Netscape's Initial Public Offering Case
1. What is Netscape’s strategy? What must be accomplished if it is to be highly successful going forward? How risky is its current competitive position? (1 points)
Netscape’s strategy: * Firstly, Netscape with its strategy “give away today and make money tomorrow” offered people the free access to its software in order to build a customer base as well as the foundation of entering the Internet market. * After paying Spyglass a one-time fee for the original Mosaic code, Netscape made its own and new brand to occupy a position in the new field. * To set a new standard, Netscape created a rival program (named Mozilla and then changed to Netscape Navigator) to destroy Mosaic. * After setting the new industry standard, Netscape focused on the Web browser market and sold server software to companies that wanted to enter the market and attract potential customers.
The multitude of competitors developed as well as Netscape. Thus, Netscape needs to make a more efficient plan to maintain its growth in the long-term. It should: * Have good performance in financial statement. According the exhibit 1, Netscape has incurred $4.7 million operating loss ended on June 30, 1995. Netscape should concern about its big loss and generate positive operating cash flows to maintain the development and growth. * Lower its costs. Also in the exhibit 1, the operating expenses are much higher than the sale revenue. Netscape should consider using advanced and more efficient method to reduce the R&D as well as sales and marketing expenses. * Make innovation and develop its new product line. Netscape should upgrade its current products in order to become superior among competitors. Developing new product line can help broaden the customers’ base as well as capture more market share.
Netscape’s competitive position was quite risky because: * Spyglass target on the code market as well as corporate market, which set up a strong competition with Netscape on
Netscape’s strategy: * Firstly, Netscape with its strategy “give away today and make money tomorrow” offered people the free access to its software in order to build a customer base as well as the foundation of entering the Internet market. * After paying Spyglass a one-time fee for the original Mosaic code, Netscape made its own and new brand to occupy a position in the new field. * To set a new standard, Netscape created a rival program (named Mozilla and then changed to Netscape Navigator) to destroy Mosaic. * After setting the new industry standard, Netscape focused on the Web browser market and sold server software to companies that wanted to enter the market and attract potential customers.
The multitude of competitors developed as well as Netscape. Thus, Netscape needs to make a more efficient plan to maintain its growth in the long-term. It should: * Have good performance in financial statement. According the exhibit 1, Netscape has incurred $4.7 million operating loss ended on June 30, 1995. Netscape should concern about its big loss and generate positive operating cash flows to maintain the development and growth. * Lower its costs. Also in the exhibit 1, the operating expenses are much higher than the sale revenue. Netscape should consider using advanced and more efficient method to reduce the R&D as well as sales and marketing expenses. * Make innovation and develop its new product line. Netscape should upgrade its current products in order to become superior among competitors. Developing new product line can help broaden the customers’ base as well as capture more market share.
Netscape’s competitive position was quite risky because: * Spyglass target on the code market as well as corporate market, which set up a strong competition with Netscape on