The aim of WRSX is to become a specialist provider in order to improve the competition in the business processing. As a specialist provider, the company can provide more service to the existing customers and attract more new customers for the company. To diversify and move into foreign markets, a variety of considerations ought to be put in place. The company will use tools and techniques to assess foreign markets as well as succeed in creating a huge market share back home. The success of any company will be based on strategic positioning and feasibility study capability.
The company WRSX expects to create quality and a variety of advertising and marketing communications to support global client targets. This company requires increased creativity and innovation which will lead to more development to the company. The aim of the company is to become a specialist provider in order to improve the competition in the business processing. As a specialist provider, the company can provide more service to the existing customers and attract more new customers for the company.
The company is quoted in the London stock exchange but has been underperforming in the last 18 months. Goodwill and positive reputation is extremely essential for a company. So WRSX should keep an outstanding reputation in this area and let the clients know it is a wise choice when they choose WRSX to do marketing for them. It also has to improve the relationship with the suppliers because now WRSX does not have a healthy relationship with suppliers which will bring the negative influences of the channel for the resources.
Moreover, skilled managers will bring the principal function for the company so appointing skilled managers to the suitable position will let these managers bring the positive effects on the company. WRSX also aim to build a favourable business environment because it will bring more external advantages for business with a good environment. Plus, WRSX should use the resources efficiently because wasting of resources will cause more cost for the company. So WRSX should also consider more about the efficiently using of resources.
Political Owing to the economic recession affecting the highly developed economies, WRSX would face many risks from the effects of global regional, national, economic and political conditions. Political can be treated as the action of the government which will influence the business situation for the company. Governments are working hard to avoid the downtown of the economies and protect the business of the company. Recent conflicts and terrorist activities depict the rising gap between Western nations and some of the Muslim population.
Westerners show little attempt to tolerate the Muslim mind and assume they have similar value systems and beliefs. Economical There is a sustained growth in the world economy with the United States globally accounting for 50% of income obtained from advertising and media communications. In the past two years, growth forecasts rose by 4%. However, medium and long-term growth prospects are highly risky in the years to come, affecting client businesses and WRSX group. The likely risks are losing existing clients, failure to attract new clients, fluctuations in economic growth rates, interest and currency exchange rates.
Others are changes in legal and regulatory environment of media and marketing communications sector. In addition, other predictions read a rise in oil prices and consumer debt in the US and fall of the housing market interest rates in the UK. In the long-term, consumerism in china and India is expected to surpass the decline in revenues of the US and Western Europe. Chinas population stands at between 1. 3 and 1. 5 million and at least 200 million people afford goods and services from WSRX group. In china, there are over 500 million mobile phone subscribers, many of which are in China mobile while India has stimulated its economy to about three to four times the Americas. Africa has increased purchasing power of FMCG brands especially Egypt and northern African countries. Social Consumer behaviour of US and Western Europe expects domination of retirees in consumer and service demand. They are keen on spending their kinships’ inheritance. Graduate age consumers will show a shift in work life balance, quality of work and taking the time to help communities. Governments are also focused on stimulating birth rates. Japan also experiences decline youth and overall population.
CSR is hugely essential for the company’s reputation, so the company will promote the CSR policies through investment in education and other social projects and investment in reduction of the carbon footprint of the business through initiatives. Technological The Internet brings prestige brands to an enormous present day audience, previously unaware of the goings on in the world. Similarly, multi-nationals especially in the IT industries, usurp full advantages global recruitment ability and transfers global graduate trainees around the world to meet business demands.
In the US market, it owns modern technology and digital media for the company. Internet based market research is one of the latest innovations. With using these modern technological markets, WRSX can keep more clients and owns more clients globally. Companies are switching from traditional advertising like TV to internet and mobile phones. Environmental WRSX make investment in reduction of carbon footprint of the business through initiatives such as more heat-efficient buildings, ability to generate their own electricity, recycling if waste, reduction in business travel etc. and through improving theses elements to keep a suitable environment. Many WRSX client companies, the packaging amount and recycle-ability are becoming a more significant issue year on year. Legal Western Europe and the US have strict employment laws designed to protect employees. WRSX client companies are transferring their manufacturing concerns outside their geographic areas so as to maintain the labor force numeric flexibility and avert costly employment litigation. On the contrary, it can backfire if employment practices impacting on health and safety or child labor is publicized.
It is anticipated that WRSX uses the introduced data protection law to contain the legality of the company by using strict employment laws to protect employees. Protected employees become motivated and increase work efficiency. Porter’s Five Forces: If considering Porter’s Five Forces, it owns five parts of it that consist of new entrance threat, buyer power, supplier power, substitute threat and rivalry. Threat of new entrants This area is remarkably high and the rate is growing. Many new companies enter this area in order to make a profit. So it owns high competition.
