HUGE was founded in late 1990s, as one of the few firms that were meant to integrate new digital marketing strategies which were to reshape how marketing was done. The other companies formed in this time included Critical Mass, Organic and Razor fish among others. Other companies like Digitas that mainly focused on CRM began to enter the online marketing segment to get a piece of the pie.
Companies have been making a shift towards online advertising in the time since the mid-1990s. This has been a factor that has enabled web development firms to grow very fast in size and revenues. In 2009, HUGE was recognized as the company that had grown with the fastest rate among the digital marketing companies. The company had started with 20 employees in 1999 and by the end of 2009, the number had increased to 350. Other than that, the number of clients had also increased, therefore, leading to it being recognized as a top online marketing business.
The success of HUGE has been as a result of the company positioning itself as a critical player and partner in making strategies, design and creating new technologies for big companies. Dedication of employees has also contributed to the growth with a team of early employees still being in the business and had grown with it over the years. The experiences that these employees have been vital in making the business successful. Hence, it has increased the revenue $3 million during its starting year to around $43 million in 2009. Another reason HUGE has been on a positive growth trend is because it has visionary leaders who are able to clearly notice the needs of the clients and market trends.
General business environment has many components within it; they include government forces, political forces, legal forces, technological forces among others. All these forces affect the performance of the business in one way or the other. Marketing is important in any business because increase in revenue is dependent on how well a company has marketed its products, so good strategies are needed to propel a product. With the realization that digital marketing is more effective, coupled with a good economic environment, it ensures that digital marketing companies such as HUGE continue to increase.
This has not been the actual case over the years. There was a slow growth in this arm of marketing in 2007/8 during the global economic meltdown. Most businesses stagnated or had a negative growth during the time. It shows that economic factors can directly affect the business positively or negatively. Due to demand by large companies to market their products using digital resources, companies like HUGE will continue experiencing the positive growth path as well as benefit from an increase of marketing resources by companies.
The social part of analyzing a business component is concerned with assessing cultural, demographic, environmental and social profiles of a particular business. Study shows that more people are becoming tech savvy, and spend more time online than on any other media outlet. Even though countries like the U.S and other western nations have an aging population, they spend much time on the internet. This trend has forced companies to spend the highest share of their marketing budget on online advertising. It includes making strategies, web design and marketing itself.
HUGE growth metrics indicates that the company has been having high growth rates and I presume that the company will be on the same trend in the future. According to United Nations statistics, the world community has hit 6 billion people; America has only 300 million people, which means that there is still a market yet to be tapped with even developing countries embracing the internet.
Political and governmental factors can also have a significant impact on the success of the business. In the U.S for instance, there has been a huge increase of new technology innovations as a result of favorable policies being formulated to support the business and also a good tax regime. Other political variables may affect the development and operation of any business. HUGE has benefited from a favorable political environment in the country.
In any business, there are competitors; HUGE has many competitors in this business. Some of the competitors include Digitas, Razorfish, and Rapp among others. To be competitive, an organization like HUGE needs to have top talents in its workforce and also find new clients from other fields. In order to boost growth of revenue HUGE has decided to venture in the pharmaceutical industry.
The external part evaluation matrix enables the people who are in charge of making procedures in for an organization to estimate and summarize information regarding all the factors that affect the business. The factors include legal, competitive, technological, cultural, social, technological and political factors. The factors are weighted on a range of between 0 and 1. Then assign a rating of between 1 and 4 to the strategies the company has created to deal with the factors. For an effective response, the rating given is 4 while a poor response of a strategy to part is given a rating of 1.
EXTERNAL FACTOR EVALUATION MATRIX FOR HUGE COMPANY
Porter five force model focuses on how rivalry or business competition is brought about in the business. HUGE is a business that is under no big threat in the digital marketing industry, though there are new firms trying to enter the market HUGE has a competitive advantage. It should apply this advantage in order to have extra power against its competitors. As companies create new and existing products, they need to advertise. The companies will need to advertise; therefore, digital media companies will get part of the budget meant for advertising.
Traditional advertisement companies are switching or setting up an arm of digital media advertising because to boost revenue. HUGE profits have risen over the years since there is no much threat of new entrants. This has been caused by the high capital requirement needed to start up a business. Brand identity is another reason new firms are unable to enter the market since only trusted brands are used by big companies. Switching cost is high for other companies trying to enter the market; therefore, and HUGE will continue to thrive.
Threat of substitutes is another cause of rivalry, clients can choose to use other avenues used to advertise like the electronic and print media. HUGE will need to prove to clients that digital adverting and the strategies that they use are the best when it comes to promoting a product. Another factor that porter five force model itemized as a cause of rivalry is buyer power. The business is growing because there are enough buyers in the market. Client base for HUGE has increased over the years since the buyer power has increased over the years.
Online advertising has generated more revenue than other modes of advertisement in the recent past. Factors contributing to this trend are cultural, social and technological advertisements. As more companies spend more of their budget on digital marketing companies, there will more companies that will try to enter the market. The strategies used to lure more clients will need to change. HUGE will need to diversify in some other fields to reduce competition. The people being hired will have to be the top talents for it to continue with the growth trend. Most of the companies will use top level company to make their advertisement and marketing strategies. However, in the long run many new firms will try to enter the market because of the good payoffs. HUGE profits will not be affected because the most preferred method is online marketing.