Strategy Formulation E types
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E-Types is a graphic design consultancy founded in 1997 in Copenhagen by a team of young designers. It has since grown to 50 employees. A PEST analysis found the industry has low risks politically and economically due to a stable government and access to the Eurozone. A five forces analysis found competitive rivalry is low as E-Types is the main producer and faces moderate threats of substitution. Strengths include a large portfolio and innovation, while weaknesses include a lack of support for conservative design and cash flow issues. Long-term strategies include becoming an multinational corporation focused on local cultures and building strong brand equity.
Strategy Formulation E types
- 2. ABOUT THE FIRM E-Types was founded in Vesterbro, Copenhagen, in 1997 by a team of young graphic designers. Over the past decade E-Types has developed from a business of five employees into a consultancy of 50 strategists, designers and account managers. In 2010 E-Types became part of E-Types Group. Founded by - Camilla Frederiksen Jens Kajus Jonas Hecksher Mads Elleberg Petersen and others
- 3. INDUSTRY ATTRACTIVENESS AND PEST Political - Economic - Social - Technical - Extremely Stable with no influence or license required from the government 8th most strongest free economy market with access to Eurozone makes it have a Strong economic backing Catering to non conservative customers has a risk when growing as a startup. Moderate risk There are no specific technical challenges for designers except good human resource. Low risk Industry attractiveness overall – With a low overall risk and strong economic and political backings , investing in this startup can be a lucrative opportunity
- 4. 5 FORCES FRAMEWORK Competitiv e Rivalry Bargaining power of suppliers 1. Is low because they are the main producer and do not depend on any one else for raw materials Threat of Substitutes 1. Is moderate as it requires brand recognition 2. Lack of enough skilled human capital mitigates it. Threat of New Entry 1.Difficult as it is a capital intensive business with human resources being at it’s core vs. tangential and intangetial assets Buyer Power 1. High risk as there are many alternative design agencies for buyers to choose 2. Also many support a conservative portfolio
- 5. SWOT & VRIN FRAMEWORK STRENGTHS 1.Huge portfolio 2. Innovation in design WEAKNESS 1. No support for conservative design 2. Lack of cash flow OPPORTUNITY 1. Creation of brand equity 2. Rapid scalability by startup THREATS 1. Immediate copies of design 2. Poaching of human resources Resource Value Rarity Costly to Imitate Organized Specialized Labour High – Adds to service Low No – Can be changed Yes Brand Very High High Yes – Needs lot of investment Yes – creates consumer value Innovation High Low Yes – Needs skilled resource Yes
- 6. STRATEGY FORMULATION – SHORT & MEDIUM For the short term strategy management should focus on a growth strategy with differentiation at it’s core It should stick with it’s core values (of being edgy) in the early phase as employees provide the core of it’s support and it has an homogenous culture to move ahead The novo nordisk project was a big success and showcased the innovation of the team Medium term strategy should be branching out with multiple product lines with a stabilization strategy focusing on hyperdifferentiation with brands like Vipp Also provide conservative lines under a different label to increase cash flow and cover a larger base of consumers
- 7. STRATEGY FORMULATION - LONG Long term strategy should focus on having multiple streams of revenue Can be established as an MNC focusing and adapting to local cultures Should have a moderate cash buffer to tide over unprecedented scenarios and have cash for attracting good resources Should create brand equity which makes it very difficult for new entrants to substitute the brand Create a culture which encompasses a central idea of being edgy at it’s core.