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Now a day, the Electronic and Internet Services have developed rapidly; it is easy to see the result of the development of the industry in Hong Kong. As examples could you see Internet cafes, online game R&D and the Internet phenomenon of the population.
Moreover, these industries to Southeast Asia's economy has also brought a great impact and business opportunities, these opportunities are not every person can have, which requires a good hair long strategy, strengths and opportunities to master before they can be a new era of large speculators Success. In this assignment will be to Sunshine Network's development strategy to analyze the Electronic and Internet Services of the SOWT (Strengths, Weaknesses, Opportunities, Threats), as well as giving recommendations, proposals the company a better way forward.
Sunshine Network is the Group of Hong Kong's largest chain of Internet cafes, but also is the first group launched an Internet Cafe chain franchise program. Sunshine Network opened in 2002, has accumulated a considerable wealth of experience in Internet cafes chain management, service the entire territory for over thousands of members, franchisees and customers can provide one-stop professional services, network and computer use. 7 years has been impressive, multi-zone has branches, so that franchisees will concentrate on looking for clients, you can easily create wealth.There is Philosophy of Sunshine Network:
Through the integration of resources, the construction of the number of entertainment platforms.
Enhance the economies of scale, reducing cost and raising efficiency.
Enhance service quality, creating brand value.
Construction of chain platform to realize mutual benefit and win-win.
Internet Cafe chain industry of Hong Kong explorer, pioneer, sun network will continue to play its own characteristics and advantages, and to follow the basic principles of chains, Internet cafe chain to create the sun's rays become the most dynamic and influential brands.
In order to establish a chain of Internet cafes as a cornerstone of the network to build online entertainment channel, to raise our level of profitability chain of Internet cafes, Internet cafes to open up the business value chain.
Internet Cafe chain is owned by members of the main building with a huge consumption power of the sun and the network of member systems. On this basis, and build a very dynamic online entertainment platform to enhance the business value chain of Internet cafes. Internet cafe chain system of the sun's rays to create a line of consumer entertainment center, promotion center, experience center, service center and trading center.
Taken to set up direct sales stores and franchise development (join) two ways to create specifications and a competitive edge and uniqueness of the sun network chain management system, and create a healthy environment for the development of industrial cyber cafes.
"Culture, entertainment, science and technology" is the core of the sun network, "Health, rest assured that" the sun the network's brand image
The Electronic and Internet Services of the advantages of better than many industries, especially in Internet cafes, online game R & D and the Internet phenomenon of the population. Which, Sunshine's biggest advantage is that branch location, relatively low cost, but also Hong Kong's first large chain Internet cafes, the biggest brand, attracting a large number of computer users, and co-operation with many online game companies, computer hardware or software companies, and film company, to get most project and lowest cost.
Because of the Electronic and Internet Services have developed rapidly, Internet cafes, online game R&D and the Internet phenomenon of the population company are more and more in South-Eastern Asia, Internet cafes in Hong Kong began to compete fiercely. It is because of the Internet cafes opening cost are very low and esay to build up,there has lot of new Internet cafes set up, As examples the second-largest chain of Internet cafes - I-ONE ,and the third largest chain of Internet cafes - MangoNetWork.It make he cafe industry is highly competitive.
Because of the Electronic and Internet Services have developed rapidly, lot of Asia Governments have provided support large-scale sports activities, computer games, computer games, exhibitions. This is a new direction for regional economic and cultural exchanges, one of the Hong Kong Government has plans to follow in Taiwan, Japan, Korea, computer games development in Hong Kong to organize and ballot Painting the future more computer games, while the local computer games also support the development of these policies, to support Internet cafe industry source, as well as operate more large-scale computer-game activities.
At the same time,there are lot of people have the computer their own salf that can substitute for Internet café in Hong Kong, How the Internet café keep the Festive atmosphere of the game and The best hardware and software is the main Issues with the cafe industry.
