Benefits of Conducting an Internal Analysis as Part of the Strategic Planning Process - Research Paper Example

?Management The CEO of WRSX has asked you to write a short educational piece that will be given to the Board of Directors, explaining the benefits ofconducting an internal analysis as part of their strategic planning process. Contents Contents 2 Introduction 3 Internal Analysis 3 Resource Based View 3 SWOT Analysis 4 Recommendation and Conclusion 5 Reference 6 Bibliography 7 Introduction WaldronRouxSilbersteinXao, merger of WWMV (London based), Silberstein & Lord (New York based) and Roux Toussaint Berthe (Paris based), is a global advertising and marketing communications company. The aim of the merger is to provide a wide range of marketing and advertising services to the customers as per their needs of creative quality. The Paris based company is also listed in the London stock exchange. The company is specialized in the areas of pharmaceuticals, telecom industry and government sector. They operate in United States, Europe as well as in Asia pacific. In a survey conducted on the marketing communications and advertising industry the score of the company was below average. Though the customer retention and attraction capability of the company is pretty good, but in other areas of business the performance of the company is not attractive for the investors. This report is an attempt to analyze the reasons of underperforming of the shares of WRSX group and recommend about the changes that may be undertaken by the company management to gain more market shares. The researcher will conduct internal analysis of the company and describe the benefits of internal analysis to the board of directors of the company. Internal Analysis For conducting the internal analysis of the company the researcher will use the SWOT analysis tool and the resource based view analysis (Snell and Bohlander, 2012, pp.53-54). Resource Based View The resource based view analysis of a company is conducted to analyze the resources available to the company which can be profitable when it is used strategically. For analyzing this, VRIN framework has been made by the researchers. This framework identifies the valuable, rare, in-imitable and non substitutable resources of the company (helfat, 2007, p.45). For the resource based view analysis the VRIO framework is used to identify the valuable resources and utilized them at their best (Peng, 2008, p.71). The analysis of WRSX using the VRIN framework is as follows. Valuable: The valuable asset of the company is the capability of the team to perform locally. They understand the local customer needs more. Rare: The capability of the company to attract the customers and retain them is the best in the concerned industry (Sanchez, 2008, p.34). This capability will provide them above average return if they use the resources strategically. In-imitable: There are no such in-imitable resources of the company. Other companies in the industry can imitate these resources available to them (McKinney, 2008, p.2). As the advertising and marketing communications is a fast moving industry, so there is enough chance for the company management to develop such resources. Non-Substitutable: The non-substitutable nature of the asset of a company means that the company owns such asset that cannot be imitated by the competitors by any means, and meet the customer needs (Carter, Clegg and Kornberger, 2011, p.87). WRSX doesn’t have such assets which can be substituted by some other asset. Though the company has some valuable resources but they are not using those strategically at present. SWOT Analysis The SWOT analysis of the company is a popular tool for the analysts as it describes the strength, weakness, opportunities and threat of the company (Handlechner, 2008, p.10). Using this tool the management of the company can improve in the areas of their weaknesses, use the opportunities and can take effective steps for facing the threats for the company (Mello, 2003, p.43). The SWOT analysis of the company is as follows Strength: The Company prefers to provide service locally. They followed the ‘principle act’ locally when they operate globally. As a result, they can understand the needs of the customer better. The company is basically the merger of three companies. Later it has acquired many other companies as well. So the expertise of the three companies is in one place now, this is also true for the acquired companies. WRSX is specialized in sectors like healthcare, telecom industry and government sector which are known as the less volatile sectors. In the area of client acquisition and retention the company has performed better than the industry average. Weakness: As the company prefers to manage their operations locally, so there is no stated code of corporate governance in the company overall. From the financial statements it has been found that the asset utilization capacity of the company and the profit margin are below the industry level. Also the management has taken more debt than the average. WRSX has also not performed any notable responsibility for the society which has harmed the company’s reputation. Their leadership quality and the risk management structure are also not as per the industry level. Opportunity: WRSX has the capability of attracting the clients and retaining them. They have to use these resources, so that they can have the large client base which would help them to gain more clients. In this modern era they can also extend their presence in the digital media. The industry has significant market in the United States and the company has a good presence in the country. WRSX can extend their business by extending operations in more sectors. Threat: The global C.E.O. of the company has been suspended from the duties of the company due to irregularities. Many allegations of bribery are there against the company which may decrease the client base. Also the company doesn’t maintain a good relationship with the suppliers which can affect their business adversely. Some acquisitions of the company have proven not effective so the leadership quality of the company is under scanner. Recommendation and Conclusion Analyzing the company’s operation, analyzing their financial and non financial statements the researcher has concluded that the company has to change the important policies in the company. At first they should do ethical practices as much as possible. There should be a corporate governance code in the company though they can change their product locally. They should maintain a good relationship with the suppliers so that they can use their core capability of attracting and retaining the customers effectively, as it is not possible to retain customers when the company is not providing them quality goods and without suppliers it is not possible. Analyzing the company and the relative industry it can be said if WRSX use their core competencies strategically, they would definitely have more market share in the industry. Reference Carter, C., Clegg, S., and Kornberger, M., 2011. Strategy: Theory and Practice. Great Britain: SAGE Publications Ltd. Handlechner, M., 2008. Risk Management. Germany: GRIN Verlag. Helfat, C., 2007. Dynamic capabilities: understanding strategic change in organizations. Singapore: John Wiley & Sons. McKinney, R., 2008. Analyzing Your Company. Available at: http://www.tmg-smc.com/Articles/CompanyAnalysis.pdf. [Accessed: 4th March, 2012]. Mello, S. 2003. Customer-Centric Product Definition: The Key to Great Product. United States of America: PDC Professional Publishing. Peng, M., 2008. Global Strategy. 2nd ed. United States of America: Cengage Learning. Sanchez, R., 2008. A focused issue on fundamental issues in competence theory development. United Kingdom: Emerald Group Publishing Snell, S. And Bohlander, G. 2012. Managing Human Resources. 12th ed. United States of America: Cengage Learning. Bibliography Akio, T., 2005. The Critical Assessment of the Resource-Based View of Strategic Management. Available at: http://www.ritsumei.ac.jp/acd/re/k-rsc/ras/04_publications/ria_en/03_8.pdf. [Accessed: 4th March, 2012]. Creative Industries Research Institute, No Date. S.W.O.T. Analysis. Available at: http://www.ciri.org.nz/downloads/SWOT%20Analysis.pdf. [Accessed: 4th March, 2012]. Read More