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Entrepreneurship Assignment: Case Study
Entrepreneurship Assignment: Case Study
Study
Name- Sayooj
Student id- 2101112039
Abstract of snapchat- The issue highlights the major decline in its user base of the US based
multimedia messaging platform I.e., Snapchat. This was after the redesign. This app is highly
popular for sharing temporary and one time view pictures known as “Snaps” and video
messaging and texting. It disrupted social platforms with its different and different features. But
between its continuous upsetting results, Snapchat realized the necessity to redesign their app to
make it user friendly and had the ability of re-disordered the social media platforms. But this got
them excessive amounts of criticism and the discontent and dissatisfaction of people was noticed
being voiced on various social media platforms. This issue of unpopular and improper redesign
affected them financially as well and led to a decline in snapchats stock value as well which
dropped its fame and demand on the social media platform. Even though the app snapchat was
not in any interest of changing its design again but due to its missing revenue and user growth
The issues-
The case has been structured to achieve the following teaching objectives:
In the second quarter of its earnings released on the 7th of august 2018, U.S.-based Snap inc.,
that is guardian company of the Snapchat said that the amount of the daily active users had come
down to 188 million from 191 million users which was in their previous quarter. this was their
first-ever quarterly drop since 2014in their number of users.
Spiegel attributed the drop “a slightly lower frequency of use among our user base due to the
disruption caused by our redesign.”
Snapchat which was originally named as Picabo which was an ephemeral photo-sharing app was
launched in 2011.
THE DISORDER-
Snapchat had the first mover benefit in the messaging industry and vertical video space was with
Snapchat the app showed the necessity of millennials to consume ethereal and authentic content
which took into account their intense need to not miss out on the happenings. The growing
popularity of Snapchat rooted from the fact that the shared content got deleted automatically
which provided the users a good privacy option without disturbing their communication in an
effective and entertaining way. Snapchat also had become the most popular social media app in
With the increasing popularity of Snapchat and its advantage of a coveted demographic, Mark
Zuckerberg the CEO of Face book had also extended a U.S. Dollar 3 billion buy-out offer to
Snapchat which was turned down by Spiegel in 2013. After the failure to buy Snapchat Facebook
launched app that was called Poke sending photos videos and ephemeral texts and also continued
to copy most of the popular features of the app such as the lenses and filters of Snapchat.
On the other hand, Instagram also blandly copied Snapchat's stories feature launching the
Instagram stories in august 2016. And in the time where Spiegel had spurned Mark Zuckerberg,
Facebook has turned Instagram into a photo sharing service for just 1 billion $ in 2012. This was
used as key growth driver and a Snapchat killer. Revenue growth was slowed down substantially
in the second quarter, the company said that it still faces an uphill battle after an app overhaul
meant to fend off a bigger rivalry Facebook Inc as it adds Snapchat-like features. In 2017,
snapchat had struggled a lot with the challenge of beating Instagram behind in the cold
competition that had been on since. With all the features being remarkably similar in both the
social media platforms, the designs became quite order winning to the people of the generation Z
and the millennials. The later ambush began when the app Instagram had launched drawing tools
and entertaining stickers and funny filters. The company also spent about 36 million dollars
approx. in the first sector as it moved from Venice, Calif., to their next office in the Santa
Monica, Calif., up from $21 million in expenses the previous sector.
SNAPCHAT REDISIGNING -
After these issues, Snapchat got to the realization to take drastic measures. the company decided
to take up the mission of redesigning of the app to specifically disrupt the social media platform
and boost its saddening revenue. More necessarily the company felt the importance to address
the issues by inexperienced users, especially those from the older generations as they found the
app hard to understand and use.
The CEO of Snapchat Even Spiegel acknowledged his user's disappointment and said “a change
this big to existing behavior comes with some disruption, especially given the high frequency of
daily engagement of our community.”