The Electronic and Internet Services are face of emerging markets - the rapid development of Taiwan, Hong Kong's computer games, exhibitions and competitions lack of operational experience, coupled with the development of local game companies affected by the technical personnel, so that Hong Kong may be suppressed by the loss of conditions for the development of Taiwan, Hong Kong Internet cafe industry is also Be the face of education policy, the 18-year-old young people under the patronage may decrease the number of Internet cafes and other factors, the above two factors, so that the future development of Internet cafes industry worries.
Value chain model
Value chain, also known as value chain analysis, value chain model. By Michael Porter in 1985, in the "Competitive Advantage" a book made. Porter pointed out that enterprises should develop a unique competitive advantage for their goods and services to create higher value-added, business strategy is to deconstruct business models (process) as a series of value-added processes, and this series of value-added processes, that is, "value chain."
The Electronic and Internet Services Primary Activities
Sunshine Network main think the general computer users provide customers with a rental of computer clerical work, the Internet communication and computer games computer using the service, In addition, different types of companies also provide sales and promotion services, marketing and promotion of these services are directly for these target customers. These services and products arising from the value, enough to meet the different needs of customers and co-operation the public:
To provide customers with computer rental and the use of space.
To promote the general computer users to promote Cooperation company's products, for these target customers with computer software (anti-virus software, instruments, software, computer / online games software) or computer hardware companys.
To support the partner companies to run computer games contest or game promotion.
The Electronic and Internet Services Internal environment
Sunshine Network Value chain model
We can see the following Primary Activities -Inbound Logistics, Operations, Marketing and Sales, to analysis the whole Value chain operation, Sunshine Network Value chain are successfully let the Primary Activities with the Support Activities that they using the Human resources management, Technology development and Procurement very well in operation the entire branch network.
The Electronic and Internet Services provide computer rental and Advertising and Promotion,that is computer handware and software , Sunshine Network are different with others Competitor that there computer handware Purchase computer parts from the manufacturer of computer non-assembled parts, and assemble their own computers and repair computers, which make the Sunshine Network do not have to purchase the retail
Computer vendors have been assembled computers and, cost-effective.
There is not all the software come from the computer software company that when the Sunshine Network assembled the store computer and installed the game software, instruments, software, etc , After that Sunshine Network develop and using there own managament software and manage the cafes computer, reduce costs, human and management resources.
And the Independent and safe managament software are the advantage that reduces costs in the The Electronic and Internet Services Industry.
Marketing and Sales
Provide the computer rental and Advertising and Promotion Services, by the employees leased to the customer hourly. Sunshine Network staff many of which are parttime job and at the same time Because peter In addition to using the direct mode of operating the operation, will also increase the Franchise Chain of the member, to expand their businesses, it means the Staff expenses.are very low . Use of the branch managers and systematic management software Can also ensure that employees and service quality.
It also show what advantages that the Sunshine Network in those analysis that is the Cost advantage and the Differentiation.
Sunshine Network using there own managament system to manage their computer and staff. It make the resources can be effectively carried out(When the customer computer does not use or have left, system will remind the staff to close down the computer, make sure the electricity will not be wasted, but also protect the customer can save the next one waiting to use the computer), and With a large-scale purchase of computer hardware parts and self-assembly, maintenance ,using the directly operated stores with the Franchise Chain of the member, Sunshine Network has a great Cost Control, make it bacome the Cost advantage to face of competition.
It is different with other Internet cafes that many Internet cafes managament system are come from software company ,it many have many Restrictions on software, so that customers can not use other software company's computer software.The Sunshine Network managament system can let the customers maximize and free to use their computers, without managament system of control, with the installation of multiple types of software, and their comparison with other computer services, a more complete and the quality of Internet cafes.
Five Forces Model
Michael Porter's Five Forces analysis of the 1979's structure, its use is to define a high or low degree of market appeal. Porter argued that the attractiveness of the five forces influence the market economy is an individual face, rather than the overall economy is generally believed that surface. 5 kinds of forces that closely affect the company's services by customers and profitability dimensions the composition of any force changes are likely to attract companies to exit or enter the market.
