APPENDICES
APPENDIX 1 – STRATEGIC POSITION
THE ENVIRONMENT
WRSX is operating in an environment about to see some drastic changes; the United States (US) will see a decline in
revenues offset by an increase of consumerism in Asia-Pacific countries like China and India; the growing population of
Muslims (set to reach 30% of the world population) will require a new approach to advertising; new technology in todays
word making it easier for consumers to fast-forward through commercials deeming traditional TV advertising obsolete;
adverts distributed through different channels as a means of entertainment alone creating a buzz on social media being
viewed and shared more than a standard advert; increasing aspirations for globalisation of brands requiring multinational
marketing agencies and consultants and the growing ease of segmented communications through social media profile,
groups, blogs, and community groups.
Money spent on advertising is estimated to be around £300bn worldwide and expected to increased by £40bn within three
years. Whilst the global advertising revenue is dominated by traditional channels (TV and newspaper), the environment is
expected to see a radical development in the area of online advertising (digital and new media) from search engines
generating revenue from paid searches, mobile phone advertising and internet enabled TVs – to name a few technologies
creating new marketing opportunities. North America, Western Europe and Central and Eastern Europe lead in advertising in
terms of region with Asia Pacific, Latin America and Africa and Middle East sharing just 24% advertising revenue – though
this is expected to change with the strong materialisation of consumer brands in areas of the world where consumers with
brand awareness are in the minority. Latin America grew 42% in the last quarter of last year with China and India growing at
35% and 19% respectively.
Muslims currently number 1.5 billion people, that's a quarter of the world’s population, this is set to increase to 30% of the
population over the next few years. There has been little attempt from Western countries to understand the value systems
and beliefs of the Muslim community, assuming theirs are similar to ours, which is likely very untrue. It is clear that
companies must make an attempt to understand this community in order to incorporate this large demographic in their
future.
VHS and DVD recording are no more thanks to the introduction of DVR technology which is capable of recording as many
shows simultaneously as your device can receive to a hard drive for later viewing. This means many more shows are being
watched from a recording allowing the viewer to fast-forward through commercial breaks and missing the traditional
television advert. Many agencies have realised this and opted for product placement within the program being shown for
products, but this is something that will need changes for the service industry.
Many agencies have realised the benefits of entertainment through advertising by creative fun and shareable campaigns
which viewers and consumers will want to watch on their own accord and likely to share with friends through social media
beginning its journey through the social-share-sphere.
Many more organisations aspire to become global brands and for this require multinational marketing agencies that are
able to carry a brand to new geographic locations with the most effective methods of expansion and launching of an
appropriate and attractive brand. There is expected to be an increase in the number of Asian-based multinationals
expanding into Western markets as seen with the likes of Samsung, Lenovo, LG, Hyundai etc. as well as an increase in
1103896
8
Western brands expanding into Asia to take advantage of the growing economy in a population four to five times that of an
America.
Social media has made segmented communications much easier with 1.23bn monthly users of Facebook (Sedghi, 2014),
most of which having enters details of their education, employment, relationships, favourite TV shows, movies, books, music,
geographic locations, date of birth, other social channels and life events – all of which can be used by advertisers on
Facebook to target communications to the exact right kind of person making campaigns all the more cost effective.
WRSX AND INDUSTRY SPECIFIC CAPABILITIES
WRSX is a multinational marketing and advertising agency, which has grown through acquisitions on local specialised
businesses in media buying, public relations, research & insight, direct marketing, branding, film production and sports
marketing adding to the portfolio of services available to WRSX clients. WRSX has attracted global brands with exceptional
experience in the automotive & transport, health & pharmaceuticals, telecoms, personal care, beauty & fragrances and
public sector & charities industries. WRSX offers its clients a range of services and prides itself on being a ‘one-stop-shop’
for all marketing needs offering consumer advertising, media services, public relations, film production, photography, web
design, relationship management, direct marketing, mail handling, digital media, lobbying consultancy, branding and
identity consultancy, consumer research, new media, audio and visual productions, exhibitions and conferences, outdoor
media and sports promotions.
