Author(s): KIM, W. Chan, MAUBORGNE, Renée, LING, Katrina, LEE, Jee-Eun
This case illustrates the experience of an avid Skype user who leverages Skype’s voice and video offerings interchangeably for business and personal communication. This combined voice and video offering gives Skype users much higher value at lower cost than alternatives such as long-distance calling, which is not video-enabled, room-based video conferencing, which has a high set-up cost, and business and leisure travel, which have their own associated costs and hassles.
The case illustrates the disconnect between Skype’s bifurcated pricing strategy, which is based on business versus leisure use, when those boundaries do not necessarily exist in the minds of Skype users.
This paper case and the accompanying case exercises prepare the participants for an engaging class discussion on what constitutes Skype’s unprecedented voice and video offering, addressing the issue of how one could set a strategic price even though there appears to be no seeming precedents for such an offering.