Chegg Business Strategy
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Digital Marketing Industry
Digital marketing is getting more strategic with the advent of new technology and with a shift in paradigm of digital media usage by consumers. Operating firms have predicted and identified this shift among their consumers and increasingly looking for developing digital marketing strategy to reach their customers in order to sell their products. As the consumers are getting more digital savvy, operating firms has been increasing their online advertising expenditure.
Digital Marketing Industry Value chain
Huge Inc. started with web implementation firm developed its capabilities to grow into a full service digital agency providing end to end business solution starting from creating a digital strategy, which includes:
To identify the opportunities in a business to be addressed by digital solutions
To identify customers needs aligning with identified business opportunities
To develop a vision around those business and customer needs & opportunities.
Design an online product campaign and implement it in multiple online channels, if required.
This part of value chain is shown by green box above.
Along the years, Huge has developed an expertise in UX design, which has been merged with creative design. Next two boxes are merged in one with an importance of corporations web presence.
Finally the last step is the implementation of design using technology to provide customers a point of purchase.
Huge is a one stop shop and provide end to en digital solution to corporations.
Industry Analysis with Porter 5 forces
Conducting an analysis of digital marketing industry, we have
Supplier power – This majorly consist of technology logistics provider and workforce which is scarce given the industry needs creative and innovative minds. There are more than 100 small firms in the same industry which are competing to recruit the talent, which makes the supplier power Medium in present scenario but increasing as more and more client firms are moving towards digital marketing strategy as the corporations are increasingly allocating their budget towards digital online marketing.
Threat of Entrants – This is Medium & Increasing as barriers to entry in this industry are quite low with low capital requirements. Also, as the corporations customers have been increasingly moving towards technology, many corporations have realized the potential of digital marketing. This need has been identified by many service providers already. However, to be successful, client relationships and brand equity has been identified as key parameter which largely offset some attractiveness of this industry. Moreover scarcity of workforce and low economies of scale being a one stop shop entrant largely offset the attractiveness of the industry.
Buyer Power
As many client firms have already recognized the need of moving to digital marketing, many digital marketing service providers have already entered into the industry. Moreover traditional marketing service providers, IT firms, PR firms & management consultancy firms have realized the potential of this market and have quickly repositioned themselves to cater the needs of corporations. But every client has a different need and strategy so these services have to be largely customized for them. Creativity and innovation from service providers largely offset the buyer power to bargain. As brand equity and credibility of marketing service provider plays a huge role in gaining businesses from corporations.
Threat of substitutes
There are not many substitutes for digital marketing as such. Exhibit 9 suggests the projected growth in spending through various media channels. Internet/online looks very promising in the sense and this is why many traditional providing firms are shifting towards digital marketing services. Currently there are substitutes such as outdoor marketing etc but largely the trend of advertising in other media is decreasing.
Rivalry
There are many firms in the industry which is making the competition high. It is also the fact that client firms need customized solution from service providers such as HUGE and as the number suggests that industry is expected to grow in future, some new entrants can make this competition more intense. Overall, as per the projection of consumer behavior and digital marketing, this industry is looking very attractive with few hurdles such as skillful workforce, client relationships & brand equity for new entrants.
Overall, Huge has threats from the traditional marketing firms and IT firms who have rapidly developed their capabilities to provide digital services and leveraging on their brand affiliations and existing client relationships
Value net & Parts
Players (P) – There are many players in this industry, which can potentially substitute Huge digital such as traditional marketing firms & IT firms who are extending their capabilities into digital marketing. This is a complex value net where players are playing multiple roles. As this is a fluid and unpredictable industry & is already flooded with many similar companies as huge, there is a potential for this value net to get more complex. Convergence of the industry led to the complex set of value net.
Added Value(A) – Huge had a little value to add in this industry as it already a well populated industry which provides the same services, which Huge does. This little value is derived from the brand equity & client relationships which Huge has developed over a period of time by providing end to end solutions. However, Interpublic groups stake of 51% in Huge has increased its brand credibility in the digital space as group is