CASE ANALYSIS: HUGE AND DATA STRATEGY
INTRODUCTION
This paper covers the case study of HUGE’s digital strategy, a full-service digital marketing agency with headquarters in Brookline, and provides strategy, marketing, design, and technological services. It includes internal and external analysis of the firm concerning digital strategy, analysis of SWOT, and proposes alternative solutions and future approaches to various issues from the analysis and the implementation.
INTERNAL ANALYSIS
Operations Management
The Development Process. The process was crucial for work at HUGE, allowing to conceive, develop, and later implement digital marketing products in different circumstances. The process that led to success involved the ability to begin solving problems early enough and the test, learn and learn to respond to user preferences. The process has three stages, analysis, development, and optimization leading to five more discrete steps. The steps allowed HUGE to develop a digital project systematically.
Financial Analysis. HUGE has continued to post a growth in revenues since its founding, growing from estimated revenue of $2.8 million in 2005 to $74 million in 2011, a growth rate of over 2500%. 10% of significant project revenue comes from project management, 20% from research and strategy. 35% of revenue is from interaction and visual design, while the other 35% comes from the implementation and support of Information Technology.
Customer Management
. HUGE attracts clients by making them realize that digital is critical to their business and the need for investment to make them succeed. Therefore, HUGE changes the conversation with clients so that it reflects a broader business issue surrounding the whole company, and how HUGE will fix that. In designing digital products. HUGE emphasizes user experience, thereby making an easy-to-use interface that is usable, simple, and elegant while also meeting business objectives. The strategy helps in attracting more customers, together with lower costs as compared to consultancy management firms.
Digital projects for customers focus on satisfying business goals and meet the technical feasibility test. HUGE tries to expand the proportion of clients that have a long term relationship with. By positioning itself as a recurring component of companies marketing budgets, the firm can secure long term relationships with customers that will, in turn, draw in more revenues. The retainer project includes carrying out digital projects in the form of adverts and market searching.
Planning for the future
Geographic expansion. The plan is to use what is working well in New York to other cities and countries. Having a larger geographical footprint, the firm will reach more customers and compete with more digital agencies. The plan also includes retainer relationships by expanding the proportion of customers that have had a long relationship with HUGE—having a long term client retainer will result in more revenues as compared to single time engagements. HUGE could do so by strategically positioning itself as a recurring competitive component on the marketing budgets of companies.
HUGE could also expand offerings into the traditional marketing services by increasing emphasis on display advertising, market searching, public relations, and print media as well as television advertising. By doing so, the firm will face the ad agencies across non-digital media. Another plan I for HUGE to expand information technology offerings to a more robust technical support. Besides, HUGE targets the health care and pharmaceutical marketing, as such companies spend up to $5 billion annually in advertising, with only $1 spent on digital marketing. With the expected growth in the amount spent on online marketing, healthcare is an attractive market opportunity with competitors like Digitas and Razorfish establishing health care practices.
Social Responsibility
The firm organizes and sponsors regular events of interests to employees and other industry members, hosts expert talks, and panel discussions on issues such as gender balance in the digital sector. Such activities boost the morale of employers and make them feel more connected with the world around them
Current strategies
HUGE labs incubator for a digital product that allows staff to submit different ideas and participate in the strategy and design challenges, where products are developed and launched as income-generating businesses. Also, HUGE developed a talent program with formal training programs like a three-month HUGE UX school for design talent.
Competitive advantage.
Management consulting firms are more expensive than services offered by HUGE. Project execution and implementation contribute to the majority of the revenues, giving HUGE an edge over competitors. Also, HUGE competes for creative talents from different firms, while also partnering with traditional marketing services to coordinate with offline clients’ marketing initiatives.
Human Resource.
HUGE has seen the number of employees grow from just 15 in 2005 to 376 full-time staff in 2011, a growth of over 240%. The management works so hard to make the work environment to attract the selected few in terms of employment. For instance, the firm received over 3000 applications employment requests, with only 13 employed, a 0.4% hiring rate, implying how competitive the workforce is.
Information Technology capability. HUGE has worked to compete with emerging technology specialists to expand its offerings to the latest platforms, while also the acquisition of other players to develop capabilities in mobile and social media practices. For instance, when clients required tablet applications, HUGE had to hire developers with Android experience.
Corporate culture. HUGE believes in making a workplace an exciting place. This cultural belief helps and inspires high skilled workers to give their best, while also, the firm avoids lists of rules on how an employee should behave. The firm does not compel anyone to work on any project that one has strong reservations. An example is when consultants were allowed to leave projects from clients whom they had different political beliefs.
Management. The majority of initial employees of HUGE grew with the company to assume important leadership roles, making the management and leadership team one of the factors that contributed to the company’s success. As a result, the administration can maintain the culture, objectives, and policies of the firm.
Summary of Strengths and Weaknesses
Strengths
The high cost of competitor products.
Competitive workforce.
Partnerships with other agencies
Technological capabilities.
Organizational and cultural structure.
Weaknesses
Limited brainpower and excellent talent.
Conflicting client needs.
