INTRODUCTIONWRSX (Waldron Roux Silberstein Xao) was founded 15 years ago with the merger of three agencies: a long-established London-based advertising agency, WWMV and new partner agencies in New York (Silberstein & Lord) and Paris (Roux Toussaint Berthe).

It appears to be a financially sound company. In the last financial year it has incurred a considerable amount of profit although the share prices appear to be in danger following the unproven allegations of bribery in the Paris office and the resignation of the CEO Rapheal Roux.

In this report we will do an overall analysis of external and internal factors, the environment the company is operating and its current position in the industry.

ContentMarket SegmentationFinancial performanceShare PricePESTELPorter’s Five ForcesCritical success factorsNon-Financial PerformanceValue chain analysis Cultural frame workStrategic capabilitiesSWOTExpectation, purpose and

conclusion

Market SegmentationRevenue by region: (£m)N. America 100.0W. Europe 50.0C. & E Europe 30.0Asia Pacific 20.0

Revenue by division: (£m)Advert. & Media 76.0Info &Consult. 48.0 PR 28.0Branding 22.0 Communication 14.0Media 12.0

WRSX: North America[New York] ; Western, Central and Eastern Europe [Paris and London] and Asia Pacific [Singapore]

NORTH AMERICA

EUROPE ASIA

WRSX key financial performance ratios:

Ratios WRSX group Industry Average

PBIT Margin 16.5% 19%

Staff costs Ratio 63% 58%

Return on capital employed

12.9% 15%

Gearing ratio 45.5% 42%

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9

PESTEL Analysis (environment)Political: Though it is situated in highly developed economies, there are major risks associated due the effects of global regional, national , economic and political conditions resulting changes in legal and regulatory environment for marketing and advertising companies like WRSX around the world.

Economical: Fluctuations in economic growth and currency exchange rates. Low interest rates in USA and Euro Zones and higher in UK.

Social: promotion of CSR policies by investing in medication and other social projects and investment in reduction of the carbon foot-print of the business, maintaining work-life balance, doing meaningful work and taking time out .

Technological : Strength in technology and digital media (developments in future)in US market. Internet based market research is one of the latest innovations which WRSX can make use of to reach out to its customers globally.

Environmental: attempts of reduction in carbon-footprints through initiatives like heat-efficient buildings, ability to generate their own electricity, recycling of waste, and reduction in business travel.

Legal : introduction of data protection law and a strong regulatory policy on the use and disposal of personal data. Stringent employment laws to protect employees.

Porter’s Five Forces

Critical Success Factors

Creative quality and a range of advertising and marketing communications services to support targeted clients globally.

The 3 success factors behind maximum revenue generation from the US market are:•The size and power of the American market.•The size and power of the US capital market.•Strength in technology and digital media.

Market research capability and understanding of market segments and channels.

Non-Financial PerformanceOn the basis of ADCOM industry benchmark survey Results

Industry average score each NFPI

Category Performance WRSX Score

Management of growth Below average in entrepreneurial capability, managing acquisitions and in ownership of trade names and intellectual property rights

43.5

Management of risk Traditionally performed well but dropped below average due to sustained investments in acquisitions and recent corruption scandal

41.3

Leadership capability Facing problem of attraction and retention of highly quality personnel due to low Strategic leadership capability.

39.2

Non-Financial PerformanceOn the basis of ADCOM industry benchmark survey Results

Industry average score each NFPI

Category Performance WRSX Score

CSR Below average in terms of ethical stance, social profile, corporate governance, sustainability profile/carbon foot-print

38.5

Client attraction & retention

High in market research capability, understanding of market segments, creativity and innovation but below average in terms of account management structure and value added to clients.

52.0

Procurement and supplier management

Bad in terms of management of production buying and in maintenance of relationship with suppliers

38.7

Average 42.2

Value Chain AnalysisFirm Infrastructure: weak management lack of leadership capability and is far behind the competitors

HRM: weak in terms of managing change and in its ability to attract and retain high quality personnel in key position in the business.

Tech Development: Moderately Strong in terms of technology and digital media (developments in future)in US market

Procurement: bad relationship with the suppliers giving an advantage to the competitors.

Inbound Logistics: inefficient use of group buying power to buy media for purchasing advertising space and other media for clients.Supplier Relationship.

Operations:Below industry average in terms of management of information and operations.

Outbound logistics:Media planning

Media packaging

Branding

PR

Marketing and sales: resulting in excellent because of developed technological development

Service : because of good understanding of market research, the client attraction and retention is above average in the industry. Although currently there are changes for the decline in this segment because of corruption scandal

Mar

gin

Cultural Frame of ReferenceInternalIrregularities in the revenues and cost even after the three non- executive directors were appointed by the shareholders.No proper code of corporate governance.

External•Currently situated in USA, Europe and Asia Pacific•Changes in US and Europe demographics with a higher proportion of retirement age.•Changes in consumer behaviour and lifestyle that has aided in the development of a larger consumer market in Asia Pacific, Eastern Europe and Africa.•Study the consumer behaviour in the Muslim world and target them by assuming they have similar value system and beliefs as the westerners.

Strategic Capability• Maintain the dominance in the US market.• Opportunity of growth in Asia.• Explore opportunities in Africa and the Muslim world.• Changes in manufacturing bases and service centres outside Europe and US

to maintain labour force, numeric flexibility and avoid costly employment litigation.

• Should concentrate on managing growth instead of managing growth to compete against low-cost service providers from Eastern Europe or Asia Pacific.

• Achieve synergy by exploiting economies of scale and use the group buying power for buying media for clients.

• Aim at becoming a specialist service provider and increase value added to clients.

SWOT Analysis Internal Analysis Strengths: •creativity and innovation•Range of advertising and marketing communication services to support global clients.•Financially sound (all financial ratios are positive- PBIT, staff cost ratio, ROC, financial gearing and current ratio).•Customer driven communication company built around highly specialised business units.•Strong market research capability and understanding of market channels and segments.Weaknesses: •Loss of a big account in New York which resulted in bad reputation.•Allegation of bribery to gain business lead to the suspension of CEO, Raphael Roux. •Lack of strategic focus and strategic drift due to weak organisational structure•Weak in terms of :

– Entrepreneurial capability and management of organic growth– Management of operational market and business risk– Strategic leadership capability

•No stated code of corporate governance as the issue is managed under local level .

SWOT Analysis External analysisOpportunities:•Explore opportunities in Asia, Middle East and Africa•Growth in digital technologies which will provide big opportunities as the media landscape fragments and consumers’ habits evolve.•Diversification into brand identity and digital media.Threats:•Underperformance of shares in advertisement sector (since 18 months ago).•Performed below the industry average, information management and in its ability to lead and manage change and retain high personnel•WRSX not a global player and not among the top 20 brands in the industry.•Decreasing goodwill due to the corruption scandal.•Not among the top four specialist provider of services.•Loosing existing clients or failing to attract new ones.

Expectation, Purposes and Conclusion

With respect to the services:• need for more creativity and innovation, strengthening the brand and greater differentiation with regards to the competitors.•Aiming at becoming a specialist provider•Adding more value to the clients.With respect to the company:• Improving the goodwill/ reputation.•Improving relationship with the suppliers.•Appointing skilled managers and improve the leadership capability for better operations.•Create structured corporate governance•Investment in reduction of the carbon footprint of the business.•Bring an increment in the share-prise which had fallen because of several reasons.•Look at efficiently using the group buying power in terms of buying media for the clients.•Favourable business environment and should make efficient use of resources available