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Drop box case study analysis

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DROP BOX: “ IT JUST WORKS ” Case Analysis
Dropbox is a venture-backed Silicon Valley startup, founded in April 2007 by Drew Houston and Arash Ferdowsi, officially launched in September 2008. Should it change its strategy or not ?

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Drop box case study analysis

  1. 1. CASE ANALYSIS CASE ANALYSIS BY: DINKER VAID
  2. 2. Dropbox is a venture-backed Silicon Valley startup, founded in April 2007 by Drew Houston and Arash Ferdowsi, officially launched in September 2008. It provides online storage and backup services to millions of customers using a "freemium" (free + premium offers) business model. The case recounts Dropbox's history from conception through mid-2010, when founder/CEO Drew Houston must make strategic decisions about new product features, how to target enterprise customers, and whether to pursue distribution deals with smartphone manufacturers. Later on they launched BETA version for limited group of users who registered through a simple landing page. They used guerrilla marketing, online marketing, viral marketing. Houston wondered if dropbox should continues its strategy of offering a single products for all users or whether it should segment its diverse and growing user base, perhaps by creating a “professional” version that targeted the “power” user or a separate product for small/medium- sized business. DROP BOX: “ IT JUST WORKS ”
  3. 3. Founded in April 2007 by Drew Houston & Arash Ferdowski. Official launch in 2008 By 2010 a total capital of $257.2 million is raised Dropbox hires 6 MIT computer science majors but not any business managers An analytics engineer was hired to improve analytics and optimize customer acquisition efforts
  4. 4. PROBLEMS / KEY ISSUES 1: Houston’s dilemma was to whether continue Dropbox’s strategy of offering a single product for all users or whether it should segment its diverse and growing user base. 2: Customers wanted a service which enables the synching of files outside the Dropbox folder i.e. My Documents which Dropbox were deliberately avoiding to implement. 3: The other challenge was to find whether or not the users shared files with others, and whether or not the users used the application for business. 4: Hiring problem: getting the good employee is not a easy task, getting a wrong one might kill your business, Dropbox hires 6 MIT computer science majors, but not much luck with product or business manager hires. 5: Analytics and developers problem: An Analytics Engineer was hired to improve analytics and optimize customer acquisition efforts. 6: Problem in partnership: Partnering with a PC security software is discussed and an SVP disappoints Houston when he wants to bury the brand. They decide they need a VP of business development soon.
  5. 5. Dropbox synchronizes files across your computers and your team’s computers. It’s better than email, uploading or a Windows file share. It’s seamlessly integrated into Windows, but there’s also a web interface. It also stores past versions of documents, handles huge files gracefully, and works both through firewall and offline. For dropbox it was vey challenging to penetrate in the market as it already had so many competitors, and few of them are the leader such as Mozy, carbonite. But dropbox had have its unique features which none of them have, i.e it was somehow easy to enter in the market. Launching the votebox and apple and android apps was successful and performing very nicely. From their balance sheet which is provide in the case itself they are performing in a decent way getting the gross profit of $7,000 within one year, and they are 80% successful in retention rate.
  6. 6. It implies a $ 10-15 million revenue run by mid 2010, which proves profitable Dropbox had 4 million users in April 2010 with 2.8 million direct referral invites It is commendable that they have a $240 million revenue with only 70 staff members in 2011 Houston raised $257.2 million capital from investors
  7. 7. Recommendation/ Conclusions 1: Dropbox have a sign-up driven home page, free storage for referrals and free storage for connecting with social media so, drop box should offer a small –medium business version. 2: They should survive their current users and request feedback to see if this service is useful to their companies, Except this they should try to tie up with bigger data based companies and online portals too. 3: A dedicated Google analytics team can solve the problem of finding whether or not the users shared files with others, and whether or not the users used the application for business. 4: Dropbox should segment its diverse and growing user base as per usage rate.
  8. 8. 5: Houston’s idea of partnering with large manufacturers of tablets and smartphone by pre installing the Dropbox service in their devices should be implemented as it can help Dropbox to capture the whole of smartphone and tablet market. 6: They should try to tie up with bigger data based companies and online portals too. 7: To compete with rivals like Carbonite and Mozy, Dropbox have to rethink on their pricing and their freemium business model and offer suitable and flexible service to cater the demands of the customers. 8: Overall this has great future after having so many challenges dropbox is doing very well, there are some requirement of internal change and like employees and strategies.

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