FCB and Publicis (C): The German-Led Network SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FCB and Publicis (C): The German-Led Network
After U.S.-based Foote, Cone & Belding (FCB) and Publicis of France established an international advertising alliance in May 1988, alliance leaders set out to merge offices in Europe. They were confronted with a particularly tricky situation in Germany, which, if handled poorly, could have harmed BMZ, a highly regarded agency in Dusseldorf that FCB had acquired six months earlier. The case looks at how alliance managers resolved the dilemma by forming a second agency network in Europe; how that network, which was composed of advertising agencies from six European countries, was working; and how agencies from different cultural backgrounds were dealing with diversity. May be used with FCB and Publicis (A): Forming the Alliance and (B): Managing Client and Country Diversity.
Swot Analysis of "FCB and Publicis (C): The German-Led Network" written by Rosabeth Moss Kanter, Pamela Yatsko includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fcb Publicis facing as an external strategic factors. Some of the topics covered in FCB and Publicis (C): The German-Led Network case study are - Strategic Management Strategies, Diversity, Joint ventures, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the FCB and Publicis (C): The German-Led Network casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, wage bills are increasing, supply chains are disrupted by pandemic ,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of FCB and Publicis (C): The German-Led Network
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FCB and Publicis (C): The German-Led Network case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fcb Publicis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fcb Publicis operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of FCB and Publicis (C): The German-Led Network can be done for the following purposes –
1. Strategic planning using facts provided in FCB and Publicis (C): The German-Led Network case study
2. Improving business portfolio management of Fcb Publicis
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fcb Publicis
Strengths FCB and Publicis (C): The German-Led Network | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fcb Publicis in FCB and Publicis (C): The German-Led Network Harvard Business Review case study are -
Innovation driven organization
– Fcb Publicis is one of the most innovative firm in sector. Manager in FCB and Publicis (C): The German-Led Network Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– FCB and Publicis (C): The German-Led Network firm has clearly differentiated products in the market place. This has enabled Fcb Publicis to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Fcb Publicis to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the FCB and Publicis (C): The German-Led Network Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Fcb Publicis has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Fcb Publicis is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rosabeth Moss Kanter, Pamela Yatsko can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Fcb Publicis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Fcb Publicis are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Strategy & Execution field
– Fcb Publicis is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fcb Publicis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Fcb Publicis is present in almost all the verticals within the industry. This has provided firm in FCB and Publicis (C): The German-Led Network case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Fcb Publicis is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Fcb Publicis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FCB and Publicis (C): The German-Led Network Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Fcb Publicis has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in FCB and Publicis (C): The German-Led Network HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Fcb Publicis in the sector have low bargaining power. FCB and Publicis (C): The German-Led Network has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fcb Publicis to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses FCB and Publicis (C): The German-Led Network | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FCB and Publicis (C): The German-Led Network are -
Need for greater diversity
– Fcb Publicis has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the FCB and Publicis (C): The German-Led Network HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fcb Publicis has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study FCB and Publicis (C): The German-Led Network, it seems that the employees of Fcb Publicis don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fcb Publicis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FCB and Publicis (C): The German-Led Network can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Fcb Publicis has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Fcb Publicis products
– To increase the profitability and margins on the products, Fcb Publicis needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study FCB and Publicis (C): The German-Led Network, is just above the industry average. Fcb Publicis needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study FCB and Publicis (C): The German-Led Network has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fcb Publicis 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Fcb Publicis has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Fcb Publicis even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As FCB and Publicis (C): The German-Led Network HBR case study mentions - Fcb Publicis takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Rosabeth Moss Kanter, Pamela Yatsko suggests that, Fcb Publicis is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities FCB and Publicis (C): The German-Led Network | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study FCB and Publicis (C): The German-Led Network are -
Using analytics as competitive advantage
– Fcb Publicis has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study FCB and Publicis (C): The German-Led Network - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fcb Publicis to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Fcb Publicis to increase its market reach. Fcb Publicis will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fcb Publicis can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Fcb Publicis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fcb Publicis can use these opportunities to build new business models that can help the communities that Fcb Publicis operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Fcb Publicis to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Fcb Publicis can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fcb Publicis in the consumer business. Now Fcb Publicis can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Fcb Publicis has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fcb Publicis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Fcb Publicis can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fcb Publicis to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Fcb Publicis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FCB and Publicis (C): The German-Led Network suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats FCB and Publicis (C): The German-Led Network External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FCB and Publicis (C): The German-Led Network are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study FCB and Publicis (C): The German-Led Network, Fcb Publicis may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Fcb Publicis demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fcb Publicis can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study FCB and Publicis (C): The German-Led Network .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Fcb Publicis needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Fcb Publicis needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fcb Publicis can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Fcb Publicis needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Fcb Publicis can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Fcb Publicis is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Fcb Publicis in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fcb Publicis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Fcb Publicis has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fcb Publicis needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fcb Publicis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of FCB and Publicis (C): The German-Led Network Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study FCB and Publicis (C): The German-Led Network needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study FCB and Publicis (C): The German-Led Network is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study FCB and Publicis (C): The German-Led Network is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of FCB and Publicis (C): The German-Led Network is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Fcb Publicis needs to make to build a sustainable competitive advantage.