Many companies especially in India and china are investing in media and advertising communications but are yet to bet already established companies like WRSX. They will face difficulties in swaying the loyalties and customer retention prowess of WRSX. Buyer power It is medium because as a media company the type of customer is fixed and the power is now have the trend of decreasing. Purchasing power of US and Western Europe is unusually high although china and India, with a massive population are catching up by 4%. Supplier power It is low and now also gets a trend of decreasing.
The company is looking for suppliers with media buying effectiveness, those who can exploit the synergies and deliver economies of scale. In addition, they should posses effective production buying and management of suppliers or their spending control. Substitute threat TV and road shows still prove as ready substitutes for mobile phones and internet. It is exceptionally high and increasing because of the high competition of this area. Without high competition other companies will easily replace you and own the markets. Rivalry It is extremely high and the competition of this area is unusually violent.
There are a number of capable competitors from India and china like china mobile. These competitors offer equally attractive products and services to chines and Indian consumers. So, WRSX group most likely has little power in the situation, since suppliers and buyers goes elsewhere if they don’t get a fair deal from WRSX. Strategic Capability (SWOT Analysis) Internal Analysis Strengths: In the management of financial risk, WRSX performs well in benchmark surveys. It performs highly on corporate social responsibility (CSR) according to previous surveys showing high scores for WRSX with regard to ethical stance and the social profile i.e. social contribution to the communities in which it trades. Client attraction and retention is a plus for the company as it tops in its market research capability and understanding of market segments and channels. Similarly, it scores highly in terms of its creativity and innovation. Weaknesses First of all, WRSX is bedevilled by a recent corruption scandal that damaged the reputation score. It has weak organisational structure leads to lack of strategic focus and drift. The Group does not manage well in Entrepreneurial capability and management of organic growth and Leadership Capability.
The Management of Risk has dropped recently due to sustained investment in acquisitions and the corruption of Raphael Roux in Paris in few years ago. Also, it doesn’t have a good relationship with the suppliers. There is low score for corporate governance for WRSX. WRSX performs badly in management of production buying, building and exploitation of healthy relationships with suppliers. It performs badly in synergies it achieves by exploiting economies of scale across the Group. It also fails to employ its Group buying power to procure media for clients.
The company has immense opportunities Asia, Middle East and Africa. The company should take advantage and focus on developing digital technologies as the digital media has been growing fast over the past ten years in advertising. Moreover, it should expand diversification into brand identity and digital media. The size and power of the American market of more than 300 million people remains homogeneous market as opposed to the European Union heterogeneous markets. Finally, owing to technological and digital media strength, China challenges the US in terms of market size and power in the future.
So it is worth investing in china. Threats WRSX currently faces massive emergence of channels that provide specializing service to common interest group or demographic profile. The big problem is that a company might switch market budget away from tradition media such as TV even though there are many opportunities. Also, internal communications within large multi-nationals and how they enhance the corporate brand is becoming more essential as an issue and demanding the expertise of companies in the marketing communications sector.
There are low-cost marketing service providers from Eastern Europe or Asia Pacific that concentrate on growth instead of concentrating on value, and what WRSX can do to take advantage of the growth of digital media. Furthermore, WRSX is not one of the top for specialist provider of advertising services and we are not global player. The recent scandal destroys the value of our group substantially, which leads to losing customers or failing to attract customers. Influence of History and Culture From the WRSX profile, the company has been developed through mergers and acquisition from New York, Paris and London.
Due to differing structures before merging, the company can provide a range of various businesses units with a great deal of autonomy and thus adds more effectiveness to the services offered to customers. The company already has a great history of diversification into UK and the US making it easier to understand what local customers in these regions need as well as evoking customer excellence. Westcott Waldron Morrissey Vickers was one of the new-wave creative London agencies of the late 1970’s. Silberstein & Lord dates had a reputation of highly creative boutique and they attracted some of the top Fortune 500 companies as clients.
RTB had a reputation of producing highly creative award winning in the French tradition. WRSX also need to review strategies with a higher proportion of retirement age in USA and changes in consumer behaviour and lifestyle. These has aided in the development of a larger consumer market in Asia Pacific, Eastern Europe and Africa thus essential to study the consumer behaviour in the Muslim world. Conclusion WRSX is yet to become an international player by maintaining its position in US market as a priority, especially concerning of the demography changes in USA and consumer behaviour changes in Asia Pacific, Eastern Europe and Africa.
