INDIAN INSTITUTE OF MANAGEMENT, ROHTAK

Management Information System (MIS)

Case Study: Navigating a Strategic Dilemma at LinkedIn
Group 1

NAME ROLL NO.

SIDDHARTH GUPTA IPM03158
SUHANI TAYAL PGP15237
TANISHA MITTAL PGP15245
VANSHIKA GARG PGP15256
VANSHITA GUPTA PGP15257
VANSHIKA GUPTA PGP15258
Contents

INTRODUCTION......................................................................................................................1
Case Study: Navigating a Strategic Dilemma at LinkedIn........................................................1
The Escalating Threat..............................................................................................................1
Fake Profiles and AI-Generated Content:............................................................................1
Manipulated Job Postings and Scams.....................................................................................2
Internal Response................................................................................................................2
The Foundation of LinkedIn’s Business Model........................................................................3
Customer Segments: A Closer Look at LinkedIn’s User Base.............................................3
LinkedIn’s Unique Offerings and Value Creation..................................................................3
LinkedIn’s Revenue Model.......................................................................................................3
Financial Performance and Growth..........................................................................................5
LinkedIn’s Core Business Processes and Resources..............................................................5
User Onboarding and Profile Creation.................................................................................5
LinkedIn’s Key Resources and Competitive Advantages.........................................................6
The Emerging Threat: AI-Powered Fraud................................................................................7
The Strategic Debate...............................................................................................................7
The Value Creation Dilemma...................................................................................................8
The Decision Point...................................................................................................................9
INTRODUCTION
Rohan Mehta, the new Head of Strategy at Takara Tomy in India, was in his Mumbai office,
looking at the latest quarterly sales report. The digits were alarmingly low—Beyblade sales had
dropped by more than 60% in the last five years, which indicated the failure of the brand in
India.
He knocked his fingers on the table, reviewing the childhood memories of playing Beyblades
battles with schoolmates. At that time, the toy was not only a game but also a part of the culture.
Today, it had a tough time competing with the mobile games.
His mail was full of messages from the distributors who were expressing their worries about the
stuck inventory, and the surveys sent by the parents were indicating a trend towards preferring
the educational items rather than the ones with a lot of action. [Exhibit 1] Takara Tomy Japan's
investors and the global leadership team were pushing him for a quick and effective plan.
Being competent in the Indian market, Rohan understands that he has to come up with the right
strategy for reviving the popularity of Beyblades and acquire a new breed of customers and thus
become sustainable in the market. However, the clock was ticking.

Case Study: Navigating a Strategic Dilemma at

LinkedIn
John Matthews, the Chief Technology Officer (CTO) at LinkedIn, was confronted with one of his
most critical career dilemmas. The social professional networking platform, which was built on
the values of trust, authenticity, and meaningfulconnections, was in a dire situation. In the last
six months, the amount of fake profiles and AI-generated content that had been pouring into
LinkedIn went up to a noticeable degree. Even though LinkedIn has always been fighting
against the spammers and cybercriminals, the new AI driven bots were never before such a
serious threat. This ongoing crisis was the cause of the platform's identity as the world's most
dependable professional network eroding.

The Escalating Threat

Fake Profiles and AI-Generated Content:

Even though the number of fake profiles was immense, the platform was still functional. The
spam accounts identification was based on previously used conventional marks such as
repetitive names, incomplete profile information, as well as imperfect language skills.
Nevertheless, this new category of fake profiles appeared very real. To make things seem as
though the profiles were legitimate, these AI models employed tech advances such as the
Internet of Things and deep learning as well as other technologies. Basically, these profiles

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were capable of even listing their "jobs" with all the necessary requirements, to get lot of
recommendation and even show the elaborate sets of skills they could prove to possess. The
constant complaints from recruiters about the over-presence of candidates with supplies of any
mistakes found out to be nonexistent. Therefore, nothing but wasted time, employer's trust
deficit, as well as the hiring managers' increasing frustration resulted.(exhibit 1)
Also, the provision of AI-generated content was equally alarming. The professionals initiating
relevant industry talks got themselves tangled in debates with algorithms. These responses
were seemingly intelligent, yet, in most cases, there were no depth or authenticity present which
consequently brought unwanted differences in often lively and personal exchanges. The
situation at LinkedIn has worsened, where once-thriving article writers have become
discontented due to the platform's loss of credibility.

Manipulated Job Postings and Scams

Beside the fact of counterfeit profiles and spam posts, con artists also stooped to a try on the
job posting feature of LinkedIn. They published made-up job offers to deceive innocent job
seekers either into paying fees or providing sensitive personal information. This way, the
platform’s reliability was lessened for the users that damaged LinkedIn's core value proposition.