EXTERNAL ANALYSIS
General Environment Trends
Political. A case of HUGE, wherein one case consultants was allowed to leave a project just because they had differing political beliefs with the client. This case shows that in the digital marketing industry, political beliefs have a contribution because firms may choose who to serve depending on political ideologies.
Environment.
Social. Marketing officers, especially in marketing agencies, switched from one firm and job to another, looking to work under certain conditions, which was an issue to client relationships. Besides, obtaining the limited brainpower and talent forced digital firms to cultivate a culture that helps, inspires and retains the existing workforce.
Technology. Mobile technologies were projected to be the fastest-growing digital marketing format in the industry. The introduction of RIM Blackberry in 2002, iPhone in 2007 and Google Android platform in 2008 all revolutionized the digital marketing industry as email, and web browsing became more sophisticated. With the growth of mobile technologies, doors for on-screen advertising were opened, development and sale of customer relationship management and location-based marketing such as discounts and promotions—mobile technology allowed for the use of functions that were only possible in computers.
Economic. The continuous rate of growth of digital marketing share in the overall advertising industry has contributed to the growth of the digital marketing industry. With a projected share market value of $76,619 million in 2016 p from $23,008 million in 2009 is a clear indication of economic contribution to the growth of the digital marketing industry.
Legal.
Capital markets.
Demographics.
Globalization.
Industry Review
Market trends.
Creative and user experience design. The graphical user interface established important parameters for the digital experience. From text scanning to moving the cursor and liking interesting items. Early web designs included logos, colours and images and user experience that emphasized the ease of use of the sites. At the same time, layout navigation and content helped users with tasks such as purchasing. Therefore, creativity and the user experience addressed traditional marketing needs like branding, packaging and customer interactions.
Display advertising. Marketers too found other similar selling opportunities on graphical user interface web. For instance, the first clickable banner appeared in the online publication Global Network Navigator in 1993. In the following decade, advertisements evolved into many sizes and shapes, with the advertising market making more than double in 2009 from $3.2 billion in 2003.
Search Marketing. As the number of websites increased through the 90s, there was also an emergence of search engines as a means of organizing content into easy-to-use through search queries. By 2000, Google was an established search engine, making an appealing venue for marketers to promote products. In 2006, search queries on google reached 91 million per day.
Social media. This trend was an alternative way of integrating marketing with consumers’ natural activities. With Facebook at Tweeter launching in the mid-2000s, social media allowed users to build profiles and messages to friends and the public. Marketers saw social media as an opportunity to promote brand loyalty among customers as social networks became mostly visited, promoting more views for display targeted advertising.
Mobile. They are the fastest-growing digital marketing format in the industry with a projection of $8,237 million shares. With the introduction of the iPhone and Google Android platform, a more significant set of mobile possibilities emerged. As technology advanced, the door for on-screen advertising was opened, with marketers developing and selling customer relations management apps. Mobile technology further advanced social media, easing access to display targeted advertising.
Market size and cycle stage. The digital market size, composing of social media, email, display, search, and mobile advertising was projected to grow from a 9% of the total advertisement expenditure in 2009 to 26% in 2016. The percentage represents a growth of digital spending from $23,008 million in 2009 to $76619 million in 2016, an excess of 333% growth in market size. Businesses have been communicating using the internet ever since the availability of web access in 1989, with a significant breakthrough in 1993 when scientists released Mosaic web browser application for easy browsing. The digital marketing industries has grown since the invention on Graphical User Interface to the use of social media, emails, displays, mobile technologies and market searching.
Market attractiveness: Potter’s five forces Model
Buyer power. In a study of 16 countries, an average of 37% (exhibit 8) of the population has purchased online, while an average of 72% of all firms have websites. With e-commerce having a share of over 15% of the total commerce in the 16 countries, the digital marketing industry has many buyers and experiences a high buyer power. Therefore, there is a lot of demand for quality service from users.
Seller power. The increasing number of firms in the digital industry makes the providers have less power in the market. The real bargaining power lies with buyers, making the industry very competitive for digital marketing firms.
The threat of substitution. While having the digital marketing industry, businesses still use traditional advertisement modes. This is evident from only 26% projected share in the overall advertisement market share. This implies that the digital marketing industry is faced with a close substitute, making it very competitive.
Competitive rivalry. There is a high competition in the digital marketing industry, with at least ten firms in the top 25 digital agencies in the United States by revenue in 2010 having some close range revenues from $175 million to $502 million. This tight range implies that the firms are approximately equal in size and power, and consumers can easily switch at little cost.
The threat of new entry. The growing market share of the digital marketing industry only attracts more players making the market very competitive.
Competition.
The digital marketing industry is very competitive, as evident from Potter’s five forces of competition. Leading firms like Digitas, Sapient Nitro, Ogilvy Interactive, Razorfish, Wunder man and Draft FCB are just examples of the players in the market with revenues of over $300 million in 2010. With HUGE appearing in the 47th place shows that the digital marketing industry is flooded with very competitive firms.
Summary of Opportunities and Threats.
ANALYSIS OF SWOT AND PESTEL
ALTERNATIVE SOLUTION TO ISSUES
PROPOSED FUTURE STRATEGY
IMPLEMENTATION OF THE STRATEGY
CONCLUSION