ShutterFly's ProGrowth and ProProfit - Essay Example

Shutterfly has had great commercial successes and fulfilled 12 million orders, sold 370 million prints, stored one billion consumer photos and their net revenues increased from $31.4 million in 2003 to $54.5 million to 2004 and $83.9 million in 2005. Shutterfly was also voted one among the top 500 fastest growing private companies in 2005. The company also got publicly enlisted and offered about 23.5 million shares of common stock. Shutterfly rides on the growth of the photo industry market that allows online consumers to store, share, print and edit photos for the present and future generations.

User friendly websites and increased access to the internet have been increasing the number of online photography users and photo prints have been generating revenue of $10 billion in 2005. Greeting cards, scrapbooks, calendars and other general merchandise on digital photography are some of the other revenue generating consumer products that are sold by the company. However several issues such as branding, competition, innovation and expansion, marketing strategies, profits and growth, market shares, consumer preferences have to b considered to analyse the various orientations to growth or profits.

It would be interesting to analyse whether profits or growth of a company should be brought about with two different forms of governance, one for increasing profits and other for increasing growth. Certain firms tend to give equal attention to profits and to growth and may allocate equal amount of resources to bring about profits and growth and costs, quality and time spent on PG and PP efforts would be the same (also in Armstrong and Levesque, 2002). It would be necessary to understand whether the PP and PG efforts of a company are opposed or mutually beneficial.

In certain cases, the firm would focus only on increasing profits and in certain cases the focus is on growth. With the focus on both profits and growth, there may be conflicting market orientations and strategies although this would be an interesting combination to analyse the firm's success. Roper (1999) delineated how strategy choices affect market position and business performance of firms and suggested that a firm's turnover growth and return on assets are weakly related for short-term profits.

Roper also states that firm performance also depends strongly on strategy choice, with turnover growth being particularly strategy dependent. Thus turnover growth and general profitability of a company as well as long term growth of a company would be all related to strategy choice. Even in case of Shutterfly's business analysis, the primary importance could be given to the strategy and market choices used by the company. Considering the uses of PG and PP, it would be interesting to note that when both PP and PG are allocated, executed and achieved simultaneously, they would together increase the total value of the firm.

When these models are used exclusively, then downturn in the firm's performance can lead to the use of an alternate model so the focus would be on either of the two, the PP model or the PG model and either the profits or the growth of the company would be important. In fact Han (2005) noted that the management of two paradoxical forces such as pro-growth strategy and pro-profit strategy could provide for strategic ambidexterity