social networking venture

Scenerio:

The online social networking industry is growing rapidly with a variety of both personal and business oriented applications emerging tapping into the global marketplace. Some of the major applications include Facebook, Myspace and LinkedIn.
There are also many niche applications popping up, such as those targeting a specific geographic region (e.g. Cyworld in Asia), industry (e.g. the Accounting Network) or customer group (e.g. PartnerUp for entrepreneurs).

Abby Hunter, a former high school classmate, recently approached you with a new social networking website that she has designed. She is excited about the possibility of entering the industry and taking advantage of the growing demand for social networking. Yet, although Abby has an extensive technical background and the ability to build most any feature into her website, she is unsure of what strategic direction to take it. For instance, should she focus in on a specific niche or keep it more mainstream? What features should she add? What clientele should she market the website to and how can she best reach them? How should she approach pricing? How can she best compete?

Given your background and management expertise that you've built from your MBA class work, Abby would like to offer you a share of the ownership in exchange for helping develop and implement a strategic plan to get the new venture off the ground. This involves presenting the plan to a group of venture capitalists in order to obtain funding to launch the website

Assignment:

Critique and prepare a set of recommendations regarding the many different strategic options that the business could take to position itself in the marketplace, including the following:

? Cost Leadership strategy

I would specifically like to know how each strategy could be employed to create and sustain a competitive advantage, followed by a critique of the pros and cons of this choice. Lastly, given the full set of critiques, I would like your recommendation as to which strategy or set of strategies to pursue.

Task

Discuss how the new venture could potentially enter the marketplace through this strategic approach to create and sustain a competitive advantage. For example, in the case of a differentiation strategy, recommendations as to higher pricing, features, and the clientele base of the social network application would likely be discussed. This would be followed by a critique of the pros and cons of the strategic approach.

Apply what you have learned from conducting your industry analysis and resource assessment in developing the details of the strategic approach. Where you do not have sufficient background information from the case study, you may make assumptions as long as they are stated and supported.