Business Policy and Strategy course: Presentation of Strategic Analysis capstone project under MGMT 6800 MBA Partial Requirement Fulfillment Copyright- Maria Helga Melgar Johnson and Wales University, Providence Graduate School of Business

1. HUBSPOT, INC.
An orange in a blue ocean.
An Analysis of Strategy
Helga Melgar

2. Chapters
•Chapter 1 – The Beginning – Marketing Automation
•Chapter 2 – Web 2.0 and INBOUND
•Chapter 3 – 2006 & the birth of INBOUND
•Chapter 4 – Industry (external context)
•Chapter 5 – “Hello, we are HubSpot”
• Chapter 6 – Strategies and Competencies
Chapter 7 – Financial Analysis
• Chapter 8 – Objectives & Strategy
• Chapter 9: Value Chain and TOWS
• Chapter 10: Conclusion and Recommendations

3. Chapter 1: Once upon a time…
It is the child industry of the CRM - Customer Relationship Manager.
There was an industry called Marketing Automation.

4. What is Marketing Automation? How does it work?
What is Marketing
Automation?...in 60 seconds
How does Marketing Automation
Work?...in 60 seconds

5. Chapter 2: WEB 2.0 and the birth of INBOUND
Internet marketing changed.

6. No more interruption. Permission-based.

7. Chapter 3: 2006 - The Birth of INBOUND
INBOUND (term) was created.
INBOUND industry was named.
HUBSPOT, INC. was born
INBOUND marketing platform was launched

8. The Inbound Philosophy and Platform
Inbound Experience:
A Philosophy (Concept)
Inbound: A Platform (MAP)
Warning: Contains a lot of marketing jargon.

9. Chapter 4: Industry (external context)
Product/Software reference: Marketing Automation Platform (MAP)
Birth of industry: 1995 –Unica / 2002- Eloqua*
Number of Proprietary MAPS : 89
Market segments: Small, Small-Midsize, Mid-size, Enterprise
Market size: 142,700 businesses have use marketing automation software
Total annual industry value: $1.62 billion
Leading Player : Across segments- HubSpot, Inc. (36.3%)
Category leader: Mid-size: HubSpot, Inc.
Category leader: Enterprise – Adobe Marketing Cloud
Industry Behavior: Acquisitions
Salesforce Pardot & ExactTarget, Oracle Eloqua, IBM Silverpop, Adobe Neolane, Vista Equity
Partners Marketo
*History and Timeline of Marketing Automation

10. External context
Life Cycle: Growth Stage (Rising Tide)
Exponential growth - 1.27% (ave. annual growth rate)
= $225M to $1.65B (2010-2014)
Expected : US -$3.65 billion (2014) to $5.5 billion (2019) - CAGR of 8.55% *
International- $3.86B (2016) | Forecast: $8.61B (2021) – CAGR >8.0%**
Market Penetration – proportionate to revenue size
25% Fortune 500 companies
76% SaaS companies
Porter’s Five Forces
Rivalry within Industry – High | Barriers to Entry – Moderate
Supplier Influence– Low | Customer Influence – High
Threat of Substitutes – Low
* History of Marketing Automation and Software
** Marketing Automation Software Market Size, 2017)

11. Demand Drivers
Resulting from--
Social media interactions (ever expanding platforms) | platform ease-of-use |
internet access accessibility | companies seeking increased revenue & brand
preference | consumer permission | mergers and acquisitions = product
integration | new C-suite CMT role | Decrease in acquisition cost (increased
players) | worldwide content marketing trends | global integration pushing
product functionalities.
Increase in demand: digital marketing and use of marketing
automation tool *

12. Top MAPs Across All Segments

13. Position of Rivals in the Industry

14. Chapter 5: “Hello, our name is HubSpot”
Value Proposition
To provide the best-in-class marketing automation product for
inbound marketing, scalable with business growth, developed by
a company that speaks the marketer’s lingo and wears the
marketer’s shoes.

15. Owning INBOUND: Sales & Marketing Ecosystem

16. Market Footprint

17. Inside HubSpot: Funding and Leadership
2006-2013 - $86M Venture Capital
2014 IPO - $125M
$25 per share
Today - Ave. $67 per share
Current Market Capitalization: $2B
Brian Halligan – CEO
Venture capitalist, Consultant, Sales VP
Dharmesh Shash – CTO
Blogger, Entrepreneur, Angel investor
Sloane School of Business, MIT

18. Vision, Mission, and the “Culture Code”
VISION: “To make the world go inbound.”
MISSION: “To transform how organizations attract, engage and delight their customers

19. Organizational Structure

20. Chapter 6: Strategies, Resources, Capabilities & Competencies
Business Level
Blue ocean strategy – created its own space with INBOUND concept |
discipline
Customer value: Distinctiveness with Focused Differentiation.
Corporate Level
Low level, dominant business, product diversification mode with
acquisitions for product innovation.
International Strategy
Multi-domestic, wholly owned subsidiary

21. Resources, Capabilities & Competencies
Analysis of Resources
Physical – Strong | Organizational – Strong | Technological – Strong
Human Assets & Intellectual Capital – Strong | Innovation – Strong
Brands, Image & Reputation – Strong | Relationships – Strong
Company Culture & Incentive – Strong | Financials – Weak
Capabilities
Human Resources, Management, Research & Development, Product
engineering, Sales & Marketing
Sustainable competencies – Strong (valuable, rare, costly-to-imitate, non-substitutable)
Synergistic combination of sales & marketing savvy, management and all
strong capabilities.

22. Chapter 7: Financial Analysis - Key Ratios and Data

23. Chapter 8: Objective and Strategy
To sustain business growth by leveraging its inbound go-to
market approach and network of marketing agencies to keep
growing domestic business, increase revenue per existing
customer, keep expanding internationally, continue to innovate
and expand the platform, and selectively pursue acquisitions.
Strategy: Continue growth.

24. Recent Moves
Product Diversification
Second EMEA Office
Education Program – Colleges and Universities
Application integration

25. Chapter 9: Value Chain & TOWS Analysis
HubSpot, Inc. Value Chain

26. TOWS Analysis

27. Recommended: Maxi-Maxi (Strengths & Opportunities)
MAXI-MAXI
Continue thought leadership positioning.
Use core product to develop new users – marketing freemium.
Leverage intellectual capital and innovation – Marketing 2.0 product road map.
Explore Helpdesk or Customer service platform to complete and reinforce Growth Stack.
Anticipate mid-market’s new preferred social platform – start building.
Create brand extension to penetrate nonprofit segment (VERTICAL market via brand
strength, intellectual capital, relationship).
Leverage agency network for ideation of product innovations and focused marketing
strategies.
Explore opportunity for a permanent CSR initiative vs. tactical charitable donations.

28. Chapter 10: Conclusion and Recommendation
Growth pursuit: sound strategy
Customer value through differentiation = excellent
Above average returns = needs improvement
Slow down on international expansion. Generate returns first.
Deploy more funding to R&D, market to innovation (ref. Apple)
Rapid growth can burn through resources quickly.

29. Thank you.
The End