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 Strategic and Tactical Tools – Home assignment – Foursquare 
Mandatory – CBUSO1100C – Group 17 
MIKKEL STYBE, JESPER STEFFENSEN, ALEX BJØRSTORP & MARTIN OLSEN 
01-12-17 
1.0 How is foursquare helping people interact with each other? 
Foursquare is an application that allows you to do location-based check-ins at places and thereby letting your peers know where you are and what you are doing. The purpose is social engagement by applying gamification to the user’s’ every day. 
When a user checks in friends connected to the user can see where the user has been. Foursquare integrated different functions into the application to keep users engaged with the application and the community. Those features where as a start tips and to-dos, allowing users to share tips on what and where to visit and create lists of where to go, to be shared with others. 
Besides the basic functions Foursquare implemented a leaderboard. Users receive points for visiting places, five points for checking in for the first time at a location and one point for returning to a location and checking in. By adding the leaderboard, they added competition and thereby more interaction between the users. At each location they added a “mayor” title you would earn by having the most points at a location. Users will interact and compete to earn and keep this title, adding encouragement for users to both use the application and check-in as much as possible. 
The last aspect of Foursquares way of having people interact with each other is the possibility to earn badges and titles, which is again a competitive way of gamifying people’s lives. Earning badges and titles lets users share and tell others about them, encouraging to earn the badges themselves. The other way around, hearing about a badge or a title will for some, possibly most, users trigger their competitive side and make them want to earn the same badges and titles as others have acquired. 
1.1 How is foursquare helping businesses interact with its customers? 
While Foursquare is helping people interact with each other, they are also helping businesses interact with their customers. They have created specials, venue promotions, which allowed businesses to offer deals, coupons or similar discount bonuses to customers checking in at their location. Doing so, businesses participating with Foursquare would get customers engaged in checking in at their location. Thereby, making the businesses more attractive to customers. 
Another big part of Foursquare helping businesses is their custom badges. Their collaboration with TV venues had several hundred businesses get special badges as they were a part of a TV show or other content from the TV venue. As these custom badges were also Foursquares only feature generating revenue, it was a great addition to the service, both for Foursquare, their customers and participating businesses. Altogether, everyone got something out of the feature. 
Foursquare still had their specials feature free of charge, which made it even easier for businesses to participate and thereby creating free advertisement for Foursquare. The more businesses using the feature, the more people would want to have the application in order to get deals and discounts. 
2.0 What explains foursquare’s growth to date? 
The initial high user-base of foursquare can be explained by looking at the release date of the app and the user-inclusion. 
Crowley and Selvadurai had the advantage of advanced experience within the field. Especially Crowley as he was a co-founder of the app Dodgeball which in crude terms was a similar location-based service. Crowley knew what to do and what not to do, from his experience with Google and Dodgeball. 
The two founders choose strategically to release foursquare at a very specific time, it culminated with the annual South by South West(SXSW) Interactive festival. Furthermore, they released it shortly after Dodgeball was terminated which resulted in a large number of early adopters. The userbase of dodgeball wanted a similar app and through the SXSW they gained a large crowd and publicity. The app was even named “breakout of SXSW”. 
Additionally, the team were first movers in the field of location-based services. Which ensures low competition 
They decided to launch a product that was reasonably complete with many features but needed programming polish, instead of cutting features. All the way through the app development and organizational scaling it has been a user-driven and focused product. The team focuses on making the app desirable for the user and including features the users want instead of monetizing. Furthermore, another of the strengths of the team is them being active on social media and responding to feedback, making a sort of relationship with the user-base which also enabled them to understand the userbase better and the range of it and variety and their needs. 
Crowley and Selvadurai tactically exploited the press and media coverage to increase their userbase. Their release at SXSW, as mentioned, created a fuss about the app. Furthermore, the team smartly created deals with a variety of big organizations which involved foursquare creating customs badges for the organizations and in return they gained publicity. Bravo’s popular tv shows, VH1, and MTV all partnered up with foursquare. Zagat, a popular restaurant-reviewing service, also teamed up with foursquare. 
The team was also exploiting new market opportunities by hitting a peak of growing popularity of smartphones, capitalizing on it by developing the app to all mobile platforms. 
Lastly, we believe a part of Foursquare’s success is down to the fact that they hit an audience of students and young professionals spot on, by being new technology and the app offering discount in stores and more, which caters to these two specific groups. 