Besides, it has to improve on its eentrepreneurial capability, management of organic growth, leadership capability and risk management. The company should concentrate on managing growth instead of managing growth to compete against low-cost service providers from Eastern Europe or Asia Pacific. The government takes action to avoid downtown and protect the business of the company when the economical situation of a company is not very good owing to negative world economy. CSR report is good as well as the financial report to show that these issues have been noticed by the company.
The internet based market is an advantage to connect with clients globally. The company needs to increase the environment of the workplace to keep a suitable environment and use employment laws to protect employees. Of course, competition should be kept low from efforts of competing businesses while markets should help to increase the clients and attract more valuable clients. Phase 2 WRSX strategic choices for growth and creation of shareholder value The way of doing business has recently changed, more so due recurrent recessions that have occurred over the past decade.
In addition to that, competition in both local and international market has remarkably increased rendering traditional ways of doing business totally invalid. Stakeholders are now regarded as the lifeblood of an organization as the company’s survival is directly dependent on them. As such, companies are beginning to refocus on growth as well as creating value for their stakeholders. Delivering profitable growth and creating value for stakeholders is however, a major challenge for many companies in the current volatile world of business.
Customer behavior and needs have changed substantially; they are looking for more distinctive, tailored products and services, are more interested in value-oriented offers and they have become more price sensitive. Even so, companies have a range of strategic choices to choose from in order to maintain their competitive edge. WRSX will apply the strategies discussed below to ensure sustainable profitable growth and creation of maximum value for its stakeholders. Leadership strategy Strong leaders are becoming increasingly important with the increasing volatility and uncertainty in the world as well the need to make difficult decisions.
To ensure rapid response to changing competitive circumstances and customer needs, managers need to empower front line employees by making them critical decision makers so that they can be held accountable for results. In more robust definitions, leadership includes both formal and informal leaders. Practical leadership across organizations rarely occurs in the tidy and neat as presented in the organizational chart. Collaboration, influence and communication occur across, up and down the organization as though the organizational chart did not exist.
Bleak and Robert (2009) state that having an organizational chart where all leadership positions are filled is not the surest way to become successful. What matters is the way people relate with each other within the organizational structure. A comprehensive leadership strategy states clearly what kind of leaders are required, behaving with what fashion, with what skills and how many leaders are required to spur the company to success. It has been noted that WRSX operates well below average in terms of strategic leadership capability as compared to other companies in the industry (WRSX 2008).
Essentially, WRSX should apply a leadership strategy based on a thorough analysis of the prevailing situation and informed insight to the future of the company. The strategy will therefore, attempt to reconcile the gap between the desired future and current situation. Strategic leadership basically entails managing strategy-making procedures in order to increase the performance of the company hence increase the value of the company owners or shareholders. Leaders are the lynchpin in these processes as they are responsible for the formulation of strategies to drive good performance.
Wal-Mart is a compelling example of the important role played managers in ensuring success. Sam Walton and his managers were solely responsible for choosing of strategies that made Wal-Mart so successful. By way of thorough recruitment procedures, WRSX should ensure it has selected all its managers including the corporate level, business level and functional level who uphold a high degree of all the characteristics of strategic leaders: emotional intelligence, astute use of power, ability to empower and delegate, informed, committed, articulate business models, consistent, eloquent and visionary.
Technological strategies and their continuous improvement For many years, technology has been viewed as the cornerstone of successful implementation of business strategies. In today’s world of business however, technology occurs at the intersection of the overall processing and marketing process and thus can be termed as an input to the strategy and not just an after-the-fact enabler. With this knowledge, companies across the board intending to take up the initiative in the highly competitive environment; that is, establishing technology-driven business strategy. There are many positive implications of using technology-driven strategy.
First, technology is undoubtedly a source of growth and this has been widely accepted by leading Multinational Corporation such as IBM, Motorola and Cisco. Second, technology is prompted by sufficient know-how which implies that the company has wealth of highly innovative and knowledgeable work force. As such, a company needs to apply a unique market strategy factored in by technology and not necessarily application of new technology breakthroughs. Finally, the competitive advantage afforded by technology is short lived which implies that a company has to be in constant research to keep in pace with rapid changes in technology.
This in turn means that the company remains nourished with new technologies and developments thus remains relevant in the competitive market (Orlikowski 2000). The major concern for WRSX is how to use technology to drive growth and stakeholder’s value. Technology within WRSX should be perceived as a core input rather than an enabler of business strategies. In addition, the company will appoint or hire a research team to discover applicable technological innovations and assess their potential implications towards the business.
