In this market report, analysts Johan Cisneros and Emil Erbing evaluate the role and impact of Digitization. The report discusses the effect that a more demanding consumer base coupled with exponential technology advances will have on companies and organisations. The report will further analyze two relevant markets in regards to digitization, namely IT-consulting and E-health. This report is written in English. If you want to get in touch with the analysts, please send an email to analysgruppen@linclund.com. Please click here or on the picture in order to access the full report.

Case Summary:

  • Digitization has spawned new, exciting markets with Sweden being at the forefront in the digitized age.
  • The IT-consulting market is well-positioned for further growth as there’s steadily growing demand for their services, which is projected to grow 10% to 2019E.
  • E-health is a market that will experience heavy growth in the near future and the global market is projected to reach 244 billion USD 2021 with a CAGR of 14.56%.

Digitization is changing how businesses and organizations operate.

This trend is forcing organizations and businesses to restructure their business model in order to accommodate for a more demanding consumer base. Real-life studies illustrate how EBIT margins can be improved in different sectors from what digitization can offer, where generations and retail compose largest gains. Digitization will potentially impact every market that exists today and spawn several new ones. The winners will act now, and build a strategic advantage that leaves their counterparts wondering what happened.

IT-consulting helps companies and organizations to correctly align their business model with future market trends.

Swedish actors are well positioned as the degree of digitization can be measured with data measurements, such as smartphone penetration and NRI (Network readiness index), both of which place Sweden in top 3 globally. In Sweden, the most attractive customer bases are located in the public sector, due to higher spending on digitized infrastructure, and banking, with increasing regulations and demanding digitized banking solutions. As this is occurring, consultants B3IT Management, KnowIT and Acando are well positioned and have a great exposure compared to other actors in the consultancy market. KnowIT also has high levels of net recruitment, which is crucial in the consultancy market to further increase revenue. High levels of growth in mind as well as improved margins, indicate an upside of 28% 2019E relative to KnowIT’s current valuation.

E-health expansion requires developed digital infrastructure and familiarity.

Not all countries possess the digital infrastructure required for the change and revolution within the health sector. This is essential for the execution, awareness and social tolerances for a change in the healthcare system. Doro is especially well-positioned for the potential market that can come to be. Its cost efficiency is what creates the improved position compared to Getinge, as the implementation barriers and market potential are estimated to be similar. A discounted cash flow analysis indicates an upside of 40.6% relative to Doro’s current valuation.

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