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 - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
Diverse revenue streams
– Publicis Groupe is present in almost all the verticals within the industry. This has provided firm in Publicis Groupe 2009: Toward a Digital Transformation 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.
Training and development
– Publicis Groupe has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Publicis Groupe 2009: Toward a Digital Transformation 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.
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.
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.
High brand equity
– Publicis Groupe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Publicis Groupe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Publicis Groupe is one of the most innovative firm in sector. Manager in Publicis Groupe 2009: Toward a Digital Transformation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Publicis Groupe in the sector have low bargaining power. Publicis Groupe 2009: Toward a Digital Transformation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Publicis Groupe to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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 -
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.
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.
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.
High cash cycle compare to competitors
Publicis Groupe 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.
Slow to strategic competitive environment developments
– As Publicis Groupe 2009: Toward a Digital Transformation HBR case study mentions - Publicis Groupe 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.
Low market penetration in new markets
– Outside its home market of Publicis Groupe, firm in the HBR case study Publicis Groupe 2009: Toward a Digital Transformation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Publicis Groupe 2009: Toward a Digital Transformation, it seems that the employees of Publicis Groupe 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Publicis Groupe 2009: Toward a Digital Transformation, in the dynamic environment Publicis Groupe has struggled to respond to the nimble upstart competition. Publicis Groupe has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Publicis Groupe 2009: Toward a Digital Transformation, is just above the industry average. Publicis Groupe 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 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.
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 -
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.
Building a culture of innovation
– managers at Publicis Groupe 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 Leadership & Managing People segment.
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.
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.
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.
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.