Comprehensive Business Strategy Analysis: Advertising Industry Report

This report provides a comprehensive analysis of the advertising industry's business strategy, focusing on the year 2015. It begins with an executive summary and table of contents, followed by an introduction that highlights the importance of effective advertising and branding in achieving competitive advantage. The report then delves into an analysis of Porter's Five Forces, evaluating the threat of new entrants, substitute products, bargaining power of buyers and suppliers, and competitive rivalry within the advertising landscape. It assesses the strengths of each force and the underlying factors driving them. The industry's attractiveness is examined, and the report analyzes significant changes in the advertising industry, such as the shift towards dynamic, personalized advertisements and the integration of advertising channels. The report concludes by analyzing factors that have positive or negative impacts on major advertising agencies, offering insights into the challenges and opportunities within the industry. The report references various academic sources and includes a bibliography.

Running head: BUSINESS STRATEGY
Business Strategy
Name of the Student
Name of the University
Author note

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Executive Summary
The assignment has thrown light on analysing the Porter’s five forces analysis of entire
advertising industry in 2015 wherein the different changes and the strengths of each of the
forces has been analyzed effectively. Moreover, with the help of the different statistics, the
changes in the advertisement theory has been analyzed which helped in understanding the
effectiveness of the services.

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Table of Contents
Introduction................................................................................................................................3
Answer to Question 1.................................................................................................................3
Analysis of Five Forces Analysis of Advertising Industry in 2015.......................................3
Strength of Five Forces and Underlying Factors that Driven Them......................................5
Analysis of Industry Attractiveness.......................................................................................6
Answer to Question 2.................................................................................................................6
Analysis of Changes in the Industry......................................................................................6
Analysis of Factors Becoming Negative or Positive for Major Advertising Agencies.........7
Conclusion..................................................................................................................................8
References and Bibliography.....................................................................................................9

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Introduction
For each and every organization, the core competencies as well as resources cannot be
helpful in bringing competitive advantage, unless they have the capability in establishing the
brand as well as penetrate the overall market for similar reason. As commented by Johnson et
al. (2015), the effective advertising as well as branding plays crucial role in the strategic type
of positioning and growth. The report aims in analysing the five forces of the entire
advertising industry in the year 2015 that will be beneficial in understanding the strengths
along with underlying factors which are driving them. The attractiveness of the industry is
needed to be analyzed which will be showcasing the growth prospects of the industry. In
addition, the changes in advertising industry is required to be analyzed for identifying which
forces can create positive or negative impact for major advertising agencies.
Answer to Question 1
Analysis of Five Forces Analysis of Advertising Industry in 2015
Threat of New Entrants
In the year 2015, it can be seen that there is no such potential threat or legislative type
of issues for entering in the marketing as well as advertising industry. The high level of rise
in environmentally consciousness for the different advertising organizations have various
abilities for delivering high and efficient services along with marketing which is done
through ability which is well-averse for becoming more efficient in context of marketing as
well as advertising related services to customers (Johnson et al. 2015). It will be reducing the
threat of the entry as it will be increasing loyalty among clients to the companies based on
advertising. However, in the recent scenario, the different advertising organizations suppliers
such as Facebook or Google have been capable of delivering different services which

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includes strategy related to marketing, design of technology through channels of potential
type of customers. Such online service companies are affecting on the high-end usage of
internet for bypassing traditional kind of advertising along with selling services directly to the
different potential type of clients.
Threat of Substitute Products
There is low level of threat from the substitute products as advertising as well as
marketing industry has no such major competitors. The different digital related agencies such
as Facebook are not being termed as the competitors as these help in providing competing
kind of services. These companies play the role of the suppliers as the different advertisement
companies make the purchase of own platform for advertising products of their own.
Bargaining Power of Buyers
With the proper technological advancement in the economy in the advertisement
channels, the concentration among the buyers are mainly dependent on the rate of entire
growth of economy. In case of advertising companies, the switching cost of the buyers are
high and the companies have high agreements with different customers and low level of
competition within themselves. Moreover, the rise in the popularity of the internet helps in
indicating the fact that buyer’s competition threat to the entire industry of advertising. In
addition, clients have the difficulty in retaining the boutique type of advertising companies as
marketing partners.
Bargaining Power of Suppliers
In case of advertising companies, the high switching costs is not considered to be the
main cause or factor related to contemplation in the advertisement industry as the different
products and services are mainly based n projects. As there is high level of increase in the
popularity of internet, the threat of suppliers which is ever more present when the different

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types of suppliers in the digital media take clients from the conventional type of advertising
companies.
Competitive Rivalry
The agencies of advertising are specializing in the respective market segment and due
to the same, there is low level of competitive rivalry in the market of advertisement agencies.
The different factors which is inclusive of high barrier to exit as well as high level of fixed
cost needs to be ignored as influence of the threat of the unpromising kind of the entire
economic type of growth has got advertising industry which are not wanting clients as their
main focus is providing apt services.
Strength of Five Forces and Underlying Factors that Driven Them
Threat of New Entrants- The major strength of the respective force is that as there is
low level of threat, the advertising companies can have the capability to generate high level
of profitability and it will be leveraging the regional presence and the factor which drives
them is that advertising industry is not attractive.
Threat of Substitute Products- There can be offerings of the new channels for the
forward type of integration with the switching costs that is low and will be capable of gaining
effectiveness.
Bargaining Power of Buyers- It can be capable of creating long term relationships
with static fee structures and identification of buyers need to be done which will be adding
prestige to the seller’s list of consumers.
Bargaining Power of Suppliers- The seasonal campaigns can create pressure on
supply and it will be generating high level of possibility in forward integration in a suitable
manner.