The threat of substitute products or services
There is only one substitute products can substitute for the Internet cafes, it is the Home computer. There are lot of people have the computer their own salf that can substitute for Internet café in Hong Kong. Half of the customers are enjoy a Intense competition in the atmosphere of the game leads to the consumption of Internet cafes lot of that they have their Home computer, 40% of the customers their Home computer are not really powerful to using or running the software, and there are 10% of the customers they really don't have the Home computer.It means the Games atmosphere and the computer of the Internet cafes is the main factors that attract customers.And the same time, it Affect the customer rents of a computer, Half of the customers to enjoy Games atmosphere are not very care about the rent because of the Home computer can not substitute for it. And because of the rents hourly,the pries to buy a powerful Home computer may let customers using Internet cafes Services for half year.So it show that the problom may not be serious.
The threat of potential entrants
Because of the Internet cafes start up very easy and the cost are relatively low, there are lot of the potential entrants may enter the Internet cafes market ,if they can following the Sunshine Network to purchase computer parts from the manufacturer of computer non-assembled parts and develop their own software it may easily to catch up the Sunshine Network, In particular, some major gaming site / forums, they are very interested in attacking the industry.But there are one barriers can completely squelch competitors, it is the Regional advantage. Sunshine Network each residential area around the Hong Kong and urban centers.It is the NO. 1 challenge of the Potential entrants enter the Industry.
The intensity of competitive rivalry
Sunshine Network is the NO.1 top Internet café company in Hong Kong that they have Cost advantage, Regional advantage and the Brand equity advantage to face on the competitive rivalry.Now a day there are three top competitor in Hong Kong ,it is I-ONE ,MangoNetWork ,and SuperNet.Those Internet café Regardless of regional, prices and services are caused by direct competition.But because of the Sunshine Network With most game companies and software companies have cooperation agreements, as well as he has organized large-scale gaming activities and publicity experience.Those three competitor Performance Development is very slow.
The bargaining power of customers
Because of the prise is low and be setting a fixed-prise, the bargaining power of customers is very low that in the competition all Internet café are almost same and because of the substitut services only have Home computer that the prise can't easily comparison, at the same time because of the prise is low ,the customers almost no Comments of the pries.On the other hand , the project with the company's game activities to promote that only Sunshine Network has that experience and the activities place.Games and Software company may not be bargaining of the prise.
The bargaining power of suppliers
Because of the Sunshine Network urchase computer parts from the manufacturer of computer non-assembled parts, and assemble their own computers and repair computers, which make the Sunshine Network do not have to purchase the retail
Computer vendors have been assembled computer and evelop and using there own managament software, the bargaining power of suppliers are not very high, it is almost self-sufficiency .On the other hand ,Because of the Franchise Chain and alost all employee are parttime job, there is no Association to increase the bargaining power of suppliers.
Conclusion With Suggestions and recommendation
The above external and internal environmental factors, although some have substantial competitive advantage (cost advantage, geographical advantages, technological advantages, new business and brand advantage), but there is still a crisis and weaknesses of the need to improve (potential competitors, substitute products, government policies, etc. need to closely monitor the future and change places), here will conclude with some improvement strategy.
The threat of potential entrants competitors
In order to cope with the threat posed by potential competitors (large entertainment companies, game site), the company should pay attention to market trends, such as the increasing activities of the game now, companies need to move the game to increase the activities of experience (more Cooperation with computer games and software development companies, On the one hand for both sides propaganda, on the one hand to increase both revenue and win-win) and to improve the quality of activities place.
The threat of substitute products or services
In order to avoid losing advantages of computer hardware and game atmosphere, the company should continue to the first low-cost title in the development of new programs and improved computer hardware and catch up with world-class and multi-point to organize their own play activities.
The Hong Kong Government in a few years ago, vigorously promote the digital, electronics, computer technology development, the construction of the digital ports, and in line with Taiwan, Japan, South Korea's policy of support for computer games, online games development and R & D, holding large-scale games, exhibitions (for example, Ani-Com & Games Hong Kong , Asia Game Show), in other areas, Internet cafes industry has always been to support these activities, sponsors.And the Sunshine Network needs to organize activities in the performance of a more mature (for example, parttime employees currently are favored activities for the retention of experienced staff are difficult)
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