Q-1:

Vision:

Dropbox was a later mover in File hosting service, but it created a niche space through which
it increased its market share. All other File hosting never had an option of fast and fluent
synchronization service. Drew Houston therefore had the team to develop prototype, which
permitted instantly synchronization for files of any type or size. They later further explained
their emphasis on ease-of use and reliability.

Target market:

Dropbox targeted the mass customers, then targeting the early adopters. They increased their
presence based on the referral program in which the user had to have Dropbox if he had to
download the file. Based on its past experience, this method is more effective than other kinds
of advertisement. In addition, one of their niches is that users can share files and works across
multiple PC platforms. They also utilize the demand of people to share files with friends to
spread the product information and used Amazon’s storage service to eliminate need for huge
infrastructure. Generally, Dropbox Target Professions working in IT industry

Pricing strategy :

Houston proposed using a freemium business model that offered both free and premium (i.e.,
subscription) accounts. Initially, he planned to give away 1 gigabyte (GB) accounts for free
and charge for additional storage, perhaps by offering an individual user 10 GB of storage for
$5 per month.

Value proposition:

Auto Synchronization service

Back of data through online

Document backup on system.

Q-2:
Analysts estimated that 2% to 3% of Dropbox’s users were paying customers, which implied
a $10 million to $15 million annual revenue in 2010. Thus, considering the average we get
12.5 million.
As per April 2010 the number of users who registered for Dropbox is 4 million for per paid
user space it was offered for 3.18 USD and for the free users it is around 0.11 USD.
Revenue was approximately 10 million to 15 million thus considering the average we get 12.5
million.
Revenue per customer 12,500,000/1, 00,000=125 USD
revenue per customer Number of free customers 40,00,000-1,00,000= 39,00,000,
Cost for free users 39,00,000*0.11=4,29,000
paid users 1,00,000*3.18= 3,18,000 cost for paid users.
Overall cost= 4, 29,000+3, 18,000= 7, 47,000 USD.
Net income 1, 25, 00,000-7, 47,000=1, 17, 53,000
Q-3:
The Dropbox business model is the ease of using the product. Compared to the other product
Dropbox had a superior advantage, since there were already other competitors in same space.
Dropbox worked dealt with complex operations in a simple way. Also, the targeting strategies
of Dropbox of using the correct customer was another brilliant principle. Another important
section was the release of a single version for all users, targeted specifically at individuals.
This allowed the company to expand by a “Trojan horse” strategy of targeting users to then
enter into the B2B market automatically. This strategy could also have been supported by
AdWords and partnerships with big distribution channels. The revenue generation of Dropbox
was based on the freemium model, customers can use the Dropbox for free and later on they
can upgrade for a fee.

Q-4:
As we know that Google have a huge mass customer-based world wild.

Google came up with comparable of strategy, which offered free storage space but
concerning the premium subscription Google offered at an attractive price than Dropbox. For
instance, customer who has 100GB plan with Google and Drop box, customer used to pay
1.99 $ a month compared to 9.99 $ a month for Dropbox. This is best way to compete with
Dropbox, as we know that customer opt for the lower price if the quality of the service is
equal also Google has superior capital and design team than Dropbox which can interrupt the
Dropbox business model.

In addition, Google could give more free data space and with their superior design team and
market share they can come up with new features which similar to how Dropbox had created.
However, Dropbox came with a brilliant strategy of giving 1 TB space for 10$ because the
price is aspect which would attract the customers.

Q-5:

Houston should concentrate on the existing business model instead of launching a new
version for SMB business but it may add some features for SMB to attract them. Since
already Dropbox has a very good existing customer-base and the number of customers is
around 4 million by end of April 2010.