WRSX Reflective essayIntroductionGreat project and experience to see what it is like to run your own business, without actually being in the job, and definitely allowed us to experience and see the dynamics within a group, and how you work, or may not work together to get the best return on for your business. IT allowed us to develop a strategic business awareness, improve our shills in strategy development and improve your understanding of effective strategic implementation. Together going through the agendas for the board meetings, and then further debate around the various options presented to us by our colleagues around the world.It also showed me the workings of a large organisation and the detail the directors went into for each agenda item, how they pitched their own opinions and making compelling arguments for each option. In my reflective essay I am hoping to cover off the following.
The model we applied to the WRSX, PESTEL and Porters Five Forces and how we used the information from these to guide our decisions, identifying our competencies and capabilities.Mendelows theory, how through the process the key stakeholders were at the centre of all our decisions, and how we took on board the detail and information provided around key stakeholders, their goals and their and their objectives. What is the task? We have been appointed as directors to a large advertising and marketing communications group of companies – the WRSX Group. The hope for us is that we are coming in from outside the advertising industry, and we can bring a fresh approach to the business. A high profile organisation operating in a very competitive Global environment and with some key decisions to make in the coming year, with the objective of establishing itself in the top 20 global advertising and marketing communications group of companiesWe are to take on a long term view and look at the following options, • Invest in the organic growth of your business • Acquire or divest businesses • Enter new geographic markets• Provide new services or products to your client base• Develop strategic partnerships with suppliers, clients and even competitors• Invest in measures that will reduce your carbon footprint• Balance commercial considerations with corporate governance and ethical business practices.• Manage the transformation in the organisation that will be required based on the above decisionsAt the core of our decisions always maintaining focus on retaining key personnel with key skills to help the organisation achieve its goals. Ultimately will deliver growth for the business and long-term shareholder value.Your objective is to deliver the best share price for your shareholders.
The Journey Begins.To quote our executive chair:”Our job is to help our clients establish their brands through the range of services we offer – and sell more of their products or services to consumers or business customers – where required on a global basis.” ( WSRX report 2012)At the meeting Juliette gave us some clear instructions as to what we were to do.• Gain an understanding of the industry• Gain an understanding of WRSX’s current position and where the current strategy is taking it.For me here we need to stay firmly focused on the task in hand, the key stakeholders, review analyse WRSX current Strategy, make changes to the strategy where we see fit, justify these decisions, communicate these decisions, set KPIs and measurable’s, review and assess.
Strategic Analysis. Fig 1″Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholderexpectations”. Johnson and Scholes Exploring Corporate Strategy (6th Edition) Paperback – 22 Nov 2006by Gerry Johnson (Author),? Kevan Scholes (Author)In a nutshell strategy is planning, and strategic planning therefore is long term plan. • The long term direction of an organisation• The scope of an organisations activities,• With the aim of gaining a competitive advantage over our competitors.• Keeping a close eye on the business environment, internal and external.• Improving the organisations resources and competencies, • In line with the values and expectations of the shareholders. All of which means the decisions we are facing are:• Complex in their nature.
• Numerous options and factors which means uncertainty• Affect operational decisions, • We will need to be united on our final decisions, • And the decisions we make will involve considerable change across the organisation. • How we implement and communicate these changes is key to their success. WRSX Startegic analysis.We employed two models, with the aim of identifying WRSX resources and compentencies, The strategic capability of a firm (resources and competences) and expectation and influence of stakeholders(Johnson, Scholes and Whittington-2009).
1. The PESTEL ModelThe PESTEL analysis allowed us to look at the external environment (Macro) looking at the political, economic, social, technical, environment and legal, to drive WRSX’s key strategic issues, and as WRSX ia a large organisation, currently located in four locations, and with an eye on expanding into emerging markets, PESTEL analysis should be considered, as there are big risks in operating globally like WRSX. We used the two models to complement each other and to give us a more wholistic picture, Grundy (2006) believes that these strategic tools are interdependent and a combination would allow for a wider and more accurate analysis of the business environment.Grundy, T., 2006.
Rethinking and Reinventing Michael Porter’s Five Forces Model.Strategic Change online, 15 (5), 213-229.Politicalthere are big risks in operating globally like WRSX, which we considered on a case by case basis, most notably looking at the Muslim and Chinese markets.EconomicWRSX have to consider external forces such as economic growth international and by region, currency exchange rates, and interest rates, and the fact that expected growth in our current markets is significantly lower than potential markets.SocialWe need to be seen to address our CSR policy in view of recent issues most notably Paris, we tackled this by looking at our carbon footprint, distancing ourselves from the football scandal in South America, and also addressing the work life balance for our staff.