Internal Response
Safety reports and system overload

Security reports are very carefully looked into by John Matthews. The existing fraud detection
models of LinkedIn, even with regular updates, couldn’t deal with the massive load of suspicious
activities. The IT security and product development teams were constantly working day and
night. However, every improvement to the detection system resulted in it being no longer
functional as AI-generated profiles became more and more sophisticated. Old-style rule-based
detection models were losing out to the increasing complexity of modern-day generative AI
tools.

Pressure from Leadership The executive team

accepted to be the main cause of the problem and ordered the company to take immediate action.
The biggest worry among stakeholders was that a long absence of action would result in the
public showing how angry they were, legal sanctions, and last but not least, the downfall of the
user trust. John knew that the situation was acute—he and his team had only five days to give an
overview and outline a solution that would correct the matter.

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The Foundation of LinkedIn’s Business Model
In 2002 LinkedIn was founded and in December 2016, it was bought by Microsoft. However,
Reid Hoffman, the founder of the company, stayed as the Chairman, while Jeff Weiner has
continued to be the CEO since 2008. The decision to prolong team continuity displayed the
ongoing strategic direction and growth of its key figures.

Customer Segments: A Closer Look at LinkedIn’s User Base

LinkedIn’s business model revolves around multiple customer segments, each of which benefits
from tailored offerings:

1. Professionals (Users): These are internet users who create profiles on LinkedIn to
showcase their professional identity, network with others, and access career
opportunities.
2. Recruiters: Hiring professionals leverage LinkedIn’s extensive database and AI-powered
search functionalities to find and connect with high-potential candidates.
3. Advertisers and Marketers: Businesses use LinkedIn’s precise targeting tools to engage
decision-makers and high-value audiences for brand promotion and lead generation.
4. Third-Party Developers: Software developers utilize LinkedIn’s APIs to build
applications that integrate with the platform, enhancing user experience and extending its
functionality.

LinkedIn’s Unique Offerings and Value Creation

LinkedIn is one of the top job sources in the world, which offers different versions of value-
adding to many a range of people. Linkedin's population, which is now over 700 million people
worldwide, is the target of high-demand jobs, companies, advertisers, and technology
professionals. They have provided a whole new set of features that cater to the professionals,
recruiters, advertisers', and developer's respective objectives.

LinkedIn’s Revenue Model

LinkedIn is a company that practices a diversified revenue model encompassing different ways
of earning money, which in turn leads to stability and growth of financial funds. The biggest
source of revenue for Talent Solutions, Marketing Solutions, Sales Solutions, and Premium
Subscriptions is the platform's four main revenue sources:

1. Talent Solutions (65% of Revenue): A significant part of LinkedIn's turnover is generated by

Talent Solutions, which is the tool that has brought most of LinkedIn's income. In this category,
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LinkedIn supplies products and software solutions for businesses and recruitment companies.
LinkedIn is a popular corporate platform and technology company and one of the most sought-
after hiring sites in the world. To be specific, LinkedIn Recruiter is highly profitable for a
recruiter as he/she can access Linkedin's huge database of professionals. This useful application
is equipped with advanced search, profile management, and collaboration. In other words, it
allows recruitment teams to be efficient in their work. Besides, through premium subscriptions,
LinkedIn Learning also provides experienced teachers a chance to create over 15,000 videos
related to their field. For those who enjoy continuous learning, it is very convenient to use
LinkedIn Learning. It provides opportunities for professionals to take part in different courses
and thus achieve new skills, leading them to a better job position, respectively.

2. Marketing Solutions: LinkedIn's advertising platform provides the opportunity for businesses
to run targeted campaigns. Sponsored content, the most popular advertising feature, allows
companies to publish posts, articles, and videos directlyin the feeds of the users. Moreover,
senior executive decision-makers have the right to provide ads. InMail is an example of an
advertising campaign that has personal information added such as the name of the person who is
the recipient of the mail. In addition, a company that wants to do paid advertising can go with
banner ads and/or sponsored messaging. Businesses can identify interesting prospects that they
would finer details would be focused on by using Linkedin. Therefore, consumer data is most
valuable to market branches that connect not only with new clients.

3. Sales Solutions: LinkedIn's premier sales platform Sales Navigator, Sales Navigator directly
entices individuals as well as professionals with an abundance of insights including company
profiles, industry trends, and job changes. to companies, industry trends, and transition from one
job to another. The advanced filtering feature, personalized lead recommendations, and the
ability to access CRM are the most salient features that Sales Navigator can offer to the sales
teams to help them fully engage with the right decision-makers. A tool that allows them to give
data through data is what the platform employs to sales professionals to attract and retain
customers in the long run and close deals and thus helps the sales conversions to be improved
too.

