The Company WRSX - Strategic Capability, PESTEL and Porters Five Forces, Analysis, Porters Five Forces - Case Study Example

Strategic Position Name: Lecturer: Course name: Course code: Date: Expectations and Purposes Services The company WRSX expects to create quality and a variety of advertising and marketing communications to support global client targets. This company requires increased creativity and innovation which will lead to more development to the company. The aim of the company is to become a specialist provider in order to improve the competition in the business processing. As a specialist provider, the company can provide more service to the existing customers and attract more new customers for the company. WRSX is also adding more value to the service and attract more potential clients to bring the profit. Company The company is quoted in the London stock exchange but has been underperforming in the last 18 months. Goodwill and positive reputation is extremely essential for a company. So WRSX should keep an outstanding reputation in this area and let the clients know it is a wise choice when they choose WRSX to do marketing for them. It also has to improve the relationship with the suppliers because now WRSX does not have a healthy relationship with suppliers which will bring the negative influences of the channel for the resources. Moreover, skilled managers will bring the principal function for the company so appointing skilled managers to the suitable position will let these managers bring the positive effects on the company. Leadership and managing the whole staffs of the company play the main role in every company, thus the company should improve the leadership capability for a better operation. The company also have to create structured corporate governance and provider more investment in reduction of the carbon footprint of the business. WRSX also aim to build a favourable business environment because it will bring more external advantages for business with a good environment. Plus, WRSX should use the resources efficiently because wasting of resources will cause more cost for the company. So WRSX should also consider more about the efficiently using of resources. Environment (PESTEL Analysis) Political Owing to the economic recession affecting the highly developed economies, WRSX would face many risks from the effects of global regional, national, economic and political conditions. Political can be treated as the action of the government which will influence the business situation for the company. Governments are working hard to avoid the downtown of the economies and protect the business of the company. Recent conflicts and terrorist activities depict the rising gap between Western nations and some of the Muslim population. Westerners show little attempt to tolerate the Muslim mind and assume they have similar value systems and beliefs. Economical There is a sustained growth in the world economy with the United States globally accounting for 50% of income obtained from advertising and media communications. In the past two years, growth forecasts rose by 4%. However, medium and long-term growth prospects are highly risky in the years to come, affecting client businesses and WRSX group. The likely risks are losing existing clients, failure to attract new clients, fluctuations in economic growth rates, interest and currency exchange rates. Others are changes in legal and regulatory environment of media and marketing communications sector. In addition, other predictions read a rise in oil prices and consumer debt in the US and fall of the housing market interest rates in the UK. In the long-term, consumerism in china and India is expected to surpass the decline in revenues of the US and Western Europe. Chinas population stands at between 1.3 and 1.5 million and at least 200 million people afford goods and services from WSRX group. In china, there are over 500 million mobile phone subscribers, many of which are in China mobile while India has stimulated its economy to about three to four times the Americas. Africa has increased purchasing power of FMCG brands especially Egypt and northern African countries. The Muslim world is another target only if western governments try to understand the Muslim world in the years to come. Social Consumer behaviour of US and Western Europe expects domination of retirees in consumer and service demand. They are keen on spending their kinships’ inheritance. Graduate age consumers will show a shift in work life balance, quality of work and taking the time to help communities. Governments are also focused on stimulating birth rates. Japan also experiences decline youth and overall population. Most leading corporations choose produce CSR reports into the annual financial reports in order to promote their CSR policies to shareholders. CSR is hugely essential for the company’s reputation, so the company will promote the CSR policies through investment in education and other social projects and investment in reduction of the carbon footprint of the business through initiatives. Technological The Internet brings prestige brands to an enormous present day audience, previously unaware of the goings on in the world. Similarly, multi-nationals especially in the IT industries, usurp full advantages global recruitment ability and transfers global graduate trainees around the world to meet business demands. In the US market, it owns modern technology and digital media for the company. Internet based market research is one of the latest innovations. With using these modern technological markets, WRSX can keep more clients and owns more clients globally. Companies are switching from traditional advertising like TV to internet and mobile phones. Environmental WRSX make investment in reduction of carbon footprint of the business through initiatives such as more heat-efficient buildings, ability to generate their own electricity, recycling if waste, reduction in business travel etc. and through improving theses elements to keep a suitable environment. Many WRSX client companies, the packaging amount and recycle-ability are becoming a more significant issue year on year. Legal Western Europe and the US have strict employment laws designed to protect employees. WRSX client companies are transferring their manufacturing concerns outside their geographic areas so as to maintain the labor force numeric flexibility and avert costly employment litigation. On the contrary, it can backfire if employment practices impacting on health and safety or child labor is publicized. Apparent damage to brands is a consequence of unfavorable public relations on this issue in recent years. It is anticipated that WRSX uses the introduced data protection law to contain the legality of the company by using strict employment laws to protect employees. Protected employees become motivated and increase work efficiency. Porter’s Five Forces: If considering Porter’s Five Forces, it owns five parts of it that consist of new entrance threat, buyer power, supplier power, substitute threat and rivalry. Threat of new entrants This area is remarkably high and the rate is growing. Many new companies enter this area in order to make a profit. So it owns high competition. Many companies especially in India and china are investing in media and advertising communications but are yet to bet already established companies like WRSX. They will face difficulties in swaying the loyalties and customer retention prowess of WRSX. Buyer power It is medium because as