Publicis Groupe 2009: Toward a Digital Transformation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Publicis Groupe 2009: Toward a Digital Transformation
For best results, this case should be printed in color.After a series of acquisitions, Maurice Levy, the Chairman and CEO of Publicis Groupe, had created the fourth largest marketing and communications company in the world. His next major challenge was managing the firm's digital transformation. In December 2006, the company acquired Boston-based Digitas, a leading digital agency headed by David Kenny. After the initial merger, which included the unbundling of Digitas capabilities and the global expansion of its agency network, Publicis Groupe launched VivaKi, a new company-wide digital platform, to spearhead the firm's total transformation. But since the June 2008 launch, the global economy had taken a turn for the worse. Could Levy, Kenny, and other leaders change the holding company quickly and effectively enough to make the new model work?
Swot Analysis of "Publicis Groupe 2009: Toward a Digital Transformation" written by Rosabeth Moss Kanter, Matthew Bird includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Publicis Groupe facing as an external strategic factors. Some of the topics covered in Publicis Groupe 2009: Toward a Digital Transformation case study are - Strategic Management Strategies, Growth strategy, Innovation, International business, IT, Marketing, Mergers & acquisitions, Recession and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Publicis Groupe 2009: Toward a Digital Transformation casestudy better are - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Publicis Groupe 2009: Toward a Digital Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Publicis Groupe 2009: Toward a Digital Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Publicis Groupe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Publicis Groupe 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 Publicis Groupe 2009: Toward a Digital Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Publicis Groupe 2009: Toward a Digital Transformation case study
2. Improving business portfolio management of Publicis Groupe
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Publicis Groupe
Strengths Publicis Groupe 2009: Toward a Digital Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Publicis Groupe in Publicis Groupe 2009: Toward a Digital Transformation Harvard Business Review case study are -
High switching costs
– The high switching costs that Publicis Groupe 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 lead change in Leadership & Managing People field
– Publicis Groupe 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 Publicis Groupe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Publicis Groupe 2009: Toward a Digital Transformation 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.
Highly skilled collaborators
– Publicis Groupe 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 Publicis Groupe 2009: Toward a Digital Transformation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Publicis Groupe 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 Publicis Groupe 2009: Toward a Digital Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Publicis Groupe is one of the leading recruiters in the industry. Managers in the Publicis Groupe 2009: Toward a Digital Transformation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Publicis Groupe 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.
Organizational Resilience of Publicis Groupe
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Publicis Groupe does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Publicis Groupe in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Publicis Groupe 2009: Toward a Digital Transformation firm has clearly differentiated products in the market place. This has enabled Publicis Groupe to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Publicis Groupe to invest into research and development (R&D) and innovation.
Strong track record of project management
– Publicis Groupe is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Publicis Groupe digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Publicis Groupe has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Publicis Groupe 2009: Toward a Digital Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Publicis Groupe 2009: Toward a Digital Transformation are -
Interest costs
– Compare to the competition, Publicis Groupe 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.
Lack of clear differentiation of Publicis Groupe products
– To increase the profitability and margins on the products, Publicis Groupe needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Publicis Groupe 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 bargaining power of channel partners
– Because of the regulatory requirements, Rosabeth Moss Kanter, Matthew Bird suggests that, Publicis Groupe 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.
Capital Spending Reduction
– Even during the low interest decade, Publicis Groupe 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.
Slow decision making process
– As mentioned earlier in the report, Publicis Groupe 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. Publicis Groupe 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.
Increasing silos among functional specialists
– The organizational structure of Publicis Groupe is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Publicis Groupe needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Publicis Groupe to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Publicis Groupe 2009: Toward a Digital Transformation, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Publicis Groupe 2009: Toward a Digital Transformation that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Publicis Groupe 2009: Toward a Digital Transformation can leverage the sales team experience to cultivate customer relationships as Publicis Groupe is planning to shift buying processes online.
Opportunities Publicis Groupe 2009: Toward a Digital Transformation | 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 Publicis Groupe 2009: Toward a Digital Transformation are -
Learning at scale
– Online learning technologies has now opened space for Publicis Groupe 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.
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 Publicis Groupe 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Publicis Groupe can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Publicis Groupe can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Publicis Groupe can use these opportunities to build new business models that can help the communities that Publicis Groupe operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Publicis Groupe to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Publicis Groupe to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Publicis Groupe 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Publicis Groupe in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Publicis Groupe is facing challenges because of the dominance of functional experts in the organization. Publicis Groupe 2009: Toward a Digital Transformation 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.
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. Publicis Groupe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Publicis Groupe 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.
Using analytics as competitive advantage
– Publicis Groupe 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 Publicis Groupe 2009: Toward a Digital Transformation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Publicis Groupe to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Publicis Groupe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Publicis Groupe has opened avenues for new revenue streams for the organization in the industry. This can help Publicis Groupe to build a more holistic ecosystem as suggested in the Publicis Groupe 2009: Toward a Digital Transformation case study. Publicis Groupe can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Publicis Groupe 2009: Toward a Digital Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Publicis Groupe 2009: Toward a Digital Transformation are -
Stagnating economy with rate increase
– Publicis Groupe 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Publicis Groupe in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Publicis Groupe in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Publicis Groupe 2009: Toward a Digital Transformation, Publicis Groupe may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Publicis Groupe 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 Publicis Groupe 2009: Toward a Digital Transformation .
Shortening product life cycle
– it is one of the major threat that Publicis Groupe is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Publicis Groupe 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 Leadership & Managing People industry regulations.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Publicis Groupe can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Publicis Groupe 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.
Technology acceleration in Forth Industrial Revolution
– Publicis Groupe has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Publicis Groupe needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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. Publicis Groupe 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 Publicis Groupe.
Weighted SWOT Analysis of Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe 2009: Toward a Digital Transformation 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 Publicis Groupe needs to make to build a sustainable competitive advantage.