WRSX performs below industry standards in terms of PBIT (Profit Before Interest and Tax) Margin and Return on Capital
Employed, and rates above the industry standard in areas of Staff Cost and Gearing. The share price of WRSX has been in
decline since Q4 (as per the company profile), putting the WRSX market capitalisation at approximately £285m. WRSX is
also measured by six non-financial performance indicators (NFPIs) which are compared to the industry average in areas of
management of growth, management of risk, leadership capability, corporate social responsibility, client attraction &
retention and procurement & supplier management – averaging at 42.2 over an industry standard of 50.
The most profitable division of WRSX by £28m is Advertising & Media at £76m revenue for period 0, followed by Information,
Insight & Consulting at £48m revenue for period 0. The least profitable division at present is New Media & Digital at measly
£12m revenue in the same period. North America and Western Europe are by far the highest geographical earners with
£150m revenue combines with Asia Pacific at just £20m in the same period.
STRATEGIC PURPOSE
WRSX exists to make their clients ‘successful through differentiating and strengthening their brands by creating advertising
using a range of marketing related activities’, which indicates their intentions to step into new services and locations as
seen fit and as required by the market and the client. It seems WRSX are prepared to go to many lengths to ensure their
position in the future of advertising and are actively looking to be a major player in digital/new marketing which is likely to
dominate the culture of advertising.
CULTURE AND ITS IMPACT ON WRSX STRATEGY
The advertising culture in which WRSX operates in becoming all the more competitive with marketing budgets being one of
the first to be cut in a crisis, clients are becoming more autonomous and picky about the services they require, the
organisations they associate with and the amount they are willing to spend. Large multi-national agencies pride themselves
on their design abilities, breadth of services and ability to decrease costs of external services with economies of scale
1103896
9
whereas small organisations boast specialist knowledge and existing relationships. Creative ability is fast becoming one of
the main competition bases with the increasing use of digital, design needs to be cutting edge and unique.
Traditional advertising is likely to be shot out of the water by digital and new media; increasing realisation from
organisations that the only way to compete without promoting on price is through innovation and branding; the increasing
importance to consumers and clients of corporate social responsibility and a changing remuneration process for agencies
working with brands.
Although traditional advertising still generates the highest revenue, new/digital media has a higher rate of growth and is
expected to soon overwhelm television and newspaper advertising with quicker, cost effective and unique advertising
communications through a series of different channels with more possibilities being added continuously. Many interactive
agencies specialise in advertising and marketing services for the digital space and offer a selection of services like digital
lead generation, digital brand development, interactive marketing and communications strategy, rich media campaigns,
interactive video brand experiences, Web 2.0 website design and development, e-learning tools, email marketing, search
engine optimization (SEO)/search engine marketing (SEM) services, content management services, web application
development, and overall data mining & ROI assessment. Tradigital agencies operate I both traditional and digital
advertising claiming to offer the best of both worlds, especially useful for large campaigns that require elements of both.
The need to differentiate is becoming increasingly important and clear to brands that have come to view that by competing
on price creates commodities, whereas innovation and branding allow differentiation between brands, which can allow for a
premium price tag. Organisations are concentrating on growth instead of value, particularly true from companies competing
against low-cost production.
The importance of corporate social responsibility (CSR) is becoming all the more prominent for businesses to attract
employees, shareholders and consumers. Previously government bodies used advertising to promote social behavior
changes, but businesses are now joining forces with agencies to promote their own CSR agenda to demonstrate their goodwill and positive ethics towards responsible drinking, supporting of community enterprises, organic produce etc. It is not only
the client who is increasingly required to display their values to improve their image, but also agencies need to show their
own CSR agenda in order to secure future accounts as many clients will now use this as a criteria for selection.
Along with traditional advertising, the traditional compensation model for advertising communications is about to see a
great change with many large accounts demoting the ‘billable hours spent on creating advertising’ with a value model based
on a number of agreed metrics such as the number of sales and increased market share of the organization. Many agencies
work on a combination of both, covering core costs of creating the advertising with a commission to the agency for
performance.
