4. The Industry
The Internet has changed everyone's lives. From
children to senior citizens, and corner shops to multi-national corporations,
the way people and businesses communicate and do business has changed
significantly. Despite this technology revolution, a distinct opportunity
exists in the Duluth market for InternetGurus
4.1 Industry Definition
The web development services market is
cluttered with one- and two-person operations. The advent of the Internet
resulted in a boom of individuals and small companies who entered the high-tech
world of the Internet to "ride the wave." With most individuals and
businesses either going bankrupt or just giving up, most web services companies
have fallen by the way side.
Even today, tens of thousands of
individuals and companies offer some level of web development services. However,
specific to the Duluth area, none of the services available compare to
InternetGurus.
4.2 Primary Competitors
Duluth is host to two full-service
advertising agencies that "dabble" in web development services and
two dedicated web development companies. These companies include:
Northern Communications (Advertising
Agency):
The oldest advertising agency in Duluth,
Northern Communications, is a 30-person operation that offers a complete line
of media and marketing communication services, including advertising and public
relations. Recently, Northern Communications added a three-person department to
service the web needs of its customers.
Duluth Media Experts (Advertising
Agency):
A recent competitor of Northern
Communications, Duluth Media Experts is aggressively targeting larger
advertising accounts in and around the Duluth area. The company has already
been successful in capturing two of Northern Communications' larger accounts. Duluth
Media Experts currently employs 12 full-time employees.
Web Monkeys (Web Development Company):
Web Monkeys is a start-up operation
consisting of two persons who recently graduated from the University of
Minnesota Duluth. One individual has a B.B.A. in Marketing and a B.A. in
Advertising and the other has a B.S. in Computer Science. Web Monkeys began
operations about six months ago. No client account information is known.
Media Pros (Web Development Company):
Media Pros is a one-year old, one-person
operation, started by Jeff Johnson, a former employee of Northern
Communications. It is believed that Media Pros has only one major client
(Duluth Hospital), which takes up most of Mr. Johnson's time.
4.3 Market Size
Duluth is a growing community. With a
regional population of over 180,000, and a high density of healthcare
companies, banking, and industrial clients, the city is ready for a
full-service web development company. Below are some facts about Duluth,
Minnesota (Source: www.visitduluth.com):
Physical Data:
~ Population: 86,000; within 30-mile
radius, population is 184,134.
~ Located at the westernmost tip of Lake
Superior, halfway between Minneapolis/St. Paul and the Canadian border.
~ 2,342 freshwater miles from the
Atlantic Ocean to Duluth via the Great Lakes/St. Lawrence Seaway.
~ Area: 43,067 acres.
~ Altitude: Ranges from 605 feet (at
Lake Superior’s shoreline) to 1,485 feet above sea level.
~ Terrain: City is built into a steep,
rocky cliffside; almost mountainous for the Midwest.
~ Rated by Money magazine as one
of the top four Midwestern small cities, based on livability.
Industry Data:
~ Industries include tourism,
healthcare, financial/banking, mining, paper, communications, education, and
shipping.
~ City’s harbor welcomes over 1,000
ocean-going and Great Lakes freighters annually.
~ Seaway Port Authority of Duluth
provides foreign trade zone and economic development services.
~ Interlake cargoes of iron, grain, coal
and stone combine to make this the top volume port on the Great Lakes with a
total of $250 million in annual economic impact.
~ Home to the College of St.
Scholastica, the University of Minnesota Duluth, Lake Superior Community
College, Fond du Lac Community College and across the bay, the University of
Wisconsin-Superior.
~ Regional medical center for
surrounding states and provinces.
~ Physician population of over 400; one
of every seven residents is employed in healthcare.
~ Rated first in the United States for
quality healthcare in communities of its size.
4.4 Market Growth
Duluth's population is projected to grow
25% over the next 5 to 7 years. Combine this growth with the explosion of
Internet users and the Duluth web services market is extremely attractive. Below are some
statistics on general Internet usage:
"Nearly half of non-users of the
Internet (48%) are interested in going online for at least one specific
Internet activity, indicating significant potential growth for
e-commerce."
Continental Research 6/5/2001
Overall web usage has grown 19% from
April 2000. The greatest percentage gain came in the 55-and-over demographic,
which was up 33% for the year, while the number of 18- to 24-year olds online
was up 32%. Even with those gains, though, 25- to 34-year-olds remains the
largest age group online.
Jupiter Media Metrix 5/16/2001
4.5 Customer Profile
Duluth industries include tourism,
healthcare, financial/banking, mining, paper, communications, education, and
shipping. All of these types of businesses rely on the Internet in some form or
another. Whether it's online banking or online inventory systems, the Internet
is playing an increasingly greater and more complex role in today's companies.
InternetGurus' clients will range in size from small retail operations to large
manufacturers and healthcare providers.
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