Huge and Digital Strategy Case
STRATEGIC MANAGEMENT I
HUGE and Digital Strategy Case
Tuesday, January 15th 2013
Huge is a global full-service digital agency that provides digital strategy and implementation for some of the largest companies and brands in the world. It has been founded with a strong focus on user experience (UX) and in 2009, it was recognized as the fastest growing digital agency in the US in terms of client base and revenue. In order to choose the best growth option for Huge that will enable it to reach revenue levels in the hundreds of millions without compromising its reputation for excellence, first the attractiveness of the digital marketing industry will be assessed using Porter’s five-forces model. Today, the digital marketing industry has developed into a complex constellation of design, strategy, and technological consultancies. As per Porter’s five-forces model: • Bargaining power of suppliers is very low because there are no real suppliers in the industry. Huge may decide to partner with a traditional marketing agency or a traditional business firm depending on the situation but so many players are available that bargaining power is very low. • Bargaining power of customers is very high due to the high number of players in the industry, plus the fact that the customer itself poses a threat of integrating the industry backward. • Threat of new entrants is high because barriers to entry in the digital space are considered low. In addition, constantly evolving technologies makes the industry more attractive to qualified new entrants that can easily grab shares in the market. • Threat of substitutes is very high due to the constantly evolving technologies and new available products. Several specialties are available such as creative design, user experience design and digital Customer Relations
HUGE and Digital Strategy Case
Tuesday, January 15th 2013
Huge is a global full-service digital agency that provides digital strategy and implementation for some of the largest companies and brands in the world. It has been founded with a strong focus on user experience (UX) and in 2009, it was recognized as the fastest growing digital agency in the US in terms of client base and revenue. In order to choose the best growth option for Huge that will enable it to reach revenue levels in the hundreds of millions without compromising its reputation for excellence, first the attractiveness of the digital marketing industry will be assessed using Porter’s five-forces model. Today, the digital marketing industry has developed into a complex constellation of design, strategy, and technological consultancies. As per Porter’s five-forces model: • Bargaining power of suppliers is very low because there are no real suppliers in the industry. Huge may decide to partner with a traditional marketing agency or a traditional business firm depending on the situation but so many players are available that bargaining power is very low. • Bargaining power of customers is very high due to the high number of players in the industry, plus the fact that the customer itself poses a threat of integrating the industry backward. • Threat of new entrants is high because barriers to entry in the digital space are considered low. In addition, constantly evolving technologies makes the industry more attractive to qualified new entrants that can easily grab shares in the market. • Threat of substitutes is very high due to the constantly evolving technologies and new available products. Several specialties are available such as creative design, user experience design and digital Customer Relations