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Dropbox: It Just Works – Case Solution

Dropbox was founded in April 2007 by Drew Houston who is also its current CEO. Dropbox is an application that allows users to sync, share, and store their files in one place over the cloud. Their services consist of free and paid premium offers. By having your protected files on the internet, it allows user to access and upload their files on multiple smartphones or personal computers.

​Thomas R. Eisenmann; Michael Pao; Lauren Barley Harvard Business Review ( 811065-PDF-ENG ) January 19, 2011

Case questions answered:

Case study questions answered in the first solution:

• What are the issues in the case?
• What analysis do you have to back it up?
• What are your recommendations for the issues?

Case study questions answered in the second and third solutions:

• Dropbox is not the first mover in the file sharing and storage space. What opportunities did the founder see here? What are the key elements of Dropbox’s business model (i.e., target customers, value propositions, etc.)?
• Is Dropbox profitable as of June 2010? Evaluate their financial model and profitability forecast for the future.
• When he applied to Y-Combinator, what hypotheses did the founder hold about the key elements of Dropbox’s business model? As of June 2010, which of these hypotheses have been confirmed, and which ones have been discarded? Evaluate the hypothesis tests. Suggest improvements (if any) you would make to their testing process.

Not the questions you were looking for? Submit your own questions & get answers .

Dropbox: 'It Just Works Case Answers

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Background – Dropbox, Inc.

Dropbox, Inc. was founded in April 2007 by Drew Houston, who is also the current CEO. Dropbox is an application that allows users to sync, share, and store their files in one place over the cloud. Their services consist of free and paid premium offers.

Having your protected files on the internet allows users to access and upload their files on multiple smartphones or personal computers.

This case takes place from the creation of Dropbox in 2007 to mid-2010, and the key players, in this case, involve Drew Houston, his partner, Arash Ferdowski, and the consumers. Houston recruited MIT dropout Ferdowski to help out with the early stages of Dropbox and later became a co-founder and CTO. The start-up was backed by the Sequoia Capital venture at the time.

The main issue of this San Francisco-based start-up was how to come out on top amongst the other leading applications in the industry as they came in as a new entrant. Other issues included hiring the right people to create a sustainable and well-performing workforce that did well in the business aspect.

Dropbox also had some problems with keeping its product user-friendly while catering to feature requests. The fourth issue involved their marketing strategy and promotional offers – how is Dropbox going to attract and acquire new customers and convert those free users into paying customers?

The market for their single product version was consumers and businesses, but they wondered about creating a strategy that segmented their user base by creating different versions or separate products.

Dropbox was growing quickly as it gained 2 million users one month after launching its mobile phone application. This meant that Dropbox needed to keep up with its quick growth to remain on top.

They started listening to their users to make strategic decisions on target enterprise customers, user-desired product features, and distribution deals with mobile phone manufacturers.

1. Eisenmann, Pao, and Barley (2011) wrote, “The online backup and data storage services space remained fragmented and fiercely competitive in 2010. This issue refers to the tough competition against rivals like Carbonite and Mozy in a red ocean situation where Dropbox was a new entrant.

The founders knew that current solutions existed like theirs and that they were late entrants in the competitive industry. The backup and storage field was fierce, and their competitors launched their products in the 1990s.

If Dropbox were to stand out from this crowd of successful services, it would have to come up with a…

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Dropbox: 'It Just Works'

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Dropbox: 'it just works' description.

Dropbox is a venture-backed Silicon Valley startup, founded in 2006, that provides online storage and backup services to millions of customers using a "freemium" (free + premium offers) business model. The case recounts Dropbox's history from conception through mid-2010, when founder/CEO Drew Houston must make strategic decisions about new product features, how to target enterprise customers, and whether to pursue distribution deals with smartphone manufacturers.

Case Description Dropbox: 'It Just Works'

Strategic managment tools used in case study analysis of dropbox: 'it just works', step 1. problem identification in dropbox: 'it just works' case study, step 2. external environment analysis - pestel / pest / step analysis of dropbox: 'it just works' case study, step 3. industry specific / porter five forces analysis of dropbox: 'it just works' case study, step 4. evaluating alternatives / swot analysis of dropbox: 'it just works' case study, step 5. porter value chain analysis / vrio / vrin analysis dropbox: 'it just works' case study, step 6. recommendations dropbox: 'it just works' case study, step 7. basis of recommendations for dropbox: 'it just works' case study, quality & on time delivery.