CONCLUSIONS
It is profoundly clear that the advertising industry is about to see a great boom with a large number of changes to its
traditional operations. There are great opportunities in expansion into quickly emerging economies within BRICS countries,
digital media will soon become the norm, clients are becoming much more picky by looking for specialised services and
changing the way in which services are procured, the consumer and client are looking for a clear contribution to the
community through CSR, there are opportunities to tap into the Muslim market which has previously been left behind, the
growth of social media and technology makes advertising that much more fun, shared, interactive and therefore memorable
– though this requires specialised creative teams and the market will become all the more competitive in terms of services,
location and design ability.
1103896
10
APPENDIX 2 – STRATEGIC CHOICES
There are a number of strategic choices available to WRSX and these should form the focus of priorities in the upcoming
board meetings in order to gain a footprint in the future of advertising & marketing and begin the steps to create a larger
global market share and potentially even beat some competitors to new locations, services and clients. These items are a
general focal point to take into consideration when choosing agenda items, but discretion is necessary on pressing matters.
EMERGING MARKETS (BRICS)
As seen from the strategic position of WRSX, there are clear opportunities for expansion into BRICS countries, especially
Latin America, China and India. The rate of economic growth in these countries demonstrates increasing consumerism in
such countries and creates more of a market for consumer goods. The population of China equates to four or five America’s,
with 150-200 million Chinese able to afford the goods and services marketed to them, though this equates to over half an
America, which shows how China is a nation with great opportunity. The advertising market in Latin America grew 42% in the
final quarter of last year with China and India increasing by 35% and 19% respectively, whilst the US remains with the
largest section growing 5% in the same period. France showed strong growth of 9% over an average of 6% for Europe.
With more of a financial ability in these ‘poor’ countries with huge populations, organisations will recognise the
opportunities in these markets and begin plans to also expand into these markets. It is important for the likes of WRSX to be
already positioned with market experience in order to nurture the launch of Western brands in Eastern countries.
WRSX has a great deal of experience in mergers and acquisitions with many subsidiaries operating with the WRSX brand
and improving the service to its’ clients, though I feel this method of market entry would not be appropriate in this instance
as a protection. There is no guarantee that the economies will continue to grow and a revolution of wealthy brand aware
consumers will be born. There is also no guarantee that Western brands will decide to expand their web to such countries.
This is why I feel an alliance with existing local organisations would be the most appropriate method of entry so to have a
short term plan to get enough knowledge and experience within the regions to determine whether it is viable to move fullforce into these countries, which services will be most needed and what resources are required.
DIGITAL AND SPECIALISED MEDIA
With the constant innovation in technology, digital media marketing will soon become the norm and overpower traditional
channels such as TV and newspaper. Due to the fast moving nature of technology, it’s vital for agencies like WRSX to have a
dedicated team for managing the requirements to compete as well as top level design teams who are able to establish
great pitch and fulfil accounts to the highest specification by exploiting the latest in technology and design.
This creates many opportunities for many organisations, but marketing agencies need to be ahead of the game and ready to
hit the ground running when more clients demand more digital advertising along with their traditional means. WRSX already
incorporates areas of new media and digital, but currently stands as the least profitable division of the group. While we are
able to offer clients a digital option, many brands are being attracted to agencies with specialist communications teams and
‘new media’ to create unconventional and memorable campaigns.
For WRSX to survive in the impending future, serious investment to digital advertising, new media and specialised
communications will be required to have sufficient clout among the growingly competitive advertising market.
1103896
11
EXPLOITATION OF SUPPLIERS VIA GROUP SYNERGY
In a growingly competitive market, its important to do business smart. It is clear that the WRSX group prides itself on being a
‘one-stop-shop’ for all marketing needs with a huge range of marketing services available to its clients. It is also clear that
some brands are opting to take their business to agencies that are much more specialised to a type of advertising.
It was reported that WRSX performs below the industry average in terms of the way it manages suppliers as well as fails to
exploit the scale of the business and share expertise across the group. It is essential for WRSX to begin utilising the
relationship with its suppliers, over-buying resources to drive down cost per unit for use across the group. It is also essential
for systems to be put in place for expertise to be shared, especially best practice for similar functions. By creating a central
department for procurement and managing suppliers, the group will be required to have a mutual point of contact which will
be a great start to creating a better synergised group and will demonstrate to new and existing clients our ability to work
together as a holistic group of businesses with the ability to offer much more.
