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 - – supply chains are disrupted by pandemic , there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing commodity prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, technology disruption, 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 -
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.
Ability to recruit top talent
– Fcb Publicis is one of the leading recruiters in the industry. Managers in the FCB and Publicis (C): The German-Led Network are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Successful track record of launching new products
– Fcb Publicis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fcb Publicis has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
Organizational Resilience of Fcb Publicis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fcb Publicis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Fcb Publicis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in FCB and Publicis (C): The German-Led Network Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
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.
Effective Research and Development (R&D)
– Fcb Publicis has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study FCB and Publicis (C): The German-Led Network - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
Skills based hiring
– The stress on hiring functional specialists at Fcb Publicis has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
Interest costs
– Compare to the competition, Fcb Publicis has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Fcb Publicis is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fcb Publicis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fcb Publicis to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Fcb Publicis needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Capital Spending Reduction
– Even during the low interest decade, Fcb Publicis has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
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.
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 -
Leveraging digital technologies
– Fcb Publicis can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fcb Publicis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fcb Publicis can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, FCB and Publicis (C): The German-Led Network, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fcb Publicis is facing challenges because of the dominance of functional experts in the organization. FCB and Publicis (C): The German-Led Network case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
Manufacturing automation
– Fcb Publicis can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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.
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.
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.
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 -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fcb Publicis in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
High dependence on third party suppliers
– Fcb Publicis high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fcb Publicis will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fcb Publicis.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fcb Publicis business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 .
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.
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.