a media company the type of customer is fixed and the power is now have the trend of decreasing. Purchasing power of US and Western Europe is unusually high although china and India, with a massive population are catching up by 4%. Supplier power It is low and now also gets a trend of decreasing. The company is looking for suppliers with media buying effectiveness, those who can exploit the synergies and deliver economies of scale. In addition, they should posses effective production buying and management of suppliers or their spending control. Substitute threat TV and road shows still prove as ready substitutes for mobile phones and internet. It is exceptionally high and increasing because of the high competition of this area. Without high competition other companies will easily replace you and own the markets. Rivalry It is extremely high and the competition of this area is unusually violent. There are a number of capable competitors from India and china like china mobile. These competitors offer equally attractive products and services to chines and Indian consumers. So, WRSX group most likely has little power in the situation, since suppliers and buyers goes elsewhere if they don't get a fair deal from WRSX. Strategic Capability (SWOT Analysis) Internal Analysis Strengths: In the management of financial risk, WRSX performs well in benchmark surveys. It performs highly on corporate social responsibility (CSR) according to previous surveys showing high scores for WRSX with regard to ethical stance and the social profile i.e. social contribution to the communities in which it trades. Client attraction and retention is a plus for the company as it tops in its market research capability and understanding of market segments and channels. Similarly, it scores highly in terms of its creativity and innovation. Weaknesses First of all, WRSX is bedevilled by a recent corruption scandal that damaged the reputation score. It has weak organisational structure leads to lack of strategic focus and drift. The Group does not manage well in Entrepreneurial capability and management of organic growth and Leadership Capability. The Management of Risk has dropped recently due to sustained investment in acquisitions and the corruption of Raphael Roux in Paris in few years ago. Also, it doesn’t have a good relationship with the suppliers. There is low score for corporate governance for WRSX. WRSX performs badly in management of production buying, building and exploitation of healthy relationships with suppliers. It performs badly in synergies it achieves by exploiting economies of scale across the Group. It also fails to employ its Group buying power to procure media for clients. External analysis Opportunities: The company has immense opportunities Asia, Middle East and Africa. The company should take advantage and focus on developing digital technologies as the digital media has been growing fast over the past ten years in advertising. Moreover, it should expand diversification into brand identity and digital media. The size and power of the American market of more than 300 million people remains homogeneous market as opposed to the European Union heterogeneous markets. This asserts the power and size of US capital markets capable of boosting a company which intends to raise debt or equity capital, America remains cheapest place to beat. Finally, owing to technological and digital media strength, China challenges the US in terms of market size and power in the future. So it is worth investing in china. Threats WRSX currently faces massive emergence of channels that provide specializing service to common interest group or demographic profile. The big problem is that a company might switch market budget away from tradition media such as TV even though there are many opportunities. Also, internal communications within large multi-nationals and how they enhance the corporate brand is becoming more essential as an issue and demanding the expertise of companies in the marketing communications sector. There are low-cost marketing service providers from Eastern Europe or Asia Pacific that concentrate on growth instead of concentrating on value, and what WRSX can do to take advantage of the growth of digital media. Furthermore, WRSX is not one of the top for specialist provider of advertising services and we are not global player. The recent scandal destroys the value of our group substantially, which leads to losing customers or failing to attract customers. Influence of History and Culture From the WRSX profile, the company has been developed through mergers and acquisition from New York, Paris and London. Due to differing structures before merging, the company can provide a range of various businesses units with a great deal of autonomy and thus adds more effectiveness to the services offered to customers. With the strength diversification culture, it is easy to understand what local customers need and that is what drives our customer excellence. The aim of WRSX is to create quality and variety of advertising and marketing communications services to support targeted global clients. It is also influenced from those original companies from London, New York and Paris before merging. Westcott Waldron Morrissey Vickers was one of the new-wave creative London agencies of the late 1970’s. Silberstein & Lord dates had a reputation of highly creative boutique and they attracted some of the top Fortune 500 companies as clients. RTB had a reputation of producing highly creative award winning in the French tradition. WRSX also need to review strategies with a higher proportion of retirement age in USA and changes in consumer behaviour and lifestyle that has aided in the development of a larger consumer market in Asia Pacific, Eastern Europe and Africa. It also essential to study the consumer behaviour in the Muslim world Conclusion WRSX is yet to become an international player by maintaining its position in US market as a priority, especially concerning of the demography changes in USA and consumer behaviour changes in Asia Pacific, Eastern Europe and Africa. Besides, it has to improve on its eentrepreneurial capability, management of organic growth, leadership capability and risk management. The company should concentrate on managing growth instead of managing growth to compete against low-cost service providers from Eastern Europe or Asia Pacific. The most essential thing is how and what we are going to do to take advantage of the growth of digital media. Overly, WRSX has a lot of influence from the original companies before merging. The objective of WRSX is to make more profit and it needs to increase the creativity and innovation in order to develop the business of this company. Its aim should be to become the specialist organisation and provide more services to clients. The government takes action to avoid downtown and protect the business of the company when the economical situation of a company is not very good owing to negative world economy. CSR report is good as well as the financial report to show that these issues have been noticed by the company. The internet based market is an advantage to connect with clients globally. The company needs to increase the environment of the workplace to keep a suitable environment and use employment laws to protect employees. Of course, competition should be kept low from efforts of competing businesses while markets should help to increase the clients and attract more valuable clients. 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