Neopets Case Analysis Essay Example

the bargaining power of buyers and suppliers. In this scenario, the buyers consist of Neopets users and advertisers while the suppliers include manufacturers of Neopets merchandise (like plush toys and t-shirts) as well as hardware suppliers (such as servers and bandwidth providers). The bargaining power of buyers can be considered moderate since customers have significant influence due to low switching costs but heavy reliance on web traffic, similar to other websites.

Firstly, in this context, I believe "buyers" refers to Neopets users and advertisers. On the other hand, "suppliers" refer to manufacturers of Neopets merchandise (such as plush toys and t-shirts) as well as hardware providers (including servers and bandwidth). Users/buyers possess moderate bargaining power since they have various alternatives among websites with low switching costs that heavily rely on web traffic.

Despite the large number of users and their generally younger age, Neopets holds the advantage. With its highly targeted and effective advertising platform, Neopets possesses considerable power. On the other hand, apparel manufacturers have very little bargaining power as suppliers.

Neopets’ users are indifferent to the manufacturer of goods, and Neopets has significant orders to fulfill. Hardware suppliers have low bargaining power as Neopets serves a large number of users and requires substantial hardware quantities to operate. Consequently, there are companies willing to offer lower prices to secure their business. The competition level is not regarded as very high, considering that Neopets has developed a unique and cherished product that users are deeply connected to.

The text emphasizes that Neopets are like virtual pets for users and it is unlikely for people to abandon their pets just because a new kind is available. Although it

is an exaggeration, individuals, particularly younger ones, develop strong attachments to personal belongings like Neopets. Furthermore, Neopets is actively taking steps to stay relevant and retain users' interest. It is natural for the bargaining power and competition to change over time in the business cycle. Eventually, their bargaining power may decrease and alternative options may emerge in the market. However, Neopets has effectively marketed themselves and positioned themselves to maintain their bargaining power and competitive advantage for the next few years.

• Should Neopets partner with Green Dot? Why or why not? (5 points)

Yes, I think Neopets should collaborate with Green Dot. Moreover, apart from the available capital, Green Dot provides numerous useful tools to enter the promising Asia market. With Green Dot's assistance, Neopets can overcome various obstacles such as political, language, and sales barriers that may otherwise be impossible to overcome. I believe that the product is a perfect fit for the Asian market, and partnering with Green Dot would be an excellent strategy to tap into this market.