Expansion into China: Strategic Choices for WRSX

Running head: EXPANSION INTO CHINA
EXPANSION INTO CHINA
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Part A:..............................................................................................................................................2
Overview of WRSX.....................................................................................................................2
Overview of the industry.............................................................................................................2
Strategic tools used......................................................................................................................3
Strategic choices..........................................................................................................................8
Reflection on decision making process.......................................................................................9
Influence of decisions during board meeting.............................................................................10
Results achieved........................................................................................................................10
Influence of decision for original strategic choice....................................................................10
Part B: Reflective essay.................................................................................................................11
Reflection on computer simulation:...............................................................................................12
Appendices:...................................................................................................................................13
References:....................................................................................................................................19

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Part A:
Overview of WRSX
WRSX is one of the leading advertising and media relationship companies with its
headquarters in the United Kingdom. The merger of Waldron Riux Silberstein Xao formed the
company, a London based advertising agency with Silberstein& Lord based in New York, the
United States of America and Roux Toussaint Berthe based in Paris, France. The timeline of the
present company shows that is a public limited organisation with its primary listing on the
London Stock Exchange. The product line of the company consists of advertisement services
for its clients, media advertising, direct marketing, public relation and communication
servicestailor-made for customers. The company in order to strengthen its product line acquired
firms from related industries like film production and sports marketing. The main clientele of
the firm consists of global players from logistics, health & pharmaceutical,
telecommunication, beauty, personal care, public sector and charitable organisations. The
value addition strategy of WRSX consists of offering clients with creative and innovative
promotional services of their products. The mission of the company is to maximise the values of
the brands owned by its clients from different industries.
Overview of the industry
The advertisement industry is an international industry spanning the entire globe, which
is worth billions of dollars today. The primary product of the advertisementindustry includes
creation and strengthening of brands of companies across diverse industries. The actual
products of the advertisement industry are the advertisements, which are visible to the
consumers while the augmented product consists of the brand equity maximisation, which the

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companies gain (Conley 2017). The main aim of the advertising industry is to promote products
in the market to create awareness among the consumers. The players in the industry range from
small non-profit making organisations to Fortune 500 companies like London based WPP Group
worth $19 billion. The smaller players mostly serve local small-scale firms while the
international advertisement companies serve multinational companies. Today promotion has
emerged as one of the main activities multinational companies carry out to strengthen their brand
equities and maximise their revenue generation. This increasing importance of promotions hasled
to markets like the United States of America and China spend immense amount of
money(statista.com 2018)(Appendix 1).The advertisement industry comes heavily under the
influence of macroeconomic changes and changes happening in the other industrieslike fast
moving consumer goods and pharmaceuticals. The market issues like economic slowdown in the
developed markets have led the companies of these markets curtail their advertisement costs,
consequently causing fall in revenue of the advertisement companies in these markets. Again, the
booming economies are experiencing their companies boosting their advertisement activities.
Thus, the advertisement companies in these countries are experiencing increase in revenue (Shen
et al. 2016). The recent trend in the advertisement industry in response to this trend is increasing
their presence in the emerging markets like Asia. (Couldry and Turow 2014).
Strategic tools used
The political factors are the most important factors, whichinfluence the operations of
business organisations. The political factors consist of government policies, which form the basis
of the policies and modus-operandi of all the industries. As far as political condition of the
United Kingdom is concerned, one can point out that the country is politically stable under the
leadership of Mrs Theresa May. The country has strong bilateral ties with the major countries in

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the world, which would allow the firms based in the country to expand into these markets. As far
as the political factors of the target market, China is concerned;London has strong relationship
with Beijing (Draper 2017).This relationship is evident from increasing presence of British
companies in China. The companies from this country in turn follow the suit by opening
branches in Britain. Moreover, the present host countries of WRSX, the USA, Singapore and
France too are increasing their ties with Beijing (business-standard.com, 2018). Expansion into
the Chinese market in a strong way would enable WRSX diversify the losses it would suffer post
Brexit. Expansion into Asia would usher several economic advantages like more market and
consequent revenue generation (bloomberg.com. 2018). However, Chinahas its own political risk
factors, which WRSX needs to consider. The economic development in the main Asian markets
like India, China and Japan has triggered arms race, which have created tension among these
countries. Terrorism poses a continuous threat to the economic stability of the Asian nations just
like the US and the UK (washingtonpost.com. 2018) (Appendix 2). The analysis of the political
conditions of Britain and the China shows they have their own political strengths and threats.
One can also point out that China has its own political opportunities and threats. These market
opportunities of China further influenced me to convince the directors pursue the strategy and in
the second board meeting on making strategies to reduce client turnover.These advantages of
China would eventually make the board opt for the country as its next important market.
The economic factors of Britain as I can point, which influence the operations of the
companies based in Britain, consist of both opportunities and threats. The first economic
advantage, which advertisement companies enjoy, is her high rate of GDP
(tradingeconomics.com. 2018) (Appendix 3). The high GDP in my opinion means that industries
in the country are booming and would require more promotion of their products to boost their

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revenue. This growth in demand would translate into more business generation for WRSX.
London provides the companies with immense investment and sourcing of funds for operations
(statista.com 2018) (Appendix 4). This provides the financial strength to the business
organisations including WRSX to operate in Britain and expand into other markets. The third
economic advantage of the British economy is the international value of Pound in the currency
market. The value of GBP compared to Euro shows an increasing trend (bloomberg.com. 2018)
(Appendix 5). This means that the advertisement company can import resources at lower rates
and export services at higher rates, thus earning higher revenue. However, post Brexit, the value
of GBP may fall leading to increased expenditure of the companies based in Britain (ft.com.
2018). Brexit is also influencing the entire share market in the UK, which is again a threat for
WSRX since it is a public limited company dependent on the share market for its capital
generation. Thus, strengthening of market position in China has become crucial to counteract this
impending threat of Brexit. The first economic advantage, which the emerging economies of
China would provide, is its vast resources. China has several multinational companies, both
resident and international, which would provide strong clientele to the advertisement company.
Moreover, the advertisement company would be able to exploit the human resources in the
country, thus supplementing the human resource it would have to cede in Europe post Brexit to
cut costs (Tung 2016).This aspect was covered in the second board meeting and it was decided to
outsource some operations. The next advantageous factor, which British companies can exploit
in China, is strong presence of British financial institutions in the market. Thus, they would be
able to use their European account in China, which would make fund transfer between its British
and Asian units easy (Aguilera-Caracuel et al. 2015). China too hasits own economic challenges,
which the advertisement company needs to consider. The fourth board meetings revolved