Through the work of a research team, Boston Coach has reported a 10% increase in sales and simultaneous increase in productivity by 10-20% (IBM Corporation 2004). In order to explore the full potential of technology, WRSX will also revise its technological contexts and strategies regularly. Clearly, technology change rapidly and therefore, companies ought to revise and manage technological strategies in a continuous manner in order to proactively take advantage of technology-driven markets. With the insight that technology is rapidly changing, WRSX will have a diversified portfolio of capabilities- emerging technologies and sustaining technologies. Moreover, technology within WRSX will focus on customer and stakeholders priorities so as to maximize their value. Technology will not be exclusively based on internal efficiencies but will concentrate on needs and problems of their customers and try to identify technologies and business models that will impact the particular issues.
A search through the corporate sites of big companies in the world indicates that social responsibility is a major building block to a profitable organization. Green practices are gaining popularity as potential tools for marketing as they indicate a company’s engagement and concern towards the environment. Global CXO (2012) states that sustainable practices are critical in terms of business growth perspective. According to research, organizations resort to eco-friendly actions to comply with regulations, meet customer demands and improve operational efficiency.
Even so, most companies are inhibited from participating in environmentally friendly practices due to the perceived high costs involves. Nevertheless, it should be understood that cutting carbon cost basically means reduction of a significant proportion of wastes during production; which implies efficiencies. Efficiencies can be converted to cost savings which can serve in expansions and growth. Carnelley (2012) states that WRSX clients are becoming more and more interested about the ability of the company to package its offers in a way that reduces environmental footprint.
As a way of boosting environmental responsibility, WRSX will become part of corporate innovation strategy and more specifically green strategies. This means that it will comply with both local and international regulations governing environmental issues. IT and communication companies are on the lime light due to the amount of energy consumed in their facilities. IT solutions that are more environmentally friendly and consume less energy therefore, should be priority for companies. WRSX will establish an organizational framework to stimulate green practices.
Global CXO (2012) posits that the framework can only work through a strong executive leadership which demonstrates the ability to make decisions the company wants now and in the future. Going global Developing areas such as Eastern Europe and Southern Asia are fundamental to the growth of WRSX (Carnelley 2012). Khanna et al (2000) maintain that organic growth of companies can only be achieved via investments and expansions into foreign and emergent markets where the rate of growth is rapid and promising. China, for example should be given priority during WRSX’s plan to invest globally.
This is because China has multiple opportunities for growth in addition to high capacity and lower costs of operations. Besides that, emergent markets are resilient and customers in those areas are value-oriented. Thus, competitors in such markets tend to pursue technological capabilities to strengthen their competitive edge. This represents a prime opportunity for WRSX to reduce costs, enhance efficiency and improve production and hence focus on its core business. Market sensing is important during global expansion due to the growing demand and changing consumer needs in emergent markets.
Effective market sensing basically entails comprehensive and sophisticated analysis of what customers in the prospective market need as well as their behavior and also what competitors are doing (Borchradt et al 2012). To achieve this objective, WRSX will require a proactive marketing team to provide timely, accurate and deeper insights into the desired market. Other cheaper and convenient ways that WRSX can employ are the social networking sites such as Twitter and Facebook. Companies are now using social networks to understand their customer needs thus improve their product or service offering.
Conclusion Sustained profitable growth indeed creates value for stakeholders as they are able to get returns for their investment. Although economies are much better in comparison to the past few years, growth reaching sustained growth does not come easily. Strategic leadership is a vital tool that WRSX will use to drive its growth since such leaders will empower all other employees to reach target. In addition, it will invest in technological innovations and continuous improvement of these technologies to remain at par with changing market trends.
Greener practices have also been identified as a viable opportunity for WRSX’s growth as this portrays the company’s commitment and engagement in environmental affairs. Development to foreign and emergent markets is another sure way to sustain the growth of WRSX. WRSX should ensure integration of all these strategic choices in order to create value for its shareholders through sustained growth. Phase 3 First Board Meeting Market opportunity in China. According to the IMF, China is currently one of the world’s biggest economies, second largest to be exact.
With a population of over one billion people, it is a vast market place for advertisement, social and public relations services. It is estimated that more than one hundred million Chinese people (especially the youth) access their data and advertisements online (IMF 2011). The potential of business in china is immense. However, there are many players with massive financial muscle who are also interested in the business in this region. As such WRSX has to be careful in what strategy to implement. WRSX can ask Victor Xao to take on the responsibility for assessing the China market.
