps there has to be taken in order to make it feasible.

1.6 Research questions.

In paragraph 1.5 the objectives of this research are stated and explained. From these objectives that are derived out of the four main causes the following five main research questions are formulated. These research questions will help to find the information needed in order to meet the objectives.

Is the target group interested in such a concept?

How attractive is the industry to launch this concept in?

What will be the correct strategy to use for a concept like this?

What are the resources required to get this concept up and running?

How many visitors does the platform need in order to generate enough revenue to have a positive return on Investment (ROI)?

1.7 Chapter summary.

In this chapter the online platform for the stock market in laymen terms is introduced, by now you know that the online platform will contain many elements, which will make it very versatile and user friendly. In order to get the online platform up and running a feasibility study has to be done. This feasibility study will be guided through the help of the fishbone diagram presented in figure 1. Out the fishbone diagram the four main causes represent the main objectives of this research. These four objectives represent the following four research areas: Market, Industry, Strategy and Financial plan. In order to research these objectives five main research questions were formulated in order to collect data that will be used to give a recommendation in the end.

The next chapter contains the literary review with which theories will be used in order to find out if this online platform is feasible.

Chapter 2: Literature review

Introduction.

In this chapter the literature review is discussed. The literature review consists of theories which can be used to answer the research questions of this thesis. The research questions are derived out of the objectives, which were stated in the previous chapter. The theories in this chapter are theories that focus on one or more objectives. These theories will be eventually used to analyse the collected data and to answer the research questions.

2.1 Blue ocean strategy.

The 'Blue ocean strategy' is a theory proposed by W. Chan Kim and Renée Mauborgne in 2004. In this theory they proposed the creation of uncontested market space.

The theory works as followed: W. Chan Kim and Renée Mauborgne see the market as a red ocean where the companies compete fiercely with each other for market share and customers. What they proposed was to create a blue ocean. The blue ocean is where you create uncontested market space where competition has become irrelevant. According to W. Chan Kim and Renée Mauborgne the real opportunities lay in the creation of blue oceans. They say that you can only sustain high performance when you break free out of the competition of the red ocean. In figure 2 the differences are displayed between the red and blue oceans.

Figure 2: The difference between the red and blue ocean

'An important rule in blue ocean strategy is that you create your own demand from your customers rather than competing over it with your competitors'.

In order to create the blue ocean, Blue Ocean Strategy offers multiple tools and methodologies. The most important tools are: Value Innovation, Strategy Canvas, 4 actions framework, ERRC grid, PMS map, 4 tiers of noncustomers and 4 hurdles till execution.

Value innovation is a very important aspect in Blue Ocean Strategy, because here you look at the simultaneous pursuit of differentiation and low cost, see figure 3. Value innovation focuses upon making the competition irrelevant by creating a leap of value for buyers and the company. This leap of value leads to the creation of new and uncontested market space.

Figure 3: Value innovation

The value for the buyer comes from the offering's utility minus the price and the value for the company comes from offering's price minus the cost. This means that value innovation will only be achieved when the following aspects are all aligned: Utility, price and cost.

In the Blue Ocean Strategy methodology the 4 action framework and the ERRC grid, see figure 4 & 5, will help people in breaking the value-cost tradeoff by answering the following four questions.

What factors can be eliminated that the industry has taken for granted?

What factors can be reduced well below the industry's standard?

What factors can be raised well above the industry's standard?

What factors can be created that the industry has never offered?

Figure 4: Four Action Framework

Figure 5: ERRC grid

After the 4 questions are asked and the result is put into the ERRC-grid, the grid is analyzed and acted upon to create a new value curve.

The strategy canvas is a framework used to build and compel the blue ocean strategy, see figure 6. The horizontal axis shows the range of factors that the industry competes and invests in. The vertical axis shows the offering level that the buyers receive across all these competing factors.

Figure 6: Strategy Canvas

The strategy canvas had two purposes:

Firstly, to see what the current state of the market is. See where the competition is based and where they are investing in.

