Fugumobile: Setting Up a Local Digital Marketing Company in China

In 2006, two entrepreneurs founded Fugumobile Co. Ltd., a digital marketing agency based in Shanghai, China. The company grew organically in China by adapting to the evolving trends in digital marketing. In May 2021, the founders were facing a dilemma and had to choose between two options for sustainable and profitable growth of their company. The first option was to reach an extensive client base by continuing to deliver standardized services at affordable prices, which offered the company modest growth and profitability. The second option was to offer customized services at a premium price, which was more rewarding but would require recruiting experienced workers with a proven track record for selling and delivering high quality customized services, who were typically employed by large agencies and demanded significantly high salaries. The two founders had to decide which path to take.

This case is suitable for master of business administration and executive master of business administration programs in entrepreneurship and strategy courses. It can also be used in senior year strategy courses of undergraduate programs, as well as in courses that discuss growth strategies for start-ups and other organizations. The case is suited to participants who are entrepreneurs, senior executives, or strategists, especially those with geographic expansion experience.<br><br>The case covers various management domains, including digital marketing, entrepreneurship, and business growth in an international setting. It also allows students to learn about the different phases of start-up growth. The case helps students familiarize themselves with the rapid evolution of the digital ecosystem in China. Participants will also learn about the need for companies to be reactive and proactive in adopting growth strategies to reinvent themselves and ensure continuous growth. The case analyzes two different strategic directions for future growth—affordable or premium services and pricing. After working through the case and assignment questions, students will be able to do the following:<br><br><ul><li>Analyze the pros and cons of various options for operating a business in a complex digital marketing landscape like China.</li><li>Appreciate the tensions involved in decision-making by analyzing two different strategic options—standardized services at affordable prices versus customized services at premium prices.</li><li>Discuss a young company’s decisions and actions for sustainable and profitable growth.</li></ul>

• sustaining profitable growth
• standardized services
• value-added services
• affordable prices
• premium prices