HR POLICIES (ACCOUNT MANAGEMENT)
The Business Development Report also discusses issues with human resource allocation and retention, stating regular
restructuring of the Account Management department continues to fail in its objective to improve the standards of service to
clients and the group continues to receive negative feedback from clients. The report also discusses a struggle to hold onto
good Creative Directors and Senior Account Managers within the group. With these comments in mind, I am open to look at
conducting an audit by external consultants to make recommendations for the optimal structure of the departments as well
as review the benefits package to senior and loyal employees as well as give more autonomy in the work place for people to
feel respected, recognised and appreciated.
ENVIRONMENTAL SUSTAINABILITY (CSR)
As discussed in the strategic positioning of WRSX, the consumer environment is becoming increasingly aware of the
environmental implications of large organisations’ operations and so many clients are promoting their contribution to
environmental sustainability through their corporate social responsibility (CSR) policies. Usually governments are those who
create campaigns for social behaviour, but more and more companies have taken to telling the world that they ‘re-plant 3
trees for every 1 used for paper’, ‘source organic product’, are ‘totally free range’ or contribute to other community
enterprises. If a company is seen to be making a positive impact on the environment, consumers are more likely to favour
the brand.
This is not only important to the consumer of the brand, but also the brand as a consumer of the WRSX services who are
likely to condemn the partnership of some organisations that do not share the same values or is not seen to be making a
positive impact. Due to this, it is important that WRSX improve its image with regards to environmental sustainability and its’
CSR policy to allow for likeminded businesses to favour WRSX over other agencies which may not be doing so much (in the
public eye).
1103896
12
APPENDIX 3 – PERFORMANCE SUMMARY
BOARD MEETINGS
BOARD MEETING 1
Of the agenda items submitted, items 2 and 3; Sustainability profile of Group and Managing Generation Y – Delivery the
Doughnuts were not selected as both fall short in requiring immediate action in order to secure the future of WRSX.
Agenda Item
Decision
Market opportunities in China
The decision to request a senior member of staff from the London to chose and
manage a partnership with an existing agency in China with an established brand
and knowledge of the area was favoured over other possible outcomes due to the
risk associated with having a full force expansion into China for a minimum of 3
years costing £2m and the staffing restraints associated with sending some of our
best staff to China to create a feel for the market and opportunities from a nearby
central location.
A particularly important topic for
discussion due to the emerging nature
of China and other BIRC countries.
Non-performing business within
the Group
Closely links with item 1 being the
operations are in China, a country that
could bring about a lot of opportunity
for WRSX.
Cultural change in New York
Another high priority topic where we
need to ensure our staff and
management team feel autonomous in
their roles from within one of our
central flagship locations.
Opportunities in digital media
Another very particularly important
topic for discussion if WRSX is going to
survive the future and take note from
trends being seen already. Digital
media is something WRSX needs to
create a name for itself.
The decision to rebrand PromoCo, creating incentives for its senior managers and
employers as well as investing a small amount into new design and printing
facilities in one that can assist in the expansion to China, by running a small
operation like this and creating a reputation for the brand for later exploitation
if/when a full force expansion is seen as a worthy cause. Although the financial
returns for selling the business were attractive, we need to being creating a brand
reputation in China, which will assist in generating a feel for the needs of the
market.
The decision to undertake a review of the management structure and reduce
layers was made, as change clearly needs to happen. As this is the most cost
effective option available, I felt this would be a good starting point in which we can
start from the beginning and should the issue remain after a restructure, then
additional steps can be taken. Moving personnel from other offices might be
detrimental to their original office and the culture in New York might be different.
The decision to expand our digital media brand by investing £3m was one to see
WRSX competitive in a growingly digital advertising world. WRSX has expertise in
many areas, but the one division, which will be most in demand in the coming
years, needs to be appropriately staffed with the necessary tools.
