CASE STUDY 6
Potion Inc.: Outsourcing for the Future
SUMMARY AND AUTHOR’S NOTE
In 2005, Andrew and Victor were working together at a small Internet startup that was working
on several projects—data entry, website design, and market research—that could not be
effective technology development and support to small and midsized companies.
Andrew and Victor also realized that the outsourcing techniques and resources they had
developed could be applied outside of small and midsized company technology development.
They took special notice of a need for cost effective, on demand graphics and digital production
solutions in the graphic design industry and the magazine and publishing sector.
While the outsourcing industry continues to grow and Potion is well positioned within it, there
are ongoing challenges that still must be overcome. Poor project execution and unsatisfactory
results continue to cause problems throughout the industry. Although Potion’s implementation of
OPUS has streamlined project management and largely eliminated communication woes, the
company must still combat the image that outsourcing can lead to quality problems. Within this
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WHERE TO USE THIS CASE
• Chapter 6: Use to discuss the implications of outsourcing for new product development.
• Chapter 7: Use to discuss the use of independent contractors and outsourcing in startup.
• Chapter 12: Use to discuss outsourcing as part of the organizational structure of a new
venture.
• Chapter 13: Use to discuss the supply chain and value of outsourcing.
CASE ANALYSIS
This case offers the opportunity to examine offshoring and outsourcing from a variety of angles.
Ask students to share their views on offshoring. Point out stereotypes that emerge from their
Challenges of Offshoring
A discussion of stereotypes leads into a broader conversation on the challenges of offshoring in
Marketing Outsourcing
Marketing plays a key role in changing stereotypes and promoting the benefits of outsourcing,
particularly in new market segments. Discuss effective marketing strategies for educating
companies on the OPUS system and highlighting the benefits of outsourcing. Stereotypes about
the outsourcing industry limit the number of companies that participate in the market and prevent
105 Case 6: Potion Inc.
Changes in the Industry
Potion has a number of advantages in the current market. Most importantly, the OPUS interface
is unique to the industry. While some competitors have elements of the system in place, none
have all the pieces integrated into one platform. Another key selling point for Potion is its
physical presence in the U.S. Customers like the ease of working with an American company
with convenient business hours and no language barrier.
DISCUSSION QUESTIONS
1. Why was Potion started?
Potion was started because the two entrepreneurs were unable to find an existing solution
2. Why has Potion been successful to date?
By recognizing opportunities outside of their initial market, Andrew and Victor were able
to seek out a group of customers that had not previously been targeted. Since many
3. What are the industry problems that Potion faces?
Many of the problems that Potion faces are a result of industry challenges and the
company’s dependency on overcoming them. Offshoring has become increasingly
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4. How has marketing played a role in the success of the company?
The Potion team has used marketing to help spread the message that they are different from
the competition and to educate users on how to overcome the problems that persist the