The goal of Snapchat’s newly designed app was to make it easier to use but as the updates were
rolled out Snapchat kept getting criticism that its new update and interface was difficult to use or
navigate. "I might start using Instagram Stories now," Ashley Vasquez who was 21-year-old
snapchat user told so. Other users of snapchat began sharing a workaround for reversing the
update by deleting the app and turning off automatic updates before redownloading it, but
Snapchat offer suggestions against it. “It is not clear to us why the app re-design - the first
product Snap ever tested at scale - was rolled out broadly, and we are even less clear on why it
hasn’t been more aggressively rolled back already,” Deutsche Bank analyst Lloyd Walmsley told
so. Snapchat said its cash by fell 13 percent from their previous quarter to $222 million. The
report of Facebook's interest in Snapchat came after a couple of weeks after Facebook, the
world's No. 1 Internet social multimedia platform, acknowledged that it was seeing a decrement
in daily use by young teenagers in the U.S., although it said overall use by teenagers was stable.
“Our redesign created some headwinds in our revenue this quarter by disrupting user behavior
and creating some apprehension among our advertising partners, "said the CEO of snapchat Evan
Spiegel. Users were extremely disappointed with the redesign and signed a petition against
snapchat so that it can be reversed back to the old format. Whilst many celebrities had also taken
up voices reverse this redesign. And the reverse action here shows that this was a mistake, a
stumble at a valuable time for the app. As Facebook continued to put on pressure onto the
company, and expectations of the investors remained high, the last thing Snap chat needed was a
thing like this. Snapchat had messed it all up jumbling messages and Stories, that banished all
creators to Discover and wrecking auto-advance. With pride of his gut instincts, Snapchat’s CEO
Evan Spiegel neglected to listen to all the awful user’s reviews and its declining usage. A
summarized study showed a 73 percent drop in snap chat's user sentiment toward Snapchat, the
app’s user count shrunk down in March and its share price went way down.
IMPACT-
Even though after the continuation of the growing concerns and the backlash over its redesign,
Spiegel stuck to his words about the changes in the app. “The redesign lays the foundation for the
future of both our communication products and our media platform, and we look forward to
Impression of snapchat among the users of US that fell off a cliff when the redesign was rolled
out in the early years.
In the middle of adverse reactions from a long time, snapchat users and entertainers to the app
redesign and the ascending doubts of analysts over the company’s future. And hence snapchat
after a lot of thoughts and processes considered going back to their old design. Evan Spiegel said
out that snap chat would make alterations to and tweak its redesign in the middle of “some
disruption” in snap chat's multimedia company. Snapchat told out that it is rolling out its new re-
redesign which is especially for iOS users that is far better than their redesigned version and less
confusing than their previous update. As per to The Verge, the updated version of Snapchat
redesign will put Snaps and chats back in chronological order, and moved the stories from your
friends back over to the right-hand side of the app. This is in context to the proceeding launched
new layout, which put all the content like Stories, snaps, and messages – from connections over
to the left side, with publisher and influencer content on the right. Snapchat began the work
algorithmically sorting out stories to show the one is from your favorite people and closest
friends first, rather than ranking them in a complete reverse chronology. TechCrunch had firmly
advocated for this algorithmic sorted out stuff back in April, as a similar step proved to
significantly boost engagement for Twitter and Instagram by making it easier to quickly get
Now the company had moved their stories made by the friends back to the side of snapchat that
also had media content. This change had aimed at removing the app’s unnecessary chat function.
The development of the mobile app was considered to be taken forward with boundaries being
pushed by the tech giants like snapchat and had believed that they have taken a bold step with
this move. As of Snapchat, the redesigning of the app was all about showcasing its strength and
hence its features an exposure and a chance to be utilized properly. The company had taken a
bigger step in the creation of professional content by expanding its ‘Discover’ feature that
allowed more content to show on user feeds. This feature did not only expand the content from
Snapchat’s content partners, but also from multiple verified celebrities as well. The content had
been reviewed by a team, before being launched up on ‘Discover’. It did not change in the way
of its functioning but just the way to use it. The app’s redesign was a massive improvement as it
had helped the app get a sleek and smooth functioning and performance which was appreciated
by the users later.
THE OUTCOME-
Snapchat had reverted most of their redesigned features and came up with their re re-designed
update which was very similar to their original version. Snapchat's efforts to increase their
celebrity statistics and celebrity metric transparency and peoples’ engagement initiated paid off
quite well. There was a progressive growth on its recent published user growth and quarterly
sales for the very first time after going public which had surpassed Wall Streets’s estimations.
