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.
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 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).
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 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 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 around these competitive factors and it was decided to incorporate competitor strategies in business plans. I can recall that the consideration on the economic factors in China led to the formation of new employment policies in the fifth board meeting. The country gives more preferences to their resident companies and makes preferential laws to encourage their development. These markets owing to their economic development already have resident advertisement companies, which would pose threat to the British advertisement company (Gilpin 2016).
The social factors would influence the advertising company since the society is the end customer of the advertisements. The GDP in Britain and China are rising which means people in these societies have more disposable income. Moreover, China and Britain are experiencing population growth, whichmeans expanding consumer bases. The business organisations as a result are strengthening their promotions to tap this customer base. This means advertising companies would find a huge clientele and sources of revenue in China. However, the marketisculturally diverse from the United Kingdom as per Hofstede’s tool (hofstede-insights.com. 2018) (Appendix 6). This means that the advertising should design their advertisement presentations to suit these social perceptions and attitudes in these markets.
The technological factors would be of great importance to WSRX advertisement is a technology is a technology intensive product. Britain is technologically very advancement while Chinais developing its technological strength fast. The threat, which every business organisation faces in Britain, as well in the developing Asian markets is the threat of data theft. The business organisation must strengthen its data protection facilities while sharing data among its offices in Europe (London, Paris), the United States of America and the Asian offices (Westerman, Bonnet and McAfee 2014). I can point out that the advertising company can use the ecommerce in China to promote its services and offer services to customers round the clock. This market advantage which is present in China encouraged me to influence the board the direction.
The environmental factors are of great importance to every company especially with the strengthening of environmental laws all over the world. The advertising company must aim to reduce its exhaust output and wastes during operations. For the companies operating in Britain have to abide by laws like Environmental Protection Act 1990 (legislation.gov.uk. 2018). Similarly while operating in China; the company have to abide by the Environmental Protection Tax Law (loc.gov. 2018).WRSX must also abide by the legal systems of both the UK and China to operate smoothly in these economies. The company must abstain from resorting all sorts of corruptive practices while operating in China.The subsequent board meetings should revolve around the operating in China profitably and staying away from corruption.
WRSX requires conducting a SWOTanalysis in the light of the PESTLE analysis to form strategies to expand into Asia (Appendix 7). The overview of WRSX shows that its strength lies in its international presence in Britain, France, the United States and Singapore. The company is a public limited company listed on LSE and can generate capital the market. However, Brexit is likely to raise the cost of its European operations and Singapore is insufficient to tap the entire Asian market. The company must expand into other emerging Asian nations like China as well to exploit their resources and diversify the losses it would suffer post Brexit (Wan, Cai and Zhou 2015).
The Porters five forces model in analysed in terms of WRSX shows that the firm would operate in two capacities (Appendix 8). WRSX is a resident company in Britain where the British government would make laws to restrict entry of foreign companies. Since, it is a British company; it would have more knowledge about the macro environmental conditions of the country (PESTEL). The companies in Britain would opt for its promotional services compared to its foreign counterparts. Thus, it would enjoy more bargaining power in Britain compared to the foreign advertisement companies. The situation would reverse when the company would venture into Asian countries like China (Riasi 2015). The governments of these countries on make preferential laws to promote their resident companies. The clients in these markets would prefer resident advertisement companies to foreign companies like WRSX owing to better knowledge of the former about the customer preferences and social factors like culture. Thus, in the Asian market WRSX would enjoy less bargaining power compared to Britain. An analysis of the PESTLE, SWOT and Porter’s model clearly points out that a stronger presence in Asia is empirical to counteract the future challenges of Brexit. The analyses that Asian markets like China present vast business opportunities and challenges simultaneously. These factors require the company to make strategic choices to expand into Asia (Porter and Kramer 2019).
The markets of Asia according to my learnings are booming and are capable of providing revenue to diversify the losses British companies are predicted to face post Brexit which would require the company to make three strategic choices. The first strategic choice would be regarding the countries the company would expand into countries like China. The PESTLE analyses have influenced my decision strongly thus leading me to conduct the company’s own SWOT analyses based on outcomes of PESTLE. The performance of WRSX would be judged on financial performance indicators like profit and non-financial indicators like goodwill (Kordalska and Olczyk 2016).
The second strategic choice after screening the market to enter would be product line extension. WRSX should reframe or extend its product line to suit the tastes of customers in the chosen market of China. This would result in benefitting situation both for company and the customers in the new market.The company should integrate this strategic choice with its third strategy, integration of globalisation and localisation in its product line extension strategy. The international status of the company would enable it to attract MNC companies as its client (Rodriguesand Khan2015). Again, the WRSX should incorporate features typical to the Chinese culture so that the people in China can relate to the advertisements. The expected outcome of these strategies would be in my opinion high market performance of WRSX in the Chinese market. The financial results achieved were increase in clientele and increase in profits. The non-financial outcomes of the Chinese business would be enhancement of goodwill and market position.
I while making decisions and using them to influence the board meetings reflected on the macroeconomic conditions of the UK and juxtaposed them against China, the target market. The other managers who had knowledge about China have also influenced our decision making. The tools considered to make the decisions consisted of PESTEL, SWOT and Porter’s Model (Andrejevic 2014). The benefits like China’s vast market, low cost and opportunities to diversified risks played important role in shaping my decision to prefer China as the new prospective market. The management weighted these pieces of information gathered along with the alternatives and finally China was opted as the market of entry in the first board meeting.
