Analysts Gao Jacqueline Gag 25th, 2013 Critical Mass (CM), a company that provides web design and digital marketing services to high profiled companies that aiming to build corporate branding through an internet strategy, is looking for expansion and is at a critical stage to bring innovation and reform to its current business model. In below report I analyze the major problems that CM is facing: limited customer base in terms of company profile as well as geographic exposure; losing customers; disadvantage in assembling optimal teams; and difficulty in recruiting qualified designers, etc.And I give my suggested solutions accordingly: expand customer base in terms of customer profile and geographic location; improve company structure; and lower labor cost.
CM, a internet services firm with a blue chip client list including many high profile companies, is not among the largest best-know companies within industry. It has not signed new clients for couple of years and has lost some highly desirable clients to competitors. CM needs innovative changes in several aspects as below analyzed:Current status analysis CAM’S current situation shows several obvious problems: 1. CM entered the industry very early, but is not well known in the industry, and its current customer base is limited to some extreme high profile customers. CM has turned down over 95% of the companies that contacted it, and CM has signed no new clients over previous couple of years. 2.
As shown in Exhibit 2, the client list, CAM’S business covers major industries but its business is major in the US, with very limited exposure in Europe, and almost no business in Asia. . CM is losing some giggly desirable clients to competitors. 4. CM does not have an effective organizational structure; it always assembles a team for a new task only according to staffs availability.
5. CM finds it difficult in recruiting creative staffs due to the geographic limitation and high salary level. Recommendation Given the above problems, my suggestion is as followed: 1 . Expand customer base in terms of customer profile.
CM should not be too practical and profit driven, focusing on big companies may create profit fast in the short run, but will kill business opportunities in the long run, s some small companies are actually at the beginning of development, but may grow very fast, if CM rejects these companies only because they are small, it would be difficult to obtain deals once they successfully become top companies. Also limited client list will create an operational risk, a company should not rely on several big companies to create revenue. Once an industry confronts downturn, CM would be influenced much and lose considerable business.
CM should include more company clients that may not be the top companies, but their business is growing rapidly and as great potential. And CM should expand business to other different industries to diversify client portfolio. And if they do so, better do not charge all customers with the same high-level price, CM should develop a better pricing system and set at lease three price categories to cater different clients’ needs and budget.
2. Expand customer base in terms of geographic location. CM is eager for expansion, but although its business has reached Europe, it’s still a local US company mainly covering US market.CM ignores the regions that are undergoing the fast growth: Asia and South America. These regions’ economies are developing very fast, many big and ambitious local companies definitely need internet marketing strategies to accelerate company growth.
The article does not give the reason why CM has no exposure in these regions, I personally give the suggestion that CM should look for business opportunities out of the US, obtain business especially in South American and Asia. 3. Maintain current clients CM should take active actions to maintain and strengthen current customer