Industrial experts like Daniel Ives who is the chief strategy officer at the GBH insights were
confident that the apps redesign would be necessary to dissolve the features that were steering
clear of older advertisers and demographics. In their new update snap chat gave their
inexperienced users media entertainment through various celebrities, social media influencers
and more analytical data to appeal the social media users and stars who had gone back to using
Instagram. The monetization of effort and time was made easier by making the data available to
the individual creators. “There is a lot of work ahead as we optimize the updated application, but
our early observations support the thesis behind the new architecture and the many growth
opportunities it provides.,” said the CEO Evan Spiegel. Snapchat had tried to draw the agencies
that used its advertising platform and there were several ways that helped them retain its
individuality. The success of Snapchat’s Redesign had depended on the content that is updated
on Discover Page and how it used the content for the advertiser’s benefit. Snapchat noted an
increment of 0.66% in technology stocks, that shows its confidence in the new app. The company
is expecting the user base to grow in coming months. The changes made by the company are
HINDERANCES FACED-
It had been just a year and half as a publicly trading company, and snapchat had already started
to lose many of its subscribers and user. It lost about 2 million users on a daily basis which was a
huge hinderance for the company to overcome in between their crises. Many executives of
snapchat had even said that customer base would shrink up to Q4 all the way from 186 million
daily users. Snapchat's younger audience which was the target audience had turned away from its
services. This affected their target audience and effected their marketing getting the company in
a worse state. It was also stated that all the entertaining stuff and their core market value was
sought of being copied by snap Chat's competitors. Thess features also did not work well in the
areas with poor internet connection. Spiegel and Snapchat were trying to work around these
technical challenges with a better version of its Android app, which was code-named as
“Mushroom,” but it became tough to foresee wide adoption if Snapchat’s “core product value”
had already been solved by something else. Snapchats plan of getting in and emerging in to more
markets and platforms became tough and risky. Snapchat’s popularity was affected when the
feature of “stories” which was originally a snapchat feature was featured on Instagram as well.
Many users moved on to Instagram which had become a down fall for Snap chat. Snapchat’s few
features were available only on iOS and not android when the two-third of the snapchat users
were android users and when Instagram launched similar features with better and same
convenience, due to this reason as well snap chat lost many of its users. Instagram had chosen to
blend the best of Snapchat’s features with its existing powerfully built platform. Snapchat even
said that “although our products work with Android mobile devices, we have prioritized
development of our products to operate with iOS.” but still the engineers did quite a work and led
to 20%V retention on the android users.
CONCLUSIONS-
Like every company snapchat too had its downfall and uphill. It was working all fine and
manageable until 2015and as it was something new and trendy which people actually liked. Later
after the unnecessary redesign of snapchat which was quite chaotic and confusing for the people
REFERENCES-
https://www.icmrindia.org/casestudies/catalogue/Marketing/Snapchat%20Failed
%20RedesignExcerpts.htm
industry once more. But the app had come in for excess criticism and discontent to their target
audience. The unfavorable overhaul had an impact on the business's finances and decreased
Snap's share value. Snap's CEO, Evan Spiegel, attributed the industry's failure to meet their
commercial as well as member key initiatives towards the makeover. Although Snap first
opposed updating its revamped pages, firm ultimately decided to do so in response to customer
complaints. It launched a refresh of its harshly criticized overhaul in May 2018, giving the well-
known app an appearance that is closer reminiscent of its vintage style. However, the change did
not significantly aid the business in regaining customers, and indeed the following essential
deficits fueled shareholders' concerns concerning Snap's market expansion.
This case depicts the managerial and financial methods and processes that the company snapchat
had adopted for eliminating their issues and their earning processes.
KEYWORDS FROM THE CASE AND NOTES- Disruptive marketer, platform, social
networking sites, competitiveness, social networking sites disruptor, digital marketing, product
innovation, and redesign, marketplace, lenses, upgrades, users, company, Spiegel, messaging,
platform, challenges, subscribers, investment, makeover, promotional activities.