3.0 Why did foursquare invest so much in developing search functionalities, but yet has done so little to ensure that the platform has a wide breadth of users, or to encourage its users to check in? 
This is a rather large question, so let’s start by splitting the question up in three parts that each focus on the three different parts of the question. 
3.1 Why did foursquare invest so much in developing search functionalities? 
In the start-up period for Foursquare, the percentage of smartphones on the US market (Foursquare’s launch market) of total mobile phone subscribers was low at 7%, yet rose to 17% by 20091. This paved the way for launching smartphone location-based service applications such as Foursquare. 
1 Case – Exhibit 6 
2 Case – Exhibit 7 
3 BIA/Kelsey Mobile Market View – Survey from Case 
4 Case P. 3 
If we look at mobile content activities among U.S mobile phone users between September 2007 and October 20092, we can see some clear trends among the activities on mobile devices. Searching the internet for local products or services, getting information about movies or other entertainment and getting information about restaurants or bars all saw a relative large growth. Searching local products/services rose from 9.8% to 18.5%, gathering information about entertainment grew from 8.2% to 15.9% and gathering information about bars/restaurants grew from 9.0% to 13.3%. This was a relative large amount of growth as most users of mobile devices at that time only used their phones for calling and texting and only 21% had more than 10 internet accesses per week by October 2009 and that was after a significant growth period3. 
The growth in smartphones on the U.S market and the growth in the trends for searching for local information, almost matches. This shows that there was a market for an application such as Foursquare that combines the ease of using a smartphone application and the demand for finding local information about products/services and entertainment. To create a successful application that matches the trends it would be paramount to have two important features. A database with geolocations for each for the cities that the application was present in that allows the application to have information about key venues (such as restaurants, bars, parks, museums, gyms) and search functionalities to allow the user to find the venues that they need and allow companies to engage in conversations with relevant customers. 
It was possible for Foursquare to license the geolocation data from already established companies (Localeze, InfoUSA) and open source initiative (GeoCommons) that already provided such data to GPS device makers and other location-based services4. Therefore, many of their in-house engineers could focus on search 
functionalities, as it was important that the users found relevant results when using the application. There were many parameters that could change depending on factors such as time of day, user input, Specials, and location. By creating a great location based search engine in the application it also allows Foursquare to utilize local-based marketing5, such as6: 
5 E-commerce 2017 – business. technology. society. – 13th edition – Kenneth C. Laudon & Carol G. Traver P. 515 
6 E-commerce 2017 – business. technology. society. – 13th edition – Kenneth C. Laudon & Carol G. Traver P. 521 
7 Case P. 4 
8 Case P. 3 
9 Case – Exhibit 3 

• proximity marketing 
• in-store messaging 
• location-based app messaging 
• social network marketing based on user’s location 
• geo-social service marketing 
• location-based services marketing 

3.2 But yet has done so little to ensure that the platform has a wide breadth of users? 
Foursquare had many different users that used the application in different ways. For some it was more about the social aspect of going out, other used it for the promotion related to the check-ins, some used it for getting motivation to go to the gym and workout and other wanted to be the user with most points. And according to Crowley “We quickly expanded to cover as many smartphones as possible… You want all of your friends to participate, not just the six that have the right phone”7. This indicates that there focus was on gathering a wide breadth of users. 
However, Foursquare geographical market was very small. At the public launch they launch in about 30 major U.S cities8, by late 2009 Foursquare had expanded to 100 major cities worldwide. A major reason for Foursquare to focus on major cities in the start was the fact that there are more early-adaptors in these areas that actual have a smartphone to utilize the application. The most important reason was however, that the users located in major cities like NYC/SF had almost twice as much activity as the average user. The average user had around 9 nights out and 24 check-ins, while the users located in NYC/SF had 18 nights out and 45 check-ins9. This showed Foursquare that there was a larger potential in the users located in major cities around the world and therefore it would be best to focus on the growth in markets with the most active and loyal users. 
3.3 Or to encourage its users to check in? 
Check-ins was a very popular feature for the users as it allowed for gamification, badges, specials and introduced a social aspect to the application. It also allowed potential business partners (venues) to acquire 
new customers, to generate engagement with customers, amplification using the social aspect of the application and to create communities10. 
