Banner Code: 07 15824
Lecturer: Inci Toral
Assignment Title: Case Study: Target the Right Market
Word Count: 1246
ID number: 1291160, 1207270, 1249898, 1228189 and 1259957
An essay Submitted to
Graduate Diploma in Business Administration Year 2, 2013
Birmingham, United Kingdom
11th, March 2013
This report explores case study of SparkPlace that was originally influenced by the case of HubSpot: Inbound Marketing and Web 2.0 (Steenburgh, 2009), an online-marketing software company. Due to the limited resources available to this company, it wants to target two available markets: small businesses with no more than 20 employees and medium-size businesses with 20 to 100 employees. The case illustrates that they are in a crossroad to choose within these two segments. The report will review company’s performances, marketing challenges, possible solutions and implementation.
The company’s performance
SparkPlace, a software developer on permission-based marketing campaigns for social media, has targeted companies with less than 100 employees, despite the fact that U.S., as seen on the table below, business employment have made up about more than 80% of US businesses from companies with more than 100 employees (U.S. Census Bureau, 2008). Consequently, the company should implement a good strategy on the available limited market to gain a significant penetration either to the existing or adjacent markets to make its business profitable and increase the market share. However, there are some issues to deal with in order to reach those markets.
It could be identified that one major challenge faced by the sales and marketing executives at Sparkplace is the dilemma in selecting the suitable market segment. The managerial competence of the firm is questioned when the management stands at a crossroad in order to select the best criteria, namely making a choice between generating profits in a short-term also called as a transactional relationship or contribute towards a dynamic loyal long-term relationship. This challenge could be evaluated through the critical analysis of the available marketing developments. “On the other hand, small software companies must establish credibility as reliable suppliers when entering markets. This cannot be done without developing mutually oriented relationships with cooperative partners in target markets.” (AlajoutsijaÈrvi, 2000)
SWOT is used to analyse the ‘key’ or ‘critical’ success factors, and is one of the highest ranked techniques of strategic analysis used by firms in empirical surveys (Glaister and Falshaw, 1999). In this report, SWOT analysis is used to identify SparkPlace’s internal strengths and weaknesses as well as the opportunities and threats from the external markets while dealing with their customers which are Sam’s and Mary’s.
In this case, the rationale of using SWOT as our strategic framework is because it indicates a good balance between internal and immediate external factors. We want to emphasise on the relationship between the company and their existing customer rather than conducting a more broader analysis such as PEST, Porters Five, or Boston matrix.
In conclusion, Sams’ is a better choice for SparkPlace in short-term, because it is easy to engage in. However, they have a low profit margin and considered as a risk averse. On the other hand, for long term Marys’ is a wise choice because it has high profit margin and loyal consumers can help SparkPlace improve their product continuously and build specific advantage to keep a strong competitiveness.
Additionally, it could be suggested that SparkPlace could obtain all the opportunities of both markets since Sams’ might help them sustain initially and Marys’ can help them to improve in the development stages. However, it could be highlighted that they might have threats of limited resources such as fund,...