Secondly, it shows you where you have to shift your focus, from competitors to alternatives and from customers to noncustomers of the industry.

There are three tiers of noncustomers which can be turned into customers, see figure 7. This figure shows us the three tiers and what the relevant distance is from the market. The people in the first tier are the closest to your market. They sit right on the edge of the market, these noncustomers are familiar with the market and are trying to leave it. However these people can be turned into your customers when you present them the right opportunity of leap value.

The second tier of noncustomers are people whom have seen the industry offerings but refuse to purchase it. These people know that the offerings can fulfill their needs but have voted to not use them.

The third tier of noncustomers are the people the farthest away from your market. These non-customers are people who have never thought of using or purchasing the product or service. However when focusing on the key elements of these noncustomers companies can eventually learn how to reach them into the market.

Figure 7: 3 tiers of noncustomers

Motivation:

For the online platform I will be using the blue ocean strategy, because of the fact that I will be operating in a niche market. I will use this strategy to create my own unique market space in an area where there are a lot of website's present.

Source:

Kim, W. Chan., and Rene Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business School, 2005. Print.

2.2 The business model canvas.

The business model canvas is just like the name says a canvas in which you describe the business model of your company.

Business models are systems used by companies in order to sustain themselves and to achieve their corporate goals. The business model canvas shows and guides businesses how to conduct their business. In the business model: the business corporate purpose, mission and strategy is presented.

According to Alexander Osterwalder and Yves Pigneur the Business model canvas has nine building blocks, see figure 8.

Figure 8: the business model canvas

These building blocks illustrate the following on the business model canvas:

Customer segment

Value propositions

Channels

Customers relationships

Revenue streams

Key resources

Key activities

Key partnerships

Cost structure

Alexander Osterwalder and Yves Pigneur stated in their book that the business model canvas can be used by visionaries, game changers and challengers to redefine outmoded business models by designing tomorrows enterprises.

Motivation:

For the online platform I will need to use new strategies and how to differentiate myself from existing competitors. In order to keep track of everything that is happening it will be wise to design a business model canvas for the online platform.

Source:

Osterwalder, Alexander, Yves Pigneur, and Tim Clark. Business Model Generation: a Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ: Wiley, 2010. Print.

2.3 Web 2.0

Web 2.0 is the successor of the Web 1.0 standard, this standard is use to define the developments on the world wide web.

With the Web 1.0 standard people use to browse the internet and only were able to view and collect information. With the arrival of the Web 2.0 standard this changed, because from only a collection of information the websites became more a platform where the visitors could also participate.

The step which was taken to initiate the transfer from the web 1.0 standard to the web 2.0 standard was done in 2004. In 2004 the O'Reilly media conference was held, this was shortly after the internet bubble burst in 2001. After the burst of the internet bubble people saw that new internet sites were launched and that the sites that survived the burst had something in common. During the years till 2004 people argued what was the cause that these sites survived, was it maybe the web 2.0? The web 2.0 was not a standard yet, so in 2004 they scheduled the O'Reilly media web 2.0 conference. During a brainstorming session on the conference they came up with the 'web 2.0 meme map' which you can see in figure 9.

A few examples of these websites are the social media sites like facebook and youtube, but you could also consider normal sites which introduced multiple options on their websites.

In order for your website to comply with the web 2.0 standard it must include the following seven principles:

The web as platform.

Harnessing collective intelligence.

Data is the next Intel inside.

End of the software release cycle.

Lightweight programing models.

Software above the level of a single device.

Rich user experiences.

Figure 9: Web 2.0 Meme Map

Out of these 7 points the following things are the core competencies which your website must have in order to be web 2.0.

Services, not packaged software, with cost-effective scalability.

Control over unique, hard-to-recreate data sources that get richer as more people use them.

Trusting users as co-developers.

Harnessing collective intelligence.

Leveraging the long tail through customer self-service.

Software above the level of a single device.

Lightweight user interfaces, development models, AND business models.

Motivation:

The fact that the online platform will have an online presence, it is important to keep up with time. The online platform will operate not as a website only but as a platform linked to the different kind of social media. In the case of the online platform it is important to implement the Web 2.0 standard.