10 E-commerce 2017 – business. technology. society. – 13th edition – Kenneth C. Laudon & Carol G. Traver P. 473 
11 Case P. 9 
However, for foursquare the check-ins where something that proved hard to monetize. Even though it was an important feature to the users and their potential business partners. The system of check-ins proved to be very insecure and Foursquare would like to not be in a position where a scammer creates a false Special (reward for check-in) and cheats the system. This was due to problem of creating an automatic system to verify the Specials created. However, foursquare found a way to monetize an extension of the check-in system by providing business partners special badges for check-in in their location and they have it in the pipeline create an feature that utilize historical check-ins and then creates suggestions to users based on that data. 
Another problem was users that cheated the gamification system by just checking into many locations every day by walking past them. Foursquare could not just remove the features as it was important to potential business partners and according to Selvadurai “You can’t roll something out and later take it back. User will revolt..”11. 
4.0 What should foursquare do next to compete with other social media platforms? What can we learn from the foursquare case in terms of building a successful social media platform? 
4.0.1 Business model 
The most important thing for foursquare is to develop a sustainable business model. Foursquare can’t compete with the other social medias if they over time can’t generate any revenue. Foursquare have been successful in their fundraising, but their investors will at some point want to see that their investment have been successful. We believe Foursquare was right when they wanted to build the whole app and offer it for free first and then consider the other challenges like user experience and revenue model. It allowed them to build a huge user base that now uses the app and like it. If they needed to generate revenue from the start they might have had to compromise some of the things people liked about the app and maybe lost some of the user before they have started using the app. 
With the huge user base, Foursquare can now start think about how to earn money. They could do an advertising model showing ads on the app, transaction fee model charging companies to be on top of search list or being pushed to the user or a subscription model, where subscribers can get access to features and content that is not accessible for freemium users. 
4.0.2 Trending/influencer 
Today social medias have a lot of influencers that tries to help us make a purchase decision. We believe in a feature where you can follow influencers, that knows the city very well, or celebs, to see where they go get their coffee, eat dinner or drink drinks would be an appreciated feature. The downside of this is that it can be a bit expensive. 
Furthermore, do we believe that a feature displaying what is trending right now, would be a good idea. It should work a bit like on Twitter, where trending topics a highlighted. Ex if a lot of people in the morning are checking in to the same coffee shop it will trend and be highlighted or if a lot of people are going to a nightclub, it could trend if a lot of people checked in. Hopefully this will encourage the companies to make the best specials/deals for the user so they can be highlighted. 
These features will also help the lazy user or the users that are new to a city to find out where they should go. 
4.0.3 Big data for better User Experience 
Foursquare can collect a huge amount of data from their users and by using this data in a proper way, Foursquare can improve the whole experience for the users. 
With this huge amount of data Foursquare can make decisions in real time, they don’t have to wait a month for the data to be analyzed. When a user enters, Foursquare and looks for a restaurant foursquare can see where you have been before and then recommend a place like that. (cuisine, taste, price level and location) 
With the data, Foursquare can also see how people are using the app, interacting and browsing, this data can help to improve if people are doing anything wrong, where they are doing it and how to solve it. 
4.0.4 Augmented/virtual reality 
AR and VR are getting more and more popular and why not use this as an advantage. Foursquare could show how the restaurant looks like in 360-degree photo to see if it looks nice before you go there, or you could follow a guide in AR to the place you want to go like a GPS. 
Only fantasy sets the barrier for limits of AR and VR and Foursquare could also adopt it to their gamification part. 
4.1 What can we learn from the foursquare case in terms of building a successful social media platform? 
4.1.1 Gamification 
Foursquare have been very successful in their gamification. With gamification, you can encourage your users and merchants to improve or keep using the app. Gamification can reward you for the right behavior on the app. For Foursquare they wanted to use gamification for two things: 
– Teach user to use Foursquare right 
– Make the real-life experience more fun 
We believe they succeeded with this strategy. 
4.1.2 Specials and discounts 
Everybody likes when something is free or we get a discount. Being the link between the merchants and the customers was a good way to gain more user. With Foursquare you had all the specials by your hand, which made it easier to find the desired special. 
4.1.3 Twitter and response media 
Foursquare was very distinct on social media and they allocated a lot of time to listen what the user had to say both good and bad. The feedback gave Foursquare a chance to improve what didn’t work but also know what people liked. 
This engagement in the users and their feed improved the engagement from the user, because everybody got an answer and felt like they were being heard and had something to say.