BOARD MEETING 2
Of the agenda items submitted, items 2 and 3; Potential acquisitions of UK competitor and Sponsorship opportunity were
not selected due to the current reputation of RMJ of undertaking unwise investments proving fatal to the company and their
main stakeholder as well no current plans for WRSX to expand further within the UK in this way. Sponsorship opportunity
was not shortlisted due to the severity and relativity of other items submitted – sponsorship of such a high profile sports
individual could be a fantastic step for WRSX to expand its sports marketing division and help to smooth over current South
American sporting issues involving the WRSX brand.
1103896
13
Agenda Item
Decision
Reducing client churn
Though client retention is currently a top priority, the finances associated with a
scheme of this scale were unfeasible at this point, though the programme is a
great idea and one that can only improve the relationship we have with our clients.
The decision for the programme to be run from within existing structures within
Account Management teams was made, as these people know more about the
client and who may be ‘at risk’ and so are able to immediately steward the
relationship to begin the process.
A topic that has been repeatedly
communicated through both external
& internal reports and requires
attention to ensure our clients stay
with us.
Knowledge sharing &
communication coordination
Something that WRSX needs to
improve in order to really provide an
integrated and overarching service
where our clients can get everything in
one place, from WRSX Group.
Corporate governance issue
A time sensitive issue being WRSX has
stakes in the South America scandal at
present and we need to reiterate our
standing point and ensure this is
covered throughout the group.
Does the parent company add
value
An important question to be
considered, although whether it
currently does or does not, this is the
aim, for WRSX Group to be a holistic
integrated organisation where the
group benefits are highly admired by
our subsidiary businesses and clients.
This account is a fantastic opportunity for WRSX, which helps us to kick-start our
need for better internal communications and synergy between departments and
subsidiaries. The decision to outsource IT systems necessary for this growth was
made due to the experience required by our internal IT department as well as the
time and budget constraints to get something tangible for our presentation with
our prospective new client.
The decision to simultaneously implement the 10 Point Code of Business Conduct,
relieve the two local directors involved in the South American scandal, launch a PR
campaign to highlight these decisions and create a sub-committee to review the
corporate governance model of all WRSX Group subsidiaries was made to ensure
the renewal of sporting contracts in Europe as well as make a statement on our
position with regards to our ethos and values as an organisation, with the hope
this will make some kind of impact to reputation and public image.
The decision to strengthen the group function and consistency across the WRSX
Group was made to drive our aims of becoming an integrated marketing agency
with the ability to provide a full package of traditional, digital, new media, special
communications and PR all under one roof. This can only become reality if our
subsidiaries and internal departments are able to effectively communicate and
share resources (item 4), increasing the value added by the group and the offering
to the client.
BOARD MEETING 3
Of the agenda items submitted, items 1 and 2; Outsourcing central services and Launce CineFX in London and New York
were not selected due to the need for the organisation to improve its consolidation of services in order to ensure the
business is working as collaboratively as possible. The decision not to discuss the launching of CineFX in London and New
York was a matter of priority over alternative items to be discussed which held more importance for the strategy of the
organisation and current trends.
Agenda Item
Decision
Market opportunity in Asian
SMEs
Exploring the opportunities of SMEs in Asia gives WRSX a fantastic opportunity to
make a sign in this huge market and begin to be recognised when others realise
the potential. The Board has recognised some hasty decisions about expansion
have been made, which is why the decision to begin negotiations resulting in an
alliance with E-sme is the favourable option; allowing us to join forces with an
industry leader who will be able to teach us a lot about the requirements of the
market as well as founder the expansion to other geographic markets.
A very valid point in recognising the
opportunity arising from MSEs and
SMEs, which rightly account for a large
proportion of many economic
environments.
Competitive advantage through
backward integration into
1103896
Reprographics are a huge overhead for WRSX Group subsidiaries and having this
kind of potential, both in terms of expertise & outcomes, but also the reputation &
existing accounts of SpectraGraphix make the opportunity for an alliance with
14
Agenda Item
Decision
reprographics
such a well established, internally required organisation an attractive one, that will
help to cut costs, improve delivery and allow more tasks to be managed ‘inhouse’. By acquiring 90% of SpectraGraphix and introducing higher stakes for the
senior managers enables us to inspire the growth of SpectraGraphix as a separate
organisation working in close partnership with WRSX.