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Case Analysis of Dropbox: 'It Just Works'

Dropbox: 'It Just Works' is a Harvard Business (HBR) Case Study on Innovation & Entrepreneurship , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Dropbox: 'It Just Works' is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Dropbox: 'It Just Works' case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Dropbox: 'It Just Works' will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Dropbox: 'It Just Works' case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Innovation & Entrepreneurship, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Dropbox: 'It Just Works', is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Dropbox: 'It Just Works' case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Innovation & Entrepreneurship Solutions

In the Texas Business School, Dropbox: 'It Just Works' case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Dropbox: 'It Just Works'

Step 1 – Problem Identification of Dropbox: 'It Just Works' - Harvard Business School Case Study

The first step to solve HBR Dropbox: 'It Just Works' case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Dropbox Dropbox's is facing right now. Even though the problem statement is essentially – “Innovation & Entrepreneurship” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Dropbox Dropbox's, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Dropbox: 'It Just Works'. The external environment analysis of Dropbox: 'It Just Works' will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Dropbox: 'It Just Works' case study. PESTEL analysis of " Dropbox: 'It Just Works'" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Dropbox: 'It Just Works' macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Dropbox: 'It Just Works'

To do comprehensive PESTEL analysis of case study – Dropbox: 'It Just Works' , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Dropbox: 'It Just Works'

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Dropbox: 'It Just Works' ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Dropbox Dropbox's is operating, firms are required to store customer data within the premises of the country. Dropbox Dropbox's needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Dropbox: 'It Just Works' has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Dropbox Dropbox's in case study Dropbox: 'It Just Works'" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Dropbox Dropbox's in case study “ Dropbox: 'It Just Works' ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Dropbox Dropbox's in case study “ Dropbox: 'It Just Works' ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Dropbox: 'It Just Works' ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Dropbox Dropbox's can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Dropbox: 'It Just Works' case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Dropbox Dropbox's needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Dropbox: 'It Just Works'

Social factors that impact dropbox: 'it just works', technological factors that impact dropbox: 'it just works', environmental factors that impact dropbox: 'it just works', legal factors that impact dropbox: 'it just works', step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: dropbox: 'it just works' case study solution.

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Dropbox: 'It Just Works'

• Format: Print
• | Language: English
• | Pages: 22

About The Author

Thomas R. Eisenmann

Related work.

• Faculty Research
• Dropbox: 'It Just Works'  By: Thomas R. Eisenmann, Michael Pao and Lauren Barley

Dropbox: It Just Works Case Solution & Answer

Home » Case Study Analysis Solutions » Dropbox: It Just Works

Dropbox is a Silicon Valley startup venture capital, founded in 2006, which enables online storage and backup services to millions of customers with a “freemium” (free + offers premium) for modeling business. The case tells the story of Dropbox, design until mid-2010 when the founder / CEO Drew Houston has to make strategic decisions about new product features, how to target customers of the company, and the opportunity to pursue distribution agreements with manufacturers of smartphones. by Thomas R. Eisenmann, Michael Pao Lauren Barley Source: HBS Premier Case Collection 22 pages. Date Posted: January 19, 2011. Prod #: 811065-PDF-ENG Dropbox: “It just works” Case Solution

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• Dropbox: 'It Just Works'
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Introduction to Porter Five Forces

Emba pro porter five forces solution for dropbox: 'it just works' case study.

Dropbox is a venture-backed Silicon Valley startup, founded in 2006, that provides online storage and backup services to millions of customers using a "freemium" (free + premium offers) business model. The case recounts Dropbox's history from conception through mid-2010, when founder/CEO Drew Houston must make strategic decisions about new product features, how to target enterprise customers, and whether to pursue distribution deals with smartphone manufacturers.

Case Authors : Thomas R. Eisenmann, Michael Pao, Lauren Barley

Topic : innovation & entrepreneurship, related areas : entrepreneurship, growth strategy, internet, marketing, product development, emba pro porter five forces analysis approach for dropbox: 'it just works'.

At EMBA PRO , we provide corporate level professional Marketing Mix and Marketing Strategy solutions. Dropbox: 'It Just Works' case study is a Harvard Business School (HBR) case study written by Thomas R. Eisenmann, Michael Pao, Lauren Barley. The Dropbox: 'It Just Works' (referred as “Dropbox Dropbox's” from here on) case study provides evaluation & decision scenario in field of Innovation & Entrepreneurship. It also touches upon business topics such as - Marketing Mix, Product, Price, Place, Promotion, 4P, Entrepreneurship, Growth strategy, Internet, Marketing, Product development. Our immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Innovation & Entrepreneurship field, company, context, collaborators, competitors, customers, Marketing Mix factors, Products related decisions, pricing strategies and more.

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First published in 1979, “How Competitive Forces Shape Strategy” by Michael E. Porter, revolutionized the field of strategy. Popularly known as “Porter’s Five Forces” - not only influenced a generation of academic research but also provided a map to rigorously analyze the competitive forces.

Porter Five Forces that Determine Industry Structure

Porter Five Forces model is heavily borrowed from the traditional field of micro economics. The five forces that determine the industry structure of organization in casename case study are -

1. Threat of substitute products and services - If the threat of substitute is high then Dropbox Dropbox's has to either continuously invest into R&D or it risks losing out to disruptors in the industry.

