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The WRSX group is an international integrated agency. The company has subsidiary agencies in New York, London, Paris, and Singapore (WRSX 2011). The main goal of the company is to make effective advertisement contents for customers and establish sustainable marketing relations. The company renders services in media, public relations, research, branding, film production, and sports marketing. During my three-year period as a director in WRSX, the company has experienced a successful business performance. Prior to my turn as a director, the company was facing increased competition from other advertising firms (Mitcham 2013). To address on the above issues, the board of directors met severally to come up with the strategic decisions. Notably, after the company implemented the decisions the company has progressively gained its prominence in the international market. The report below focuses on a group of related decisions responsible for the above outcomes.
Related decisions taken
As indicated above, the present performance of the company is comparatively successful. The company is progressively gaining competitiveness in the advertising fraternity (WRSX 2011). A successful business performance was witnessed after the company implemented drastic and strategic decisions. The decisions implemented are getting additional mergers, acquiring rival firms, and expanding into new markets. For instance, during the second board meetings the directors agreed to acquire a company called RMJ. At the time of the acquisition, the company recognized that the purchase of the rival company was a risky adventure. Another strategic decision that has propelled the growth was the acquisition of West Coast. With the acquisition of the firm, the company realized a growth in its market share (Barney & Hesterly 2008). Because of this, the companys rate of growth increased leading to more prospects.
With the acquisition of the above companies, the size and reputation of the company increased. The acquired companies experiences in their regional markets have been a benefit to WRSX (WRSX 2011). As such, each company had different skill sets in different units and regions, which the company has exploited to the best of its ability. Owing to this, the customer needs and service delivery have been enhanced. Equally, the acquisitions enabled the company to expand its operations into new geographical regions. Through this, the company gained a competitive advantage against its rivals leading to an increased market share. Through the acquisition, the company has gained new opportunities in the market to fill prospective niches in the future (Lynch 2012). The opportunities will be realized even if the company has to change what they offer their customers just to fill this niche in the market.
In addition, the company has experienced a successful business performance because of the decision to expand their operations into the Asian markets. Taking into account fast emerging economy of Asia, especially in countries like China, Japan, and India, the company in the last three years has devoted more efforts towards the development of strong links with these countries. Similarly, The Company has identified Africa as the continent of opportunity. The above initiatives represent significant changes in the companys position. Through this, the company has been able to increase its market share in the global market.
PESTEL and Porters five forces frameworks were utilized during the decision-making processes. In the board of directors meetings, it was noted that the models for analysing business performance were essential in determining the effectiveness of the choices. In this respect, the Posters five forces model came in handy. The model is a detailed analysis of the five forces in the industry, which determines the intensity of competition and the profitability of the company (Quinn & Mintzberg 1999).
The five forces were very vital since the combination of the five forces determined whether the strategic choice was attractive or unattractive. Unattractive choice implied that the five forces reduced the overall profit of the organization. Just like any other business organizations, the company encounters the five forces in their day-to-day activities (Wit & Meyer 2010). The forces are threat of new entrants, threat of substitute products, bargaining power of buyers, bargaining power of suppliers, and intensity of competitive rivalry. The above theory supported the decision because through it the company was able to identify its major rivals and acquire some of them in a bid to tame competition.
Another framework that was utilized during the decision making process was the PESTEL model. The model aided in market evaluation and assessment of external factors that have an impact on the profitability of an organization. Its acronyms in order stand for political, economic, social, technological, environmental, and legal factors. The above factors are crucial in the determination of the companys success. Currently, the company enjoys a number of positive macro-environmental factors in the countries it operates. The factors are good government policies, favourable legal policies, low interest rates, and minimal inflation levels.
With the help of PESTEL model, the company was able to come up with a decision to make WRSX the agency of choice for Asian brands. The model made it possible for the analysis of a number of social factors such as family set ups, social classes, and lifestyles in Asia (Grant 2010). The above factors offer a good environment for the growth of the WRSX. The economic factors in the Asian countries analysed favour the growth and profitability of the company positively. As such, Asian economy has improved significantly in the last few decades. Thus, most of the families in the selected countries have decent salaries hence can purchase products and services from the company (Mintzberg & Ahlstrand 2009).