Helps us to consolidate our business
operations, cut costs and speed up
delivery to our clients.
Changing organisation structure
to meet our strategic challenges
A long overdue change that our
stakeholders are waiting to see in
order to clear the path and pave the
way for the future of WRSX.
Bringing down costs through
Group buying power
Another step to consolidating our
businesses operations, reducing costs
and speeding our service to our
clients.
A new management structure is required to set the works in motion for the
progression of WRSX. Priorities need to be realigned and a new way or working
needs to be introduced to ensure the most effective teams. The decision to
consult with 50 senior managers as opposed to engaging Barton Consulting Group
to plan the implementation or consult all staff resulting in a vote, was to cause as
little disruption to our work force during this time of change and use the most
experienced and senior employees who are likely to understand the hesitations
and constraints on the ground.
Generating and exploiting the relationship between one of our largest supplying
requirements will surely help to reduce costs, improve the speed of delivery and
better our relationship and commitment to our clients through an understood
requirement and clear outcomes which can be promised through our exclusive
contracts. The decision to move towards a central supply for high volume ensures
our largest and most profitable campaigns are fully supported and integrated to
our business. By purchasing carbon offsets, WRSX is also making a contribution to
its Corporate Social Responsibility and image.
BOARD MEETING 4
Of the agenda items submitted, items 4 and 6; Rationalisation & cost cutting and Parent company's ability to dictate groupwide corporate governance were decided against in this instance due to a matter of priority over other topics which provided
more ability to grow and improve our image and footprint.
Agenda Item
Decision
Competitor action puts pressure
on margins in our market
insights business
Reducing our margin, as discussed, is not always the best way to ensure the
renewal of client accounts due to the growing demands of external clients. This is
why the decision to not only require senior managers to agree contract revisions
and for senor managers to be involved in the renewal process but also for a
project team to be assembled to determine the cost driven businesses within the
group that add no value to our business or our client offering. The involvement of
senior management within the renewal process should hope to assist in showing
clients the value they can receive from WRSX through our many subsidiaries and
senior management involvement will also help us to better understand the needs
of the client.
Profiting from sustainability
Sustainability has been a priority throughout my time in the board and this item
finally seems to hit the nail on the head in terms of what we need and the effects
of ignorance. The decision to first look internally to the group was made so WRSX
cannot come under scrutiny for their internal policies and effects to sustainability.
Option C to work with clients to further CSR profile is a great alternative, but could
open the doors for scrutiny if we were found to be underperforming in something
we are preaching.
Strategic alliance in the Indian
advertising market
Expanding into the emerging markets of Asia has been another priority during my
time in the board to take advantage of the growing economies. Having assessed
all possible businesses for our alliance, I believe Consumer Perception /
Advertising Ltd is the best fit to our strategic future in terms of its major client
1103896
15
Agenda Item
Decision
sectors, reputation among staff; clients and competitors, its client pool, forwardthinking attitude to digital and the equity on offer.
Breakaway WRSX management /
creative group
Due to the competition drawn from creative boutiques and the combined abilities
of Philippe Jourdan and Jean-Luc Breton, the decision to create a visual media
based agency offering both parties autonomy and profit share from within the
Paris office is favourable. This decision hopes to create a happy environment for
two essential members of staff to further grow the business and services available
worldwide.
BOARD MEETING 5
Of the agenda items submitted, items 1 and 4, Creating new employment policies – Becoming employer of first choice and
West coast acquisition were not chosen to be addressed by the board not because they are not imperative topics that
require attention, but because I felt the other agenda items required a more prompt response.
Agenda Item
Decision
Major clients move towards renegotiating agency income
model
From the industry overview, it is clear that the marketing and advertising market
has long been expecting a change in the payment model with a move towards
outcome based rewards based on a set of agreed measurements, usually
including the market share of the client organisation and of the product being
promoted. Agreeing to implement this income model allows us to step into the
future, but additionally demonstrates our belief in the power of advertising and of
our own abilities as an agency.