Source:

2.4 Co-creation.

Co-creation is a theory developed by C.K. Prahalad and Venkatram Ramaswamy in 2003. This theory is based upon the current trends in the market and value creation.

According to Prahalad and Ramaswamy the creation of value changed, in the past value was created inside the business and then exchanged with the customers. However nowadays the creation of value is done by businesses in collaboration with the customers. Prahalad also mentioned that we are moving away from a company- and product-centric view of value creation towards an experience-centric view of co-creation of value.

When looking at Co-creation there are six typical steps involved in co-creating value, these steps are:

Defining clear objectives for the project.

Figuring out who are the right customers to involve in the project.

Working with customers to find out what they really want to include in a product or service.

Designing products or systems jointly to meet those customers' needs.

Deciding how to share value.

Overcoming internal resistance to change - within seller, buyer and partner organizations.

However co-creation has got its disadvantages and limitations. The limitations are as followed:

Markets and industries and companies and systems and people do not change quickly.

Collaboration is a lot harder than competition.

The concept challenges many of the habits of managers.

Accounting rules that are based on what a company "owns", are also challenged.

Co-creation has got four different types as you can see in figure 10. These four types are: club of experts, crowd of people, coalition of parties and community of kindred spirits. When looking at the figure you can see that there are two main dimensions: openness and ownership.

Figure 10: 4 types of Co-creation

Motivation:

In order for the online platform to succeed and to keep attracting visitors/ customers it is important to create value. Co-creation will play an important aspect on the online platform, because it will be based upon the needs of the customers.

Source:

2.5 DESTEP analysis.

The DESTEP analysis is used to identify and analyze the macro environment factors, DESTEP stands for: Demographic, Environmental, Social, Technological, Economic and Political. The DESTEP-analysis is the more elaborate analysis of the STEP or also called PEST analysis. The main difference is that in the DESTEP you also look at the Demographic and environmental element.

This analysis is used to look at the external factors a company might face on the market. These external factors can be considered as opportunities or threads. Based upon these factors the company can implement them in their strategy in order to counteract the threads or to profit from the opportunities.

In the DESTEP analysis you will research each of the elements, the things you will research are as followed per element.

Demographics:

Here the research is conducted to find out information about the growth, size and structure of the market. Depending on the product or service you will conduct research on: age, gender, household, origin, income, population, etc. Everything that has to do with the demographics.

Environmental:

With the growing importance of the environment and the green movement is important to investigate this aspect. Depending on the product or service of the company certain elements can be more important. The elements you research are: Safety, climate, energy, sustainability, garbage, etc.

Social-cultural:

The behavior of your target group is very important and it keeps on getting more important especially with the growing importance of social media. To find out what moves your target group you have to research the social-cultural aspect. In your research you will focus on the following aspects: values and norms, behavior, level of education, religion, lifestyle, etc. Depending on the product or service certain elements can be more or less important.

Economic:

In order for your product or service to be sold it is important to look at the economic aspect, because it influences your sales for instance. In order for your research to grasp every aspect of this element you will conduct research on the following topics: purchasing power, GNP, unemployment, inflation, disposable income, income, etc.

Political:

Here you research the legal and political aspect your company might face in the country. The elements that you research are: the legislation, licenses needed, possible funds, regulations, taxes, political stability, employment laws, etc. This is an important aspect because you need to comply with the rules and regulations of the country.

Motivation:

For the online platform it is important to identify the opportunities and threads on the market. These opportunities or threads will be important, because of the role they will play in the strategy of the online platform.

Source:

2.6 The BCG Matrix.

Also called the growth share matrix is used to measure where a product or service stands in the market. The BCG Matrix, see figure 11, has two dimensions: Market share and Market growth. The product or service is measured by putting it in the BCG Matrix, this is done by looking at the Two dimensions. Based on the placement of the product or service in the BCG Matrix it is defined as one of the four categories:

Stars:

Stars are units with a high market share and a fast growing industry. They use a large amount of money and are leaders in their business.

