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Case Title:

Cyworld, South Korea's Social Networking Site's Global Expansion Strategies

Publication Year : 2006

Authors: Vandana Singh, Amy Sonpal

Industry: Internet and e-commerce

Region:South Korea

Case Code: GRS0156A

Teaching Note: Available

Structured Assignment: Not Available

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Abstract:
Cyworld, a South Korean social networking site started its operation in 1999, since its inception it captured 40 per cent of the South Korean market. It started wooing the tech-savvy youth in United States in 2006. In South Korea, a world leader in broadband usage rate 96% of people in the 20 - 29 age groups were Cyworld members and in China, the site recorded nearly 3.5 million registered members since its launch in June 2005.

In 2005, Cyworld built its global strategy to deploy the Cyworld brand regionally and accordingly launched its services, first in China and then, Japan and Taiwan. After announcing its US expansion plans in October 2005, Cyworld officially launched its US version in August 2006.

Analysts were skeptical about the success of Cyworld in the US, especially with MySpace, a US based social networking site controlling the market. MySpace dominated the US social networking scene with about 123 million users and reinvented an internet culture since its inception in July, 2003. But as Cyworld was backed by the deep pockets of South Korea’s SK Telecom Co., it could carve out a lucrative spot in American market also.

The case describes Cyworld’s growth and expansion strategy, particularly in the US. It ends with a debate whether Cyworld can make a dent in MySpace dominated US social networking market.

Pedagogical Objectives:

  • To understand dynamics of the social networking business
  • To understand the global expansion strategy of social networking site
  • To study the growth strategies of Cyworld in US market
  • To understand the competitive scenario in social networking industry.

Keywords : Cyworld; SK Communications; Social networking site; Global expansion strategy; Demographic of US Social Networking Market; MySpace; Market-entry strategies; Culture-oriented market penetration; Localisation as global expansion tool; Privacy policies of social networking sites; Business model; Growth Strategies Case Study; Monetizing of social networking sites; Consumer behaviour; South Korean Market Leader; Major players in US Social Networking Sites (SNS) industry

Contents : 
About Cyworld
Cyworld Business Model
Cyworld Economy : Fact File
Cyworld Going Global
Social Networking Websites in US – A Market Scenario
MySpace in US – a Popular Culture
MySpace vs. Cyworld
Challenges for Cyworld
Percentage of Broadband Users
Major Milestones Of Cyworld

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