TechnologicalChanging daily and we need to be ahead of the curve here, looking to streamline systems, and internal communications is a good start, but also build on our core competencies like market research for example, Internet based market research is one of the latest developments which WRSX needs to leverage and get to its customers globally. Another option we looked at in the board meetings was to streamline the internal system with a significant investment. Environmental.We addressed these the best we could by undertaking policies to make the buildings more energy efficient, reduction of recycling waste and reduction in business travel.
Legal.In Europe we are looking at GDPR in 2018, its laws like this that we need to be ready for and ensure we are not exposed, and also with employment laws in different regions. Also with Brexit any business operation in the EU for example will have to ensure that the data they have stored in the UK, must now be moved to the EU.Porters Five Forces1.
Threat of new EntrantsThis is high and is being facilitated by technology, allowing new advertising companied to easily set up, however we would be hopeful at WRSX level, with time in business, expertise and a dtrong financial position, economies of scale we can hold our own againist any new entrants.2. Bargaining power of Suppliers, As the market has changed with a number of larger agancies the reduces the power of the suppliers.3. Threat of Substitue Goods and ServicesAs we have highlighted this is a highly competitive market and clients are pushing the price of our goods down, however with our strtegy firmly focused around technology and defrentiating ourselves from the competition through innovation.4. Bargaining Power of Buyers.This would be limited in the advertising area, as its is not easy to move between agancies, if we can through our Account Management channels, upsell to the clients and make them more sticky with product differentiation and create a higher value for the clients, they will be very unlikely to move their business.
( I have seen this myself in the Enterprise space, managing large businesses telecom requirements, with new technologies, and upselling new voice data and mobile networks to my customers along with other Value added services such as reporting tools and analythics, clients are finding it much harder to move or look at alternative suppliers. However like all models we need to accept that both PESTEL and Porter have their limitations, Williams (2011) states that the model has “certain limitations in the modern business environment” and an alternative strategy may be more appropriate for gaining competitive advantage.Business Innovation and Skills, 2012. A Guide to the Cosmetic Products (Safety) Regulations 2008online. United Kingdom: Gov.UK.However by carrying out the above analysis it allowed me to to tie down and identify the Strenght, Weaknesses, (internal) and the threats and opportuinities (external) facing the organisation. Swot analysisAgain used to complement the Pestel and Porters, we used this to.
1. Identify what we do better than our competition2. What the compwtitors do better3. Are we making the best of our resources, and the most of the opportuinities available.4. How should WRSX respond to changes in the external environment. Overall the SWOT analysis is positive, but innovation is key the the future groth and success, Strenghts WeaknessFinancial position, Management Retention of key Staff, Poor CSRIncrease in advertising expenditure Carbon footprint, Good international reach, social media Management in New YorkOpportuinities ThreatsNew Partnerships, move to emerging markets High competition, Economic outlookAquire new technologys, Enhance the Brand Companies reputationCore Capabilities and Compentencies.My focus here is around identifying our CORE capabilities, defining them, and seeing how we can add value to our capabilities, with the ultimate goal of driving a capability driven strategy.
I believe we can use our Core capabilities to differentiate ourselves from our competitors, and if we can 1. identify2. define 3. manage4. focus5. nurture our core capabilities If we do this we can win in the market, helping us to grow and retain our existing clients, and win new clients.
I see our Core Capabilities as followsCorporate Governance, The regretful situation in Paris in recent time has brought this to light and has had a negative impact on the business, however we now need to get the message out that this episode is behind us, and not only have we reacted to the incident and put it to bed, we are now as a group taking a pro-active approach of embracing corporate governance, and putting in people processes and policy in place to ensure we are ahead of the game in this area, we need to get back on track around CSR also, We are an advertising agency after all; let’s get our story out there.Company Network reach and book of business.First things first, let’s hold onto what we have, we need to ensure that all our current profitable clients are getting the care and attention they deserve and that there are no competitive threats here. strategically we are set up internationally with offices operating in all the hubs in our industry, we need to leverage this network and ensure we are operating internationally and locally, using best practice in all we do, all the time focused on the client. Also we need to review the recent acquisitions, and ensure we are leveraging the new talent and expertise here, especially around the digital media and social media presence.
So our clients see us as an agency operating across all the traditional and new social media channels. Market Research and understanding market segment channels, We are widely recognised in the market as a leader in this area, This is a valuable strenght in this new technical world we are in with lots of “noise” in the marketplace, we need to leverage our reputation in this space, and if we can show clients that we are and can be successful in this space, and we are stronger that our competitors, we need to leverage and grow this,Our People, From our leaders to our sales people we need to leverage this in the marker, Juliette has in the past proved to be an astute leader, heading up the merger of the business, identifying globalization and emerging markets as real opportunities, and Raphael Roux, despite his recent issues he is the energy and drive and innovation that we need in the veins of the organisation, if we can get these leaders energy in to the New York office in particular we can see some big gains. We need to get to the expertise in the organisation also, as with a lot of acquisitions in recent years, do we full appreciate the people we have taken into the organisations, have we fully integrated them into the organisation, have we communicated the company’s core values effectively to these new areas.
We have all the Core capabilities the organisation needs to be successful, but recent indicators is that we are going in the wrong direction, this needs to be addressed. To summarise, as a new director in the organisation my first aim is to at a Micro and Macro level gauge where the company is, and then see where we can take it. I am confident that we can make WRSX dynamic, valuable, and difficult to imitate, to give us a strong competitive advantage, so we can deliver for our clients and shareholders.There are many external factors that we have looked at, and the internal analysis, while we have our challenges, we can take WRSX to another level and break into the top 20 Advertising agencies.The Board Meetings.External factors, board needs to know external opportunities and threats, and three areas. World EconomyDownturn in world economy especially US EU slowing more quickly than Asia Pacific looking stronger, with International economic growth down 2.
9% down 0.6% and more predicted short to medium term.Advertising IndustryDifficult time in advertising sector, WRSX need to communicate the brand and look at new mediums, to gain more clients, and achieve organic growth. WRSX and our competitors have looked at high-profile acquisitions to build market share, drive economies of scale or enter new markets and sectors.Client retention, churn is at an all time high in industry, and WRSX itself has lost some key clients in recent times. WRSX need to defrertiate themselves from the competition, with the following • breadth of advertising and marketing services, • effective advertising that increases market share, • value for money and a mutually beneficial client/agency relationship. • Client retention is key to on-going financial success for our business.
Board Meeting 1 we took the following decisions. Moving to China, as from our external analysis a faster growing market than our existing markets, and our competitors are there already.Atttracting new talent post 1980 (generation Y) The best people always have choices about who they work for. Can this ‘Delivering the Doughnuts’ attract high-quality people into the Group in certain roles and what impact would the introduction of such an option have on the rest of the business? Get them in, grow, nurture them in the organisation.Cultural change in New York, This was a no brainer for me as this was high lighted early in the analysis that New York had not moved with the times and that there is some “dead wood” that needs to be taken out, this office should be the bench mark for the business. Opportunity in Digital MediaWebsite development, on-line advertising, social networks and blogs, interactive content, email marketing and mobile marketing. Need to get intergrate this into the organisations vision and strategy, as advertising budgets are moving ti digital and we need to be positioned to win this business, and gain competive advantage in this space.
Board meeting 2 we took the following decisions, Reduce client churn, identified in our external analysis as an area for concern, and needs to be tackled head on, so we looked at our existing account management teams in New York, and asked the Senior Account Managers to step up and take on extra responibilty around retaining key clients at a cost of $400,000 per annum. ? In hindsight should we have opted for A, and appoint Client Relationship Manager to each of the top 10 clients, at a cost of $ 1.2 per annum.Sponsorship Opportuinity, with an high profile up an coming US tennis palyer, as we are looking at new mediums to promote our business this was an attractive option, and may open windows to other sports, such as Formula 1, expensive but effective. Corporate Governance issue in Argentina, the New York office has been dragged into issues in the football league, in view of recent bad PR around the Paris office and a large European football contract coming up for renewel we felt we had no choice but to take this issue head on and pull out of the contract and distance ourselves from the league and the controversy.
Does the WRSX holding company brand add value to the tasks and business carried out by our subsidiaries worldwide or are we just contributing the bureaucracy and slowing down our business reactions to changes in the environment. we took the stance that systems, analytics and big data will allow us to streamline the business functions and al;;ow WRSX achieve their objectives and gain competencies and competitive advantage over our competitors. Also the WRSX brand is strong and widely regarded and we know that this need to be maintained and enhanced and this means keeping WRSX as the holding Brand. There ar big advantages to improving knowledge sharing, managing the global talent pool to attract high profile/spending clients. Result share price moved up, € 3.00 – € 3.33.