2. Rivalry among existing players – If competition is intense then it becomes difficult for existing players such as Dropbox Dropbox's to earn sustainable profits.

3. Threat of new entrants - if there is strong threat of new entrants then current players will be willing to earn less profits to reduce the threats.

4. Bargaining power of buyers of Dropbox Dropbox's – If the buyers have strong bargaining power then they usually tend to drive price down thus limiting the potential of the Dropbox Dropbox's to earn sustainable profits.

5. Bargaining power of suppliers of Dropbox Dropbox's - If suppliers have strong bargaining power then they will extract higher price from the Dropbox Dropbox's.

Why Porter's five forces analysis is important for casestudyname?

You can use Porter Five Forces model to analyze the competitiveness faced by protagonist in casestudy. Porter five forces analysis of casename case study will help you in understanding and providing solution to – nature & level of competition, and how Dropbox Dropbox's can cope with competition. Even though from outside various industries seem extremely different but analyzed closely these five forces determines the drivers of profitability in each industry. You can use Porter Five Forces to understand key drivers of profitability of Dropbox Dropbox's in casename case study.

Porter’s 5 Forces, Competitive Forces & Industry Analysis

The core objective of strategists and leaders in an organization is to help the organization to build a sustainable competitive advantage and thwart competitive challenges. Step 1 – Defining relevant industry for Dropbox Dropbox's in casestudy Step 2 – Identify the competitors and group them based on the segments within the industry Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. Step 4 - Determine overall industry structure and test analysis of consistency Step 5 – Analyze recent and future changes in each forces Step 6 – Identify aspects of industry structure based on Porter 5 Forces that might be influenced by competitors and new entrants.

How is Porter's five forces framework used in developing strategies?

To achieve above average profits compare to other industry players in the long run, Dropbox Dropbox's needs to develop a sustainable competitive advantage. Industry analysis using Porter Five Forces can help Dropbox Dropbox's in casename case study to map the various forces and identify spaces where Dropbox Dropbox's can position itself. By doing Industry analysis using Porter Five Forces, Dropbox: 'It Just Works' can develop four generic competitive strategies.

The four generic competitive strategies that can be pursued in casename case study are -

Cost leadership.

In cost leadership, Dropbox: 'It Just Works' can set out to become the low cost producer in its industry. How it can become cost leader varies based on the industry forces and structure. In pursuing cost leadership strategy, Dropbox Dropbox's can assess – (pursuit of economies of scale, proprietary technology, supply chain management options, diversification of suppliers, preferential access to raw materials) and other factors.  

Differentiation

Dropbox Dropbox's can also pursue differentiation strategy based on the industry forces description in casename case study. In a differentiation strategy Dropbox Dropbox's can seek to be unique in its industry by providing a value proposition that is cherished by buyers. Dropbox Dropbox's can select one or more attributes that  can uniquely position it in the eyes of the customers for a specific needs. The goal is to seek premium price because of differentiation and uniqueness of the offering. Industry analysis using Porter Five Forces can help Dropbox Dropbox's to avoid spaces that are already over populated by the competitors.

Focus - Cost Focus & Differentiation Focus

The generic strategy of Focus rests on the choice of competitive scope within an industry. Dropbox Dropbox's can select a segment or group of segment and tailor its strategy to only serve it.  Most organization follows one variant of focus strategy in real world.

The Focus Strategy has two variants.

(a) In cost focus a Dropbox: 'It Just Works' can seek a cost advantage in its choses segment in casecategory. (b) In Differentiation strategy Dropbox: 'It Just Works' can differentiate itself in a target segment in its industry. Both variants of the focus strategy rest on differences between a Dropbox: 'It Just Works' ’s target segment and other segments in the industry.

5C Marketing Analysis of Dropbox: 'It Just Works'

4p marketing analysis of dropbox: 'it just works', porter five forces analysis and solution of dropbox: 'it just works', porter value chain analysis and solution of dropbox: 'it just works', case memo & recommendation memo of dropbox: 'it just works', blue ocean analysis and solution of dropbox: 'it just works', marketing strategy and analysis dropbox: 'it just works', vrio /vrin analysis & solution of dropbox: 'it just works', pestel / step / pest analysis of dropbox: 'it just works', case study solution of dropbox: 'it just works', swot analysis and solution of dropbox: 'it just works', references & further readings.

M. E. Porter , Competitive Strategy(New York: Free Press, 1980) Thomas R. Eisenmann, Michael Pao, Lauren Barley (2018) , "Dropbox: 'It Just Works' Harvard Business Review Case Study. Published by HBR Publications. O. E. Williamson , Markets and Hierarchies(New York: Free Press, 1975)

Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications.

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