Cash cows:

Cash cows are units with high market share in a slow growing industry. The profits and cash generation should be high, because of the low growth rate the investments needed are very low.

Dogs:

Dogs have got a low growth and a low market share. If your product or service is a dog you will break-even but you won't be able to maintain in the market, because there is not enough cash generated.

Question marks:

Question-marks have got a high growth rate but a low market share. The question marks are also known as the problem child. They are called this way because they grow very fast and consume a lot of cash, however due to the relative low market share they do not generate much cash. In the end if things don't change the company will make a loss as it costs more than that it generates cash.

Figure 11: the BCG-matrix

Depending on which category the product or service is in the BCG Matrix the business can take measures to assure a correct strategy to be used.

Motivation:

By analyzing the online platform in the BCG Matrix I will be able to see where it is situated. This will give the opportunity to get the online platform more effective in gaining market share and growth.

Source:

The next chapter deals with the methodology that is going to be used to conduct this research in order to find out if the online platform is feasible.

Chapter 3: Methodology

Introduction.

Appendices

Appendix 1: Competencies.

Profession-related competencies

International business competencies

Competency

International Business Awareness

Levels

Level 1

High

Level 2

High

Level 3

Medium/ high

Further specifications

Applicability to research subject

Medium

Coaching needed

none

Competency

Intercultural Competence

Levels

Level 1

High

Level 2

High

Level 3

High

Further specifications

Applicability to research subject

None/low

Coaching needed

none

General Management Competencies

Competency

International Strategic Vision Development

Levels

Level 1

high

Level 2

high

Level 3

medium

Further specifications

Applicability to research subject

Low/none

Coaching needed

none

Competency

Business processes &change management

Levels

Level 1

High

Level 2

High

Level 3

medium

Further specifications

Applicability to research subject

low

Coaching needed

maybe

Competency

Entrepreneurial management

Levels

Level 1

High

Level 2

High

Level 3

Medium/high

Further specifications

Applicability to research subject

high

Coaching needed

maybe

Functional key-areas competencies

Competency

International marketing and sales management

Levels

Level 1

High

Level 2

High

Level 3

high

Further specifications

Applicability to research subject

low

Coaching needed

none

Competency

International supply chain management

Levels

Level 1

High

Level 2

High

Level 3

High

Further specifications

Applicability to research subject

n/a

Coaching needed

none

Competency

International finance &accounting

Levels

Level 1

High

Level 2

High

Level 3

medium

Further specifications

Applicability to research subject

Medium/ high

Coaching needed

yes

Competency

International human resource management (HRM)

Levels

Level 1

High

Level 2

High

Level 3

High

Further specifications

Applicability to research subject

n/a

Coaching needed

none

Generic competencies

Interpersonal competencies

Competency

Leadership

Levels

Level 1

High

Level 2

High

Level 3

High

Further specifications

Applicability to research subject

n/a

Coaching needed

none

Competency

Co-operation

Levels

Level 1

High

Level 2

High

Level 3

High

Further specifications

Applicability to research subject

n/a

Coaching needed

none

Competency

Business Communication

Levels

Level 1

High

Level 2

High

Level 3

Medium/high

Further specifications

Applicability to research subject

medium

Coaching needed

maybe

Task-oriented competencies

Competency

Business research methods

Levels

Level 1

High

Level 2

High

Level 3

Medium

Further specifications

Applicability to research subject

High

Coaching needed

medium

Competency

Planning and organizing

Levels

Level 1

High

Level 2

High

Level 3

Medium/ high

Further specifications

Applicability to research subject

medium

Coaching needed

none

Intra-personal competencies

Competency

Learning and self-development

Levels

Level 1

High

Level 2

High

Level 3

Medium/ high

Further specifications

Applicability to research subject

medium

Coaching needed

maybe

Competency

Ethical and corporate responsibility

Levels

Level 1

High

Level 2

High

Level 3

Medium/ high

Further specifications

Applicability to research subject

n/a

Coaching needed

none

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