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Competitive Rivalry- As there is large budgets for advertisement campaigns,
therefore, it is the major strength for the existing advertising companies to add premium
services for the clients.
Analysis of Industry Attractiveness
In the respective advertisement industry, the major attractiveness is the high level of
creativity and development in the industry which will be helpful in generating high level of
sales. In the advertisement industry, it requires a new perspective which needs to be updated
as per the different aspects which are happening in the technological front. Creative
advertisements are more memorable along with long lasting that helps in building fan
community. In the advertisement industry, the main attractiveness includes flexibility and
artistic value which is visually appealing and it has the different sound elements.
Answer to Question 2
Analysis of Changes in the Industry
In the last few years, there are various kinds of changes which have been included in
the advertisement industry which has made them more effective and reliable in delivering the
high-quality services to the different customers.
Firstly, the advertisements are becoming highly dynamic and personalized in nature as
in entire modern economy, attention economy wherein the consumer attention is mainly
divided across various devices, applications along with formats which will be commanding
the attention of the customers (Gokhbergand Roud 2016). The creation of content which are
mainly designed for the different formats which will be automatically align with browsing
behaviour of the audiences.

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Secondly, the advertisements channels are becoming automatically integrated in
nature wherein consumers try to divide their attention across the devices as the behaviours
have become highly complex. In such scenarios, the companies in the advertisement
industries need to automate as much as possible through configuring the advertisement mix
for communicating programmatically with one another in real time. It will be creating high
level of efficiency in the services and generate high effectiveness in delivery of the services
within stipulated timeline.
Lastly, the transparent attribution is tying all advertisement spend to hard data
wherein the companies in the advertisement agencies need to reorient their budget in
managing the advertisements successfully and understand the marketing funnel for
eliminating the branding black holes and it will be contributing to the bottom line. Demand
for the transparent reports from the different advertising partners and using the same
information in development of holistic approach and attribution model can span all the
channels.
Analysis of Factors Becoming Negative or Positive for Major Advertising Agencies
Bargaining Power of Buyers is the first force which is creating negative impact on
the advertising agencies as there are different other options available to the customers which
affects the growth of the advertisement companies. There are different kinds of buyers who
can demand concessions in services which can impact the level of revenues and profitability
in a negative manner (Gokhberg and Roud 2016).
There is rivalry among the existing competitors in the advertisement industry
wherein there are high issues with each campaign for building high credibility along with
large type of budgets for the ad campaigns which makes the negative impact high. Moreover,

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the high premium of scarce resources can create high impact on the effectiveness of the
services delivered by them.
On the other hand, the threat of substitute products does not create any negative
impact as there are no absolute substitutes for the advertisement campaigns as the constant
evolution of the technology which includes e-commerce or the social media offers different
new channels for the forward type of integration with low cost of switching (Binti Paizand
Isman 2017).
Lastly, threat of new entrants is the other factor which creates positive impact on the
advertising industry as there is high level of entry barriers which impacts the effectiveness of
the services which are delivered by them. In addition, it is difficult for the companies who are
new in attaining the deep contact with regional kind of demographics or attitudes or values
which are required in the industry and it impacts the efficiency level negatively as well.
Conclusion
Therefore, it can be concluded that in the last few years there is huge level of changes
incorporated in advertising industry that has contributed towards creative as well as customer
focused strategies. As commented by authors, the entire advertising and marketing industry is
mainly known for creative along with award-winning works and it is mainly working as the
motivational type of factor for different kinds of players present in the market giving them
the competitive edge.

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References and Bibliography
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access. Electronic Markets, 27(2), pp.101-109.
Chung, J.Y., Berger, B.K. and DeCoster, J., 2016. Developing measurement scales of
organizational and issue legitimacy: A case of direct-to-consumer advertising in the
pharmaceutical industry. Journal of business ethics, 137(2), pp.405-413.
Gokhberg, L. and Roud, V., 2016. Structural changes in the national innovation system:
longitudinal study of innovation modes in the Russian industry. Economic Change and
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Gupta, P., 2017. Innovation in Advertisement Using Technology. Journal of Accounting,
Finance & Marketing Technology, 1(03), pp.41-47.
Hackley, C. and Hackley, R.A., 2017. Advertising and promotion. Sage.
Islam, A., 2020. The Impact of Augmented Reality Advertisement on Customer Engagement
in the Era of Connnected Consumers. In Handbook of Research on Innovations in
Technology and Marketing for the Connected Consumer (pp. 289-314). IGI Global.
Johnson, Gerry., Whittington.R, Scholes, K., Angwin, D., and Regner, P., Exploring
Strategy: Texts and Cases, 11th Edition, Pearson, Australia
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K.B., Kim, K.H. and Suhr, K., 2018. Korean and conventional medicine tourism industry

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trends as indicated in medical tourism advertisement images: qualitative research using data
from medical Korea 2015. Asia Pacific Journal of Tourism Research, 23(7), pp.703-713.
Mohideen, M.A.K. and Vignesh, M.A., 2019. Dimension of Mutual Fund Advertisement
through Content Analysis in Indian Mutual Fund Industry. Journal of the Gujarat Research
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Nuyts, P.A., Kuipers, M.A., Cakir, A., Willemsen, M.C., Veldhuizen, E.M. and Kunst, A.E.,
2018. Visibility of tobacco products and advertisement at the point of sale: a systematic audit
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Takata, H., 2016. Effects of industry forces, market orientation, and marketing capabilities on
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