Hootsuite: Monetizing Harvard Case Solution & Analysis

Hootsuite: Monetizing The Social Media Dashboard

Company description and history:

Hootsuite is a Vancouver-based start-up company that is engaged in the creation of one of the web’s hottest social media dashboards. Before developing Hootsuite, Ryan Holmes, founder and CEO of the company had started several businesses including a paintball products distributor and a pizza restaurant. Holmes had spent almost eight years building his third company known as Invoke Media. It was a web service and marketing agency, where he developed Hootsuite. Version one of Hootsuite was launched in December 2008 initially, at no cost to users. By the end of December 2009, Hootsuite was spun off as a separate business.

Heavy users, or prosumers and business could utilize additional features within Hootsuite to manage multiple accounts, and each account has its team of users. In addition to this, the company also included powerful analytics functionality available to all its users. It is known as Social Analytics as it allowed users to customize reports and tracked the progress of campaigns. The company was founded by Ryan Holmes and launched formally in 2008. It is headquartered in Vancouver, Canada with having 140 employees. By the end of September 2012, the users of the company reached 4.5 million out of which 96% users are free, and only 4% are paid users.

Tasks done by Hootsuite:

The company is engaged in providing various forms of integration services. Services offered by the company include enterprise-class functionality, Intuitive user interfaces, tweet management tools, notification tools, a Twitter  search function, integration with other social other networks and other mobile application and analytical tools. The other main tasks in which the company is involved include spreading messages, monitoring the conversation and tracking the results of various activities.

Issues Identification:

Hootsuite is known to be one of the latest and rapidly growing company that is engage providing SaaS social media dashboards. Vice president of the business development department needs to analyze and evaluate the optimal strategy in terms of segmentation and monetization for all the company users. The company is facing the issue of determining the best strategy to monetize its user base without affecting its growth rate. Along with this, there is a high need for a company to bring a pricing plan that in turn creates revenues for the company as well.

Current market focus:

The growth of social media over the past few years had been driven popular sites such as Facebook, LinkedIn, Foursquare, Tumblr, YouTube, and Twitter. Facebook was rumored to be considering an IPO and Twitter had raised another $800 million in venture funding just a day before. There is the proliferation of social media tools. It means that with the help of social media tools, companies can devote more time to manage each account. In addition to this, Social media enabled users to manage more than one account at a time in a single control panel. Moreover, the basic purpose of these social media services is to provide all the users to make coordination in a social media participation in a proper manner.

Hootsuite Business Model:

Users of the company include free, pro-paid and enterprise paid. In addition to this, partnering platforms of the company include Facebook preferred developer, Linkedin certified developer program charter member, google+ development partner and Twitter promoted product partners. In addition to this, ad partners of the company include online advertisement agencies and mobile advertisement agencies. Moreover, the company gets funding from Blumberg capital, Hearst interactive media, social concepts and millennium technology ventures. See exhibit for the model.

Competitive Grid:

Table 1: Competitive Grid

Current marketing strategy and strategic focus:

The current focus of the company is on generating 100 million in revenues with a company value of $1 billion. In addition to this, the strategic focus of the company is also on rapid growth in the user base while generating and maintaining positive cash flows........................

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