Key strategic appointment in
underperforming subsidiary
The decision to choose candidate B over any others or the option to remain with
the current management is due to the underperformance of the current
management made clear by the internal surveys of staff and customers alike. It is
important to ensure our staff are made happy, appreciated and rewarded for their
high performance to ensure they are happy in their workplace and motivated to
provide exceptional service to our customers. This is something, which needs to
take immediate affect for recovery.
UK Government contracts –
potential account conflict
The invitation to present ideas for the government accounts is truly a great
opportunity for WRSX and its clients in so many ways. The decision to consult with
Goodey Fast Foods and discuss the intentions of WRSX would hope to reiterate
our transparency and get an idea of the position Goodey Fast Foods would be in
should we be chosen as the agency, in addition the suggestion to Goodey Fast
Foods to act in a socially responsible way and possibly extend their range of
products can only improve our relationship with our client and help to continue the
growth of their organisation. The accounts will also set WRSX for a future in
sustainability lead advertising hoping to generate more business.
Business integration – how
much autonomy should we give
to businesses we acquire
Understandably some functions within WRSX require special treatment and a
tailored integration culture and its clear that our PR functions are one such area.
The decision to make the Paris PR agency a priority and discuss with the senior
management their needs and share practise was chosen as the immediate plan of
action to first determine if this approach is viable for future acquisitions but also
to learn about the needs of PR agencies so the same or similar policies can be
rolled out to our other PR agencies. If this proves successful and the group
blueprint for integration is edited accordingly, we’d hope to see a greater deal of
autonomy and employee satisfaction and freedom to do their craft as required by
the service.
1103896
16
BOARD MEETING 6
Of the agenda items submitted, items 2 and 6, Institutional shareholder planning to sell WRSX shares and The formulation
and practice of strategy at WRSX were not taken through to the board meeting due to the importance of other items
submitted drawn from the external environment. Our shareholders and their perception are particularly important to WRSX,
but recent decisions were made to make an impact on share price and shareholder impressions, which will take time to
materialise. Additionally, a recent decision to give higher autonomy to our subsidiary businesses would hope to generate a
greater culture in which managers are able to make high decisions.
Agenda Item
Decision
Resourcing growth
Due to the sheer growth of new/digital marketing over recent years and the
impending continued growth, it makes absolute sense to put more resources into
this department to ensure we are prepared for more work in this area. The
decision to free up funds and resources from mature and declining subsidiary
businesses compliments another of the agenda items to be addressed which will
hope to release more resources and funds which can be realigned to growing
businesses and fuel our expansion into new markets.
New media has been one of the main
priorities of the board since joining and
the growth of this service needs to be
competitive in the macro environment
and having the people and the
facilities to do this is an important
factor.
Islamic marketing and the
Muslim consumers
As part of the expansion into Asian
countries and the growing population
of Muslims, Islamic marketing is
something that will need to be
explored in order to expand our
services appropriately and potentially
be one of the first global brands with
this kind of specific marketing.
Opportunity for strategic review
and to raise capital
The external environment shows us
that may companies are looking to join
forces with others for multiple reasons,
and this item gives us the opportunity
to realign our finances and potentially
release funds that can be used for
nurturing relationships with companies
able to help us grow.
Making WRSX the agency of
choice for Asian brands
expanding globally
Expansion into Asian markets has
been another priority since joining the
board. This will give us an opportunity
to show our abilities to the increasing
number of Asian brands looking to
expand globally and take advantage of
WRSX’s services.
1103896
With the growing Muslim population and increasing number of brands looking to
expand into Asian countries with a majority Muslim population, it is essential that
WRSX be prepared to deliver in these countries as one of the first Muslim Market
Specialists. The decision for Aziz to recruit a sub-team within the Paris office to
work alongside existing creative teams was made so Aziz can closely monitor the
progress of this project without needing to invest in new geographic locations.
Releasing resources to new and growing businesses within the WRSX group is
more important than ever now with expansion into new geographic markets and
new creative media which will become all the more popular in the coming years.
The decision to sell FastTrak Mailings is based primarily on the funding available
from the sale and the nature of the business being an old marketing method
which we could survive without by out-sourcing any future direct mail marketing
accounts.