During the board meeting, the decisions taken by me were entirely based on the research of the external and internal factors and the trend with which the share price increased. The financial performance of the company indicates that it had earned a hike in the revenue scheme and has resulted in the increase in gross profits. The mater of providing flexibility to the work is more of the demand based on the trends in the market. Recent market demands that as a manager of the modern era it is necessary that I remain flexible in setting up business camps for the welfare of WRSX Group.
The results that have been achieved in the matter of finance and non-finance indicates that the company underwent profit. The meetings indicate that the average growth in the non-financial department is also high. The only drawback that can be seen from the analysis of the board meetings is that the CSR activities of the company have dropped by one percent in the fifth board meeting. In my opinion, this can be a concern for the managers as CSR is one of the important organisational activities that are needed to be undertaken.
At the start of the board-meeting phrase, I had initiated that external factors that have an impact in the setting up of the company be analysed with caution. However, the improved decision-making activity with the board member sessions has opened up opportunities to mitigate the external threats in the market by making influential marketing decisions. These decisions include improving the financial position of the organisation and including policies that are more family friendly. Furthermore, flexibility provided to the working condition in the organisation is also an influential decision that is undertaken.
I can reflect upon the board meetings and seminars I have attended and point that that they have important contribution to my learning. The first board meeting clearly points out the future strategy of WRSX to enter China along with consideration for the challenges the market would present before it. This agenda is supported by the agenda adopted by the second board meeting, the objective of reducing customer turnover. The third board of great significance because it consists of future human resource strategy WRSX would adopt in China like outsourcing. The fourth board meeting concentrates on considering competitor strategies while making strategies, right from the apex level. The fifth board meeting was on employment policies to be adopted to adopt to the changes in business operations and expansion into China. The last board meeting was on increasing growth opportunities for the company. I can reflect on the board meetings and point out that they are actually steps of change management shown from the top bottom view. The first board meeting was the torchbearer of the change management where it was decided that WRSX would be entering China besides being present in Singapore. The subsequent board meetings were actually advancements towards the change like outsourcing a part of the Chinese operations and the human resource policies.
These contents like the board meetings have helped me to shape my strategic decision making capabilities. I have realised that human resource are one of the most significant stakeholders of business organisation and successful change processes require strong support of employees. The business organisations need to hold board meetings to decide this allocation of employees to align them to the future business requirements. I have also learnt that macroeconomic environmental conditions have very important implications on the business decisions of the organisations. I have gained knowledgethose opportunities to enter new markets present immense business opportunities. However, they present new challenges owing to the particular market conditions of different countries. They also call for business organisations to change their modes of operations including resource allocations. These decisions have to be taken at the apex level to ensure their successful enforcement in the organisations and acceptances art all levels.
Computer simulation has added tremendous value to the studies revolving around strategic management. The presentations of the board meetings are extremely realistic due to the use of simulation tools. They help business schools to create realistic situations among the students during study of project management. I can point out that the presentations of WRSXas if meetings are lifelike which has helped me to imagine that I were present at the board meetings. This perceptions enforced better understanding of the simulated situation of entering China, which enabled better analyses of PESTEL and SWOT. This helped to form more concrete strategies regarding the extension of company into the Chinese economy. These online simulations like Hofstede’s tool help understanding culture of the new markets, which in turn would help me to form more marketing strategies. I can point out that these simulations have made strategic management more challenging which encourage learners and researchers to brainstorm and come up with new ideas. Thus, I can point out that simulations enable graduates to sharpen their managerial skills. Simulations create a feeling of virtual group work, which helps candidate hone their communication and teamwork skills. Thus, simulations enable management students development their managerial and strategy making skills.
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Strengths: |
Weaknesses: |
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1. The company has operations in Europe (UK and France), the US and Asia (Singapore). 2. Listed on LSE, can raise capital from stock market. 3. Product line to suit needs of diverse industries like automobile and pharmaceutical. 4. Huge revenue. 5. Able leadership |
1. Brexit 2. Strong competitors 3. The Asian market is to big to be controlled from Singapore |
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Opportunities: |
Threats: |
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1. Expanding into other Asian countries. 2. Take advantage of growing corporate sector and macroeconomic factors of Asia to expand (PESTLE analysis) 3. List on other stock exchanges like NYSE and Shanghai Stock Exchange. |
1. Terrorism. 2. Arms race in Asia-Pacific regions. 3. Development of indigenous advertisement companies |
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Threats of new entrants: 1. Barriers to entry 2. Government policies. 3. Customer loyalty 4. Product differentiation. |
Threats of substitutes: 1. Propensity of clients to substitute. 2. Availability of substitutes.
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Bargaining power of customers: 1. Buyer concentration vsfirms’ concentration ratio. 2. Information available to buyers. 3. Buyer price sensitivity. |
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Bargaining power of suppliers: 1. Substitute available. 2. Distribution channel strength |
Industry rivalry: 1. Competitor companies like advertisement companies based in Asia. 2. International advertisement companies operating in Asia |
References:
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