With his vast experience, the assessment of the cultural and strategic fit between a strategic alliance partner and WRSX can easily be implemented. The cost this process is about ? 450,000. Managing Generation Y – Delivering the Doughnuts. Traditionally, WRSX is considered to be a laid back organization. It is time to throw out the rule book and introduce doughnut delivery working system on a Group-wide basis. The first step is do a comprehensive employee survey to identify those ready for change. The implementation will be on an office by office basis for the next 12 months.
This strategy has been proven to increase work productivity and reduce costs. One of the main constraints that will be faced will be client facing. The balance should be that WRSX has to give reasonable and valid grounds for denying a request by an employee to work with the doughnut delivery system in the future. The board can therefore approve a budget of up to ? 500,000 for this initiative. This will cater for consultation and implementation across the whole Group. The feedback mechanisms at this level will include signing of performance contracts by the employees and making sure that the targets are achieved.
Clients can be allowed to give their opinions on the new work system based on service delivery and customer satisfaction. WRSX can also charter a strategic measurement team (Wells 1996). Cultural change in New York. Cultural change is one of the determining factors of the success of an advertising company. As such, WRSX is supposed to maintain such a high image reputation from both performance and physical appearance. The working relationship of the staff should be at its apex for optimum performance (Katsoulakos & Tait 2004).
To effect this, WRSX board is to undertake a radical review of the management structure of the New York office. The process of change will involve reducing the number of management layers. WRSX board will also have to redraw job descriptions and objectives. The budget for this radical restructure review would be ? 350,000. Performance baselines will have to be established (Wells 1996), and regular evaluation conducted in order to ensure progress is made and feedback is received. Opportunities in digital media. In the past decade, most company managers have awakened to the power of analytics.
Advanced technology and online presence has presented companies with tremendous opportunities to increase profits and generate more revenues. However, this is entirely dependent on how effectively they use these technologies (Anderson & Simester 2011). There are many prominent players in this industry like Google who control a majorly significant percentage of the online stake. WRSX has already had a preliminary discussion with the relevant officials of Digivision and from these meetings; they are willing to talk further about an alliance. This step will minimize the risk that WRSX has to take financially.
However, the returns are expected to be substantial. The online presence of the company will also be advantageous for clients and shareholders as well. The feedback mechanism that to be employed is simply looking at market share gain or loss and the profitability of the business (Coulter 2005). Second Board meeting Potential acquisition of UK competitor The purchase of RMJ at a cost of ? 22m is one of the best investments that WRSX could make. This will not only increase the company’s market share values but also the profits and shareholder value. However, there I need to continue to manage RMJ as a separate and independent business. This will facilitate smooth transition of power without disruption of functions. The profitability of the newly acquired business through the independent running of RMJ are the feedback mechanisms. Sponsorship opportunity. Sporting events are an effective way of promoting the WRSX brand. This is because the association of a great company with a successful spots personality will create a big audience and market for WRSX. Tennis is a widely watch sport and thus this sponsorship is a good investment.
Personal sponsorship of a tennis player could become the first part of an overall strategy of WRSX involvement in sports. The board therefore agrees to a? 300,000 p. a. sponsorship package. Furthermore, the Board believes that other sports such as Formula 1 are an effective way of promoting WRSX and there is the opportunity to become a leading sponsor at an annual cost of ? 2m (? 1m per half year) over three years. This will go a long way in promoting the company. Knowledge sharing & communication coordination Information and Technology (I. T) is the heart of modern day advertising and PR services. A single coordinating management and creative team should be put together from both the Paris and London offices. The estimated cost of implementing this is ? 400,000 per half year. WRSX should also proceed with developing the new IT scheme using its own in-house team of programmers. This option will ensure customized system that will cater for all WRSX needs and is also a less expensive option. From this Qorvic will get evidence that WRSX are making great strides to satisfy their needs.
This will help secure the deal. However, there should be strict feedback mechanisms. As such a supervising committee should be set up to ensure the deadlines are met Corporate governance issue The reputation of any organization is what either makes it succeed of makes it fail. The steps taken will involve implementation of the 10 Point Code of Business Conduct and sacking the two local directors who were implicated in the scandal. There will be a PR campaign set up into immediate effect that will publicize these decisions. This will help regain the fans and also their trust.
In order to help mitigate future problems, the board shall convene an executive sub-committee of the non-executive directors and WRSX legal counsel to conduct a thorough review of the WRSX corporate governance model. The cost of implementing this program will be? 750,000. This is much but there is potential in the South American joint venture and this action will be sufficient to ensure that the European clubs association contract will be renewed. Third Board Meeting Outsourcing central services Outsourcing of services is the ongoing trend in the business world today.