Expansion into Asia has been a priority of the board over the term and this agenda
item gives us the opportunity to really make a mark in the market and have our
name heard. The decision to partner with the existing HAL agency to learn better
about HAL and the Asian market was made as we are not guaranteed the account
and this allows us a fall-back with experience in the market to increase our
‘agency of choice’ status.
17
SHARE PRICE
£8.00
£6.00
£4.00
£2.00
£0.00
Start
Board
Board
Board
Board
Board
Board
Position
Meeting 1
Meeting 2
Meeting 3
Meeting 4
Meeting 5
Meeting 6
£2.28
£2.62
£3.39
£3.16
£4.03
£5.41
£7.26
218%
€2.74
€3.15
€4.07
€3.79
€4.83
€6.49
€8.71
21%
+/-
Note: £ / Euro exchange rate is fixed at £1 = €1.2
1103896
18
FINANCIAL PERFORMANCE
Start Position
Board Meeting 6
Period 0
Period 6
+/-
£m
€m
£m
€m
%
200.0
240.0
341.6
409.9
71%
-10.0
-12.0
-27.0
-32.4
170%
190.0
228.0
314.6
377.5
66%
-126.0
-151.2
-194.5
-233.4
54%
Establishment Costs
-16.0
-19.2
-24.3
-29.2
52%
Other Operating Costs
-15.0
-18.0
-29.6
-35.5
97%
-157.0
-188.4
-248.4
-298.1
58%
33.0
39.6
66.2
79.4
101%
5.0
6.0
8.2
9.8
64%
Finance Costs
-10.0
-12.0
-10.0
-12.0
0%
Total Finance Costs
-5.0
-6.0
-1.8
-2.2
-64%
28.0
33.6
64.5
77.4
130%
-9.0
-10.8
-20.6
-24.7
129%
19.0
22.8
43.8
52.6
131%
Revenue
Direct Costs
Gross Profit
Operating Costs
Staff Costs
Total Operating Costs
Profit Before Interest and Taxation
Finance Income
Profit Before Taxation
Taxation
Profit for Period
1103896
19
KEY RATIOS
80.00%
60.00%
40.00%
20.00%
0.00%
PBIT (%)
PBIT (%)
Staff Cost Ratio
(%)
1103896
Staff Cost Ratio (%)
Start
Board
Board
Board
Board
Board
Board
Position
Meeting 1
Meeting 2
Meeting 3
Meeting 4
Meeting 5
Meeting 6
16.5%
16.7%
17.1%
15.3%
15.7%
17.4%
19.4%
2.9%
63.0%
62.7%
61.0%
63.1%
60.4%
59.5%
56.9%
-6.1%
+/-
20
NON-FINANCIAL PERFORMANCE INDICATORS
80
70
60
50
40
30
Management of Growth
Management of Risk
Leadership Capability
Corporate Social Responsibility
Client Attraction & Retention
Procurement & Supplier Mgt
60
50
40
WRSX
Start
Position
Industry Average
Board
Board
Board
Board
Board
Board
Meeting
Meeting
Meeting
Meeting
Meeting
Meeting
1
2
3
4
5
6
+/-
1. Management of Growth
43.5
48.0
52.8
51.8
54.3
61.3
66.3
52%
2. Management of Risk
41.3
38.3
41.3
40.0
43.3
50.3
48.0
16%
3. Leadership Capability
39.2
41.0
46.6
48.0
48.8
56.4
57.0
45%
4. Corporate Social Responsibility
38.5
36.5
39.5
40.0
40.0
43.0
43.0
12%
5. Client Attraction & Retention
52.0
55.6
60.0
60.6
64.6
71.8
78.0
50%
6. Procurement & Supplier Mgt
38.7
39.7
44.3
47.0
49.0
52.3
57.3
48%
Index Average
42.2
43.2
47.4
47.9
50.0
55.9
58.3
38%
1103896
21
PRICE / EARNINGS RATIO
25.0%
20.0%
15.0%
10.0%
P/E Ratio (%)
1103896
Start
Board
Board
Board
Board
Board
Board
Position
Meeting 1
Meeting 2
Meeting 3
Meeting 4
Meeting 5
Meeting 6
15.0%
15.3%
16.9%
17.0%
17.8%
19.9%
20.7%
+/-
5.7%
22