The theory supported the decision because the companys expansion into Asian countries has enhanced its growth in the international market. Similarly, the theory has been helpful in the implementation of the decision. Failure by the company to monitor the changing social trends and patterns may lead to reduced profitability (Johnson & Scholes 2011). By predicting the changes in macro-environmental factors, the organization has been able to develop policies and structures strategically to address the situation. Therefore, the success of WRSX can be attributed to management actions with respect to PESTLE factors.
To what extent did your assessment of the strategic position and strategic choices change or evolve over the three-year period?
At the beginning of my three-year period at WRSX, it was apparent that the company was facing a number of challenges (Mitcham 2013). As such, the company was facing increased competition from other advertising firms. Similarly, the company was faced with huge operational cost. According to my assessment of the companys past position, it is evident that the management had to implement various strategies to increase its international growth. The strategies selected by the directors illustrated pertinent ways through which the company could enhance its international market share.
For the last three years, the companys strategic position and strategic changes have evolved progressively. As illustrated below, new ideas have been emerging forcing the company to amend its strategies. Faced with increased competition, the companys strategic position has been to be among the top 20 advertising firms in the world. The company acknowledges that the position can be achieved with the help of different agencies situated in different countries. To achieve this, the company has been trying to woo new customers and sources of income. The first step that was taken towards the realization of the initiative has been evidenced through the gradual change of emphasis of the company.
Taking into account fast emerging economy of Asia, especially in countries like China, Japan, and India, the company in the last three years has devoted more efforts towards the development of strong links with these countries. The above initiatives represent significant changes in the companys position. In the past, the company showed interest in European and American markets. The changes are very important for the company as they guarantee further development and presence of customers at difficult times of world crisis.
My original analysis had identified two strategic choices that the company had to undertake to be competitive in the international market. The choices were to acquire additional mergers and purchase of rival firms and elimination of all loss making ventures from the company. Earlier, the company had an option of venturing into the Chinese market. The option was later dropped after it was realized that the company would encounter too much competition from the Chinese firms. After the above option was dropped, the company had to search for other means of expanding their market share through acquisition. Thereafter, the company acquired one of the UKs competitors called RMJ. Another change that occurred was witnessed during the acquisition of West Coast. With the acquisition of the firm, the company realized a growth in its market share. Because of this, the companys rate of growth increased leading to more prospects.
Equally, to decrease the cost of operations the company implemented key changes. To reduce the operational costs, the company had intended to outsource some of its core services. After deliberation with the board of directors, the intention was dropped because the act could lead to a reduced control on the workforce. Later the company implemented backward integration into reprographics. Through this, the company enhanced its competitive advantage in the industry cutting back on operating cost.
References
Barney, J., & Hesterly, W 2008, Strategic management and competitive advantage: Concepts and cases, 4th ed, Pearson/Prentice Hall, Upper Saddle River. Web.
Grant, R 2010, Contemporary strategy analysis, 6th ed, Blackwell Pub, Malden, MA. Web.
Johnson, G., & Scholes, K 2011, Exploring corporate strategy, 9th ed, Prentice Hall, London Web.
Lynch, R 2012, Strategic management, 6th ed, Financial Times Prentice Hall, Harlow. Web.
Mintzberg, H., & Ahlstrand, B 2009, Strategy safari: The complete guide through the wilds of strategic management, 2nd ed, FT Prentice Hall, Harlow, UK. Web.
Mitcham, C 2013. Advertising Industry Overview. Web.
Quinn, B., & Mintzberg, H 1999, The strategy process. Prentice Hall. London. Web.
WRSX, 2011, Global Advertising & Marketing Communications. Web.
Wit, B., & Meyer, R 2010, Strategy: Process, content, context, 4th ed, Cengage Learning, Andover. Web.
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