Business Strategic Analysis

This report analyzes the internal and external environment of WRSX, an advertising company, and presents growth opportunities in China market and digital media advertising. It also provides recommendations for strategies to grab market opportunities.

Business Strategic Analysis
Introduction
WRSX is an advertising company offering media, direct marketing, advertising and various PR
and communication services across range of various disciplines. It was founded by merging three
agencies that are Advertising Agency of London, WWMV and Combined agencies of New York
and Paris (Malik et al. 2013). The company uses variety of creative advertising and some
marketing activities in order to advertise the brand of the client known and successful in the
market (Oswald 2012) (Schmitt, B 2010).
WRSX objective is to do creative advertising and marketing communication services for its
client’s brand. The company is built around its specialized business units and is innovative,
creative, customer-driven communicator.
The company is a big brand still it is facing some issues that are hampering its way of success. It
is not actively participating in Asia’s emerging economies like China, India and Brazil (Davoudi,
Wishardt & Strange, 2010); therefore, it is not successfully serving global markets (Alex 2012).
Another issue is the scandal of corruption that brings criticism of board of the company from
public. The HR polices of the company are lacking the ability to attract talent in the company.
In order to improve the working of the WRSX Company and make it a global competitor this
report is presented. The report discussed the internal and external environment of the company
and presented possible growth opportunities in China market and in Digital Media Advertising
(Media Market and Digital Advertising 2014). It concluded by giving some recommendations
for optimum use of strategies in order to grab market opportunities in both earlier mentioned
markets.
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Business Strategic Analysis
Strategic Assessment of Firm’s Internal Environment
WRSX group is an organization that is doing quite well in its regions but not able to achieve
shares of global markets in an efficient way. It is a creative organization and continuously trying
to achieve competitive advantage over other (Oswald 2012). The company is just lacking in
some elements, which it need to take into consideration in order to be successful. For this
purpose, internal environment of WRSX is critically analyzed by using McKinsey 7’s
Framework in upcoming paragraphs (Mohammad 2015).
Source: McKinsey 7’s model (Mohammad 2015)
a) Strategy
It is the plan or group of plans developed by the company in order to achieve its goals and
objectives. The strategy of WRSX group is good but it lacks fundamental elements of
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Business Strategic Analysis
governance. Their current strategy is to make creative advertisements and do marketing related
activities in an efficient way. However, lack of competent workforce is blocking the company to
accomplish its objective effectively. They have good strategies to achieve a big market share of
China and Digital Advertising. However, their workforce needs to be updated and competent
(Alex 2012).
b) Structure
Structure is the design and authority and responsibility relationships in the organization. WRSX
Group is the mixture of three firms. All three were separate firms earlier but came together
because of some circumstances and made this WRSX Group. Currently it is working from three
different regions that are New York, Paris and London. Company’s structure is well planned and
focuses on gaining productivity. However, because of autonomy they get by working
independently, their efficiency is reducing. In order to gain market opportunities of China and
digital marketing, all three divisions need to take some actions for overcoming the
ineffectiveness of their divisions.
c) Style
It talks about the way in which top management get involved with its lower divisions. The type
of communication top management is using. The style of communication WRSX uses is formal
and informal in nature. There is fixed line of hierarchy that goes from top to bottom and posses a
grapevine network. In this way top management do not blocks out its lower levels, listens to their
qurries timely, and act upon them. This acts as the strength of the organization and can be helpful
in future achieving the marketing opportunities of China and Digital advertising markets.
