Input for MSc Dissertation at University of Leeds

Posted on 29 April, 2018 by Administrator

To clarify, these questions are about the UK educational technology market for digital simulation games and Simbound's internationalisation into it. The answers were used by a University of Leeds Student for his 2017 Dissertation who sought to research ways in which Simbound could operate in the UK Market of services in the context of Brexit. However, previous internationalisation strategies and other locations the firm operate in are highly relevant to this study also.

Uk Flag

Porter's Five Forces

Do you think there is a threat of new entrants into the UK market? Yes 

If so who are they? Stukent How many potential new entrants are there? 1-2

What is your perceived intensity of this threat? Low Intensity

In your opinion, are there any substitute products available in the UK market that would take the place of digital simulation games? Not that many of which I know of: Internships, Digital Marketing Workshops,The Digital Workshop series of resources from Google. Stukent Mimic (copycat product).

Are there many of these substitutes and do they present a cost saving to the customer?  Simbound is more cost-friendly and efficient in terms of learning outcomes than most other methods or resources out there. Prices for workshops tend to hover around few hundred GBP while the price for a Simbound license is the equivalent of approx. 40 GBP

To what extent do they perform the same task as Simbound's game? Receiving training on real digital marketing solutions and services is desirable but it takes a long time to learn the specifics of each software and the multitude of situations to which they apply. Plus you have to cope with potential risks such as loss of financial resources and brand damage.When it comes to the direct competitor (Stukent) there is sufficient amount of information online, which shows that it performs similar or the same operations.

In terms of the relationship with your customers, which party do you believe has the more powerful bargaining position? It depends from case to case, but most of the time Simbound is happy to serve all kinds of customers. Sometimes even those which have manifested unreasonable demands.

Do you believe customers in the UK have greater bargaining power than those from other locations?  I would say that UK customers do not differ in any major way when it comes to their bargaining power.  This conclusion is, however, a result of very little interaction with the market.

Do all UK customers have the same bargaining power, if not how/why? I believe that some of the more renowned universities would be able to have their say more often when choosing to negotiate terms, however it really depends on many factors: the general context, the manner in which the request is made, the background of the person who is negotiating and so on. 

What is the concentration or number of customers in relation to the number of firms offering similar products? Probably around 150 Universities split between Simbound and Stukent. Most clients are in the USA.

Does Simbound have any suppliers for its products or essential services that help produce the product?  No, almost all of the simulation was built using non-proprietary technologies and services. The requirements for creating the content have not warranted any special kinds of services and the company is not dependent on one particular supplier.

If so, what is the bargaining supplier of these suppliers? N/A

Are they highly diversified, are there many of them and do you have high potential switching costs? No to each question.

How many firms currently operate in the UK market for digital marketing simulation games? 2 Are these firms comparable in size or not? Yes

How quickly is the market growing in your opinion and are there any barriers to entering and exiting it? The Market is growing at a very good rate, helped by the launch of new digital marketing courses and the need for interactive and alternative learning resources. E-commerce and E-marketing are now regarded as core operations in all sorts of companies from startups to corporations. This will only increase the need for more education in the field and more sophisticated technology.

Overall, how would assess the intensity of rivalry between existing competitors in the UK market? Low intensity

Integration-Responsiveness Model

Does Simbound have international operations at present outside Romania? Yes, ever since 2012 Simbound has been selling into the worldwide market of services.

Could you list these operations, the date of their establishment, the number of staff employed and the investment in each location? Simbound operates on a flexible, performance-based agreement with all its international partners. We have contacts in France, the Netherlands, Portugal and Kenya. All other markets are being served out of Romania (or wherever I find myself in). As such there is no investment being made upfront and partners are free to decide how much they want to invest in their commercialization efforts.

How are these operations structured? Content partners are responsible in contacting existing and potential future clients while Simbound is managing the administration of the simulation. Are they all structured in the same way? For the most part, yes. We offer a standard agreement and try to adapt to each of the market conditions.  

What relationship do you believe each operation has with the headquarters in Romania? The relationships are very good, and we see increasing commitment and levels of activity from each operation that we directly and repeatedly interact with.

Which operation has more power and influence in the organisation? I don’t think there is one that stands out in this way.

With regards to your product, do you offer customers modifications according to their tastes and needs? This depends on the requirements. We have created custom simulation scenarios in the past for clients. The product is very versatile, it can adapt to numerous situations and markets.

Do you offer different products in different locations?

No, right now Simbound is offered as a unitary experience with the option to select different settings (language) and content (simulation scenarios).

Have you encountered a demand for localised products in your international operations to date? Yes, mostly small requirements (such as currency in the simulation or types of products to be advertised in the simulation).

What has your experience been in the UK market in terms of local demands and needs of customers? I have not had any special requirements from UK clients to date. UK customers particularly appear to be more risk-averse, some of them have tried on pilot tests before taking the simulation to be used in an extended course environment

Have you altered your products as a result? No

Does the UK based operation based provide any operational support, knowledge or expertise to rest of the business? If so what is the relationship between the UK operation, other foreign locations and headquarters? I would say the input coming out from the UK has been negligible also because of the low level of activity Simbound has experienced there. I think in the future, given we reach a satisfactory level of client interest, Simbound will be able to rely on more than just simple feedback and will seek expertise in core and non-core functional areas from UK based firms and individuals.

Concerning the internal pressures facing the firm, to what extent are products standardised globally? Simbound is offered as a unitary, always available service to global clients.

Does this also occur in the UK market? Yes

How are products standardised and does the firm have any explicit limitations on customisation? Simbound as a product achieves a high level of standardisation, which can explain, in part, the high level of adoption of its product in many different countries around the world. Limits to customisation have to include internal resources available to execute customisation.

What are the main drivers behind the firm intending to standardise its products? The experience is already standardised but can become a challenge as we operate into more geographies and face new requirements. 

To what extent are services, procedures and processes standardised globally? The website is the same version for every geography, hence no need for standardisation. Each Simbound Instructor is free to adapt the experience to his/her requirements and they can rely on a global knowledge base

Does this also occur in the UK market? Yes

How are activities standardised and does the firm have any explicit limitations on localisation? The website is the same version for every geography, hence there is no localization. The simulation content is available in a few languages.

What are the main drivers behind the firm intending to standardise its operational activities? Higher returns, the need to set up procedures for future employees.

Additional mentions:

Simbound has been built from day 1 for the global market. Many companies launch products aimed at a particular audience or customer group only to struggle with customisation later. I think software products in particular should be developed for a global audience and try to retain as much as possible this global functionality with very little customization to be added later on.  One day Innovative services will allow customers to build their own functionality and direct their customer experience as opposed to the company having to do that for them.

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