4. Premium Subscriptions (17% of Revenue): In the meantime LinkedIn provides several

subscription packages dedicated to different segments of users who want to have access to
premium features. One has the premium account of Career and the other of Professional. These
are the accounts that give users the most benefits such as search functionality advancements,
InMail credits, and profile insights. Being able to connect with professionals as well as a career
coach, visualize in a short amount of time opportunities like a boosted profile, and many other
functions are made possible by these functions, which improve communication, through the pop-
up alert and the internal message sending mechanism. This is carried out by LinkedIn's premium
product offerings targeting the highest growth in the number of users who seek a wider selection

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of contacts than the immediate one and prompt career progress, thus "The platform is an
invaluable resource for career progression.

Financial Performance and Growth

The LinkedIn Financial Statement gives evidence of a sustainable revenue model and
substantiates great financial growth. In 2019 fiscal year, LinkedIn announced a revenue of
almost $6.8 billion, a 29% increase from the year before when it was $5.26 billion. The growth is
the result of LinkedIn's continuous investment into the improvement of its platform, the
augmentation of services, and the introduction of new functionalities to meet changing market
demands.
The bulk of LinkedIn's success can be related to its many attempts to attract more than one type
of income. By presenting breaking-edge Talent Solutions together with the most efficient
advertising models, customized sales tools plus of course, premium subscriptions which are very
beneficial, LinkedIn has become one of the most powerful if not the most powerful force in the
professional networking field. On the way to LinkedIn's increased innovation, it boasts a larger
outreach as well as a richer user involvement, thereby, guaranteeing, sustainable, and value-
added growth to company owners.

LinkedIn’s Core Business Processes and Resources

LinkedIn, the world’s largest professional networking platform, had grown into a sophisticated
ecosystem that seamlessly integrated technology, data analytics, and user engagement to create
immense value for its members and corporate partners. The company's operational processes
were designed to manage a vast and dynamic professional community efficiently, and at the
heart of these processes was an intricate web of automation and artificial intelligence (AI).

User Onboarding and Profile Creation

From the moment a user signed up on LinkedIn, the platform employed multiple layers of
security and authentication to verify their legitimacy. The initial steps included email verification
and CAPTCHA authentication to weed out simple bots. For accounts flagged as potentially
suspicious—such as those created in bulk or originating from certain high-risk geographies—
LinkedIn required additional phone verification to confirm authenticity. However, as AI
technology advanced, so did the capabilities of malicious actors who sought to exploit these
systems.

AI-driven content moderation played a crucial role in ensuring LinkedIn remained a professional
and secure environment. Machine learning algorithms continuously scanned user profiles, job

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postings, and direct messages, assigning risk scores to activities deemed suspicious. If a certain
threshold was crossed, the profile was flagged for human review or, in extreme cases,
automatically removed. While this system had been largely effective, it was now facing an
unprecedented challenge: AI-generated bots were becoming more sophisticated, often mimicking
real human behavior to evade detection. The platform relied on several core resources that
contributed to its sustained success and market dominance despite these challenges.

LinkedIn’s Key Resources and Competitive

Advantages
1. Data and Algorithms

 As for LinkedIn, its AI-driven recommendation systems formed the fundamental aspect
of the proposition that questioned the importance of its services in the market. On the one
hand, these algorithms helped job seekers to obtain the related opportunities, while on the
other hand, suggested active connections that were really meaningful at professional level
and the skill improvement courses which were customized to the professional paths of the
users that happened to be employed.
 This data made LinkedIn unique from old-fashioned traditional job boards, which he was
able to suggest his clients not only job solicitations but also personalized and proactive
recommendations by tracking their search history.

2. User Base and Engagement

 Success of LinkedIn was empowered by its massive and engaged professional user
community. Because of the 5 million people daily, who seek opportunities and network,
discussing trends and latest news of different business areas, the platform was a virtual
space for idea exchange, business development, and career development.
 The higher engagement rate, the more LinkedIn became a valuable link for the
professionals who gathered around, thereby, making it a network effect that was the
factor of its existence of the leadership position of LinkedIn on social media platform.

3. Enterprise Partnerships

 LinkedIn wasn't just a platform for individuals; corporations, recruiters, and advertisers
were key actors in the platform. The people working for organizations relied on LinkedIn
to engage the services of talented employees, promote their brands, and be their thought
leaders through long-form content.
 The LinkedIn’s data trustworthiness and relevance have made it a property of human
resource managers, companies, and marketing teams in all sectors.
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4. Brand Trust and Reputation

 In contrast to the rest of the social networks, LinkedIn has come to be known as a place
that values serious and professional interaction. It has been a place where the connections
of only real professionals were realized, for that reason, it was attractive and almost the
only viable alternative compared to non-serious platforms such as Facebook and Twitter.
 Nevertheless, the use of AI to create fake accounts challenged the credibility of the
platform. If only, seeking to connect, users suspect their relationships might be
inauthentic, LinkedIn’s forte of a trust-based business would simply completely
disintegrate.

The Emerging Threat: AI-Powered Fraud

Ironically, LinkedIn’s forte in AI was converted into its Achilles heel. Scammers and fake
account creators started using AI to forge realistic profiles. These robots were able to do the
following:
 Act like a real human, holding long and endangered conversations.
 Put up content relevant to the business to look trustworthy.
 Get mutual endorsements from and of AI profiles.
 Send applications, gather information that is personal, phish and scam people.
The gravity of the issue was huge. These fake accounts were not just a minor annoyance but
were actually undermining LinkedIn’s reputation actively. Job recruiters started to wonder if the
applicants were real or not, other professionals felt uneasy to accept connection requests, and
advertisers stopped to think if they were really reaching out to real users with their money.

The Strategic Debate

Appreciating the weight of the problem, John, LinkedIn's Chief Technology Officer instantly
summoned an impromptu meeting with his main crew to rescue the day. The meeting was used
for the staff to not only share information about AI but also to outline the need for fundamental
platform changes.
The discussion quickly got louder as it was highlighted by a very heated debate that was
thronged three separate brigades:

1. The AI-Powered Verification Advocates

This group suggested a futuristic verification mechanism involving:
 Facial recognition: Through a real-time photo on the spot, the users' identity will be a
must.
 Blockchain-based certifications: The educational as well as professional certificates
would remain famous on a permanent accounting.
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  Multi-step authentication: Those classified as risky would have to complete extra levels
of verification.
The advantages were evident—this protocol's result will be the massive drop-off of fake
accounts and the strengthening of LinkedIn’s authenticity-based image.
On the other hand, the risks were high. Introducing such a system would really mean a new
infrastructure and could discourage new users who are still somewhat unattainable in less
developed markets.

2. The Community-Driven Reporting Advocates

 This group believed that the best way to combat fake accounts was by leveraging
LinkedIn’s own user base.
 The proposal involved:
 Empowering users to report suspicious accounts.
 Deploying AI models to analyze these reports and identify fraudulent behavior
patterns.
 Incentivizing active users to participate in fraud detection.
 The benefits of this approach included minimal disruption to the user experience and
cost-effectiveness.
 However, there were challenges. What if users didn’t actively participate? Worse, what if
bad actors manipulated the system to target legitimate accounts?
3. The Hybrid Approach
 A third option emerged: a combination of AI-powered verification and community-driven
oversight.
 High-risk accounts would undergo stringent verification, while trusted users would have
a more streamlined onboarding process.
 Community-driven reporting would be enhanced with gamification elements, rewarding
users who helped identify fraudulent profiles.
 This approach offered a balance between security and accessibility, but implementation
required careful planning. How would LinkedIn determine which accounts were “high-
risk”? Would the system be perceived as fair?

The Value Creation Dilemma

Each proposed solution had implications for LinkedIn’s key stakeholders as the value
proposition and the positive network effects that the company had generated for many years
came under serious pressure.

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  Recruiters: They demanded authenticity but didn’t want additional hiring delays.
 Job Seekers: A complex verification process could deter them from joining.
 Advertisers: A drop in engagement could affect ad revenue.
 Existing Users: They wanted better security but not at the cost of accessibility.

The Decision Point

As John prepared for the executive meeting, he grappled with the gravity of the decision.
Moving too fast with AI-powered verification could stifle growth, but moving too slowly could
erode trust. He had many unanswered questions before him, with the biggest one being, “ How
could it affect the value that the digital platform has delivered for its stakeholders for such a long
time”? He had additional concerns regarding the erosion of market share to its competitors if
these concerns impact the sustainable advantage that LinkedIn has had for such a long time.
Would LinkedIn’s decision to focus on security, as opposed to opening up their network to all
users, lead to a decrease in market share? Is the open approach the best way to deal with this
problem, or, would the platform have to pass to some rogue users? The room would be divided,
and no decision would come without trade-offs.
As John stepped into the boardroom, he took a deep breath. The fate of LinkedIn’s reputation at
one of the world’s most respected professional networking sites as well as the entire future of his
company that is now riding on it, was to be determined by him getting through with this
challenge.

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Exhibit 1: Graph of Fake Profile Growth( Last Six Months)

Exhibit 2: Fake Profiles

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Exhibit 2: Security Features in LinkedIn

Exhibit 3: Revenue Share of LinkedIn

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Exhibit 4: Organisational Structure of LinkedIn

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