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Business Strategic Analysis
d) Staff
It talks about the type of employees needed by the company with respect to their jobs, which are
defined in structure of the organization. WRSX group is running in three different regions and
their group of employees is employed according to the need of the company, however they are
lacking in competent employees. a recent case of corruption done by an employee of the
company dragged down the company’s reputation in front of their customer. It need to be taken
care of as soon as possible by the company to grab the growth opportunities present in the
market.
e) Skills
As the name suggests the skills accompanied by the employees of the company in order to
achieve organizational goals and competitive advantage over others. It is already mentioned in
above paragraphs that the skills of current employees of the company are not that efficient. They
are skilled but not brilliant in their working. They are lacking commitment and promptness. For
grabbing market opportunities of China and Digital Marketing, it is important for WRSX
Company to time-to-time update the skills of its employees by providing them proper training
opportunities.
f) Systems
It is the process or group of processes that deals with the daily working of the company. WRSX
is a communication company. With its creative system of three other firms, it now has the
expertise of acquiring business units with expertise in sectors like, public relations, research &
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Business Strategic Analysis
insight, media, direct marketing, film production, branding and sports marketing. With this
expertise, the company has ability to grab growth opportunities present in global market.
g) Shared values
Shared values are the values or ethics the firm needs to take into consideration. In order to
exploit market growth opportunities in China and Digital Media Advertising, every employee of
WRSX group should follow company and social ethics. In the organization, a case of corruption
already took place. May be some are taking place without the knowledge of people; hence, this is
unethical and need to be stopped as soon as possible for gaining competitive advantage over
others and grabbing market opportunities.
Strategic Assessment of Firm’s External Environment
WRSX group is an organization, which is neither a small one nor a top agency; however is it
somewhere in between (Hatten 2010). It is not currently serving a bigger market effectively like
market of China and market of digital media advertising. These are the big opportunities to be
exploited but before that, company’s external and internal environments should be analyzed.
Internal environment is already analyzed in above paragraph now external environment is going
to analyzed (Dillon 2012).
External Market of the WRSX Group is going to be analyzed by using Francis Aguilar PESTEL
Analysis(Tomayess, Vanessa & Theodora 2010) (Buil, Chernatony & Martinez 2013). The
elements of PESTEL model are treated as different layers of external market and in the end;
detailed explanation of economic factor layer is done.
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Business Strategic Analysis
Source: PESTEL Framework (Tomayess, Vanessa & Theodora 2010)
a) Political Factors
This element deals with the factors concerned with politics involved in company and around it.
In WRSX Group, the labor turnover is high. Competent workforce is now harder to find in the
company. It is so because media and advertising market is emerging rapidly however with its
changes the WRSX Company is lacking in some terms. The company has cut through
competition in the market but do not has competent workforce or strategy to fight with it in
emerging markets of digital media advertising and China Market.
b) Environmental Factors
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Business Strategic Analysis
These are the factors related with environment present around the company. WRSX group is a
creative and innovative group still its shares are under performing. It is lacking the client
confidence and not getting enough orders to maintain a momentum of profitability. Its
advertising polices are also not that strong that in turn can affect the sale of its client. In order to
achieve competitive advantage over others the company needs to take prompt actions to grab
opportunities present around them in china markets and market of digital media advertising.
c) Social Factors
These factors deals with social issues surround the company. WRSX is a company that is
customer driven and its business units are highly specialized. From its origin to till now, the
group has built up a good reputation. It is fulfilling its responsibility towards society and
economy very well(Maehle, Otnes & Supphellen 2011). However, it is just good and striving for
getting best. In order to do so it need to look into markets of China and emerging market of
digital media advertising.
d) Technological Factors
This factor deals with things related to technology of the company. WRSX main aim is to
increase their portfolio by getting involved in variety of products and services required in their
market. They are also changing their traditional methods of advertisements. On the other hand,
its competitors are most focused on expanding their market segments. It is important for the
company to look into their expanding and growth opportunities mainly in China and in Digital
media marketing activities(Kim, AJ & Ko 2012).
e) Legal Factors
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Business Strategic Analysis
Legal factors are related with the elements like rules, regulation, procedures, etc affecting
company by law and justice. Legal factors of WRSX company are rules related to its advertising
policies, procedures and regulations of public relation and many more.
f) Economical Factors
Economic factors are concerned with the elements, which are affecting or getting affected by the
economy. These factors include economic growth of company and the country in which the
company is serving, disposable income of the clients, inflation and deflation present in the
market, etc. WRSX is the company which is facing many economical issues regarding growth,
expansion and with their workforce.
Detailed Explanation of Economic Factor Layer
From the different layers of external market, which are explained above, economic factor, layer
is the most important one for the company. Main object of WRSX Company is to create value
for its clients by using efficient strategies, with a view that these strategies will help in growth of
the company in long run. The company is aiming at finding sound investment ventures in
emerging markets. The two new emerging markets of the economy are the marketplace of China,
which is a very productive country and on the other hand the market of digital media
advertising(Buil, Chernatony & Martinez 2013).
WRSX is getting feedbacks from its team that it is still providing below average services to its
clients. It not adding enough value to its client’s businesses and not making efficient and
effective advertisements for them. That is the reason the company is losing its image and
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Business Strategic Analysis
customer loyalty (Malik et al. 2013). It gives rise to the immediate need of looking for growth
opportunities in markets, which are mentioned earlier.
Managerial Evaluation of Growth Opportunities
WRSX is a medium sized advertising agency that has a good reputation. It offers a wide range of
advertising and marketing services. The aim of the board of the company is to take it among top
20 agency of the world and make it a global player (Aswathappa 2010). After analyzing the
internal and external environments of the company, it can be seen that the WRSX group is not
having competing workforce, there is a high employee turnover. Its Paris agency is doing great
work in comparison with its other agencies. The company advertisement policy is not that
effective it needs more investment.
If the WRSX group wants to increase its market share, it has to consider all above-mentioned
points and act upon them as soon as possible (USB Report 2011). These points will also going to
help company in exploiting market opportunities present in the markets of China and digital
media advertising (Alex 2012) (Gorla, Somers, & Wong 2010). With the help of available
information and some established elements, growth opportunities in China market and in digital
media advertising markets are analyzed:
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Business Strategic Analysis
Market Opportunities in China
Source: The Ansoff Matrix (Hussain et al. 2013)
This model was developed by Ansoff in 1957 are published in Harvard Business Review, as an
article named Strategies for Diversification (Hussain et al. 2013). This model has four elements,
which separately discuss the effectiveness of company in market. Brief explanation of these
elements with reference to opportunities to WRSX Company in China market is discussed in
following paragraphs:
a) Market Development
It deals with developments that are happing in market. In this case, it is talking about China
market. It is a giant economy and still growing rapidly. It is a best market for WRSX group to
exploit the growth opportunities.
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Business Strategic Analysis
b) Diversification
This factor talks about variations present in the market. In China market of advertising
communication, there is variety of clients (Maehle, Otnes & Supphellen 2011). It has a big
entertainment industry. With the more diversification in current products of the company, it can
become the good market player in china.
c) Product Development
After analyzing the developments in the china market and deciding the product diversification
next comes, for WRSX Company, is the development of the proper products for launching them
in the market. China market has a large potential of new product development (Maehle, Otnes &
Supphellen 2011).
d) Market Penetration
It deals with profitable selling of products or services in the market. In this case, the market of
China has remarkable market penetration report (Buil, Chernatony & Martinez 2013). Until now,
thousands of companies made it a market for their business and it has given them profitability in
return. Hence, it is a good market opportunity for WRSX Company.
After analyzing China market with the help of all elements of Ansoff matrix, it can be inferred
that China is a very vast and rapidly growing country. It has given its market to many businesses
for expansion. With this view, WRSX Company can also take a step towards their growth by
entering into market of China.
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Business Strategic Analysis
Market Opportunities in Digital Media Advertising
Source: Porter’s 3 Generic Strategies (Nandakumar, Ghobadian & Regan 2011)
WRSX Company is a creative and customer centric company. However, it is still not a global
leader and facing cut through competition. After analyzing internal and external environment of
the organization, it becomes necessary for the company to look into other market opportunities in
order to expand their business and become profitable in nature (Schmitt, B 2010). Digital media
advertising is one of the various market growth opportunities available in market for the
company (Age 2013).
Digital media advertising has to be exploited before planning to deal in it. It is analyzed in depth
in this report by using porter’s three Generic Strategies in following lines (Bordbiavantage 2010)
(Nandakumar, Ghobadian & Regan 2011):
a) Differentiation
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Business Strategic Analysis
In this element, it talks about variations in terms of organization, products and customer centric.
This digital media advertising is a varied method other than traditional methods of marketing
communications (Caroll, 2013). With in digital media advertising there exist a variety of sectors
and methods to deal with in. a company has many ways to deal with their client when they use
this type of advertising(Huang & Sarigollu 2014) (Kim, AJ & Ko 2012).
b) Overall Cost Leadership
This element tells about the leadership of the company in the market on the basic of its cost
related factors (Kotler & Keller 2014). In the case of digital media advertising, every company
is focusing on using digital methods of advertising, however they need to be efficient also and
provide company a competitive advantage over others. So cost leader ship can bring upper hand
for company in digital media advertising.
c) Focus
In this element of porter’s matrix, he talked about focus to a particular sector and to a particular
type of consumer. In digital media advertising also, companies need to focus on a particular
target segment of market and customers. This can help them in avoiding unnecessary rejection of
their products or services (Beth 2011) (Burt, Johansson & Thelander 2011).
It can be inferred from above mentioned statements that the new emerging market of digital
media advertising is demanding sector, which can influence the working and growth of a
company in a very positive way. With this inference, the company WRSX can look into this
sector and exploit it effectively and efficiently.
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Business Strategic Analysis
Conclusion and Recommendations
WRSX Group is the combination of three agencies, which are present in three different regions.
They have been doing the business in advertising and marketing communication from many
years. The company is creative, committed, and enthusiastic in nature. They are customer
centric. However, the company is still lacking in some areas that are discussed above.
After analyzing internal and external environment of the organization, it is inferred that the
company is facing some issues regarding their workforce, effectiveness of its agencies, lack of
client loyalty, lack of awareness regarding rules and political issues of advertising in other
countries and high labor turnover.
These all issues are addressed in this report and a way of overcoming them is discussed. The way
of overcoming the ineffectiveness of the WRSX Company is by exploiting the growth
opportunities available in two major sectors. One is in market of China and other is the market of
digital media advertising.
From the analysis and the study named “This Year, Next Year: China Media Growth” conducted
by company ,of China market, it is found that, China is soon expected to become second largest
market of advertising and marketing communication industry as it has big entertainment
industry(Huang & Sarigollu 2014). It is included in world’s top most economies. Hence, first
recommendation to the company is that it should enter in the market of China for doing business.
Second is that it should increase investment in television advertising as according to study it is
found that investment on this in china is expected to reach US $ 28 billion from US $ 24 billion.
Third is that the company should invest in digital media advertising in china as data says that
spending on digital advertisements is going to increase around US $ 1 billion. However, values,
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Business Strategic Analysis
rules and procedures of China are tough to follow for new entrants or the companies planning to
enter.
Environmental analysis report of the WRSX Company also revealed about growing importance
and market of digital media advertising. In order to make a cluster of dynamic market, the
marketing network of a company should include various types of marketing ways (Beth 2011)
(Huang & Sarigollu 2014). Digital media advertising is one of them. By exploiting the success
opportunities present in digital media advertising, the company is recommended to take some
decisions. First is that they need to find out various dimensions of digital media advertising.
Second, distribute the layers of digital media advertising based on simple and complex
advertisements and based on cost involved in it. Third increase investment in technological
advancements, in order to make company digitalized and does business smoothly. They are the
opportunities, which should be taken into consideration as soon as possible if a business want to
be a market player (Kim, AJ & Ko 2012).
The company has acquired some businesses earlier and made collaboration successfully.
Company has potential to balance its issues and competitive edge of the business (Johnson,
Whittington, Scholes, Angwin, & Regner, 2014). WRSX board is confident that by exploiting
the correct market segments company can again attain its goodwill and can achieve competitive
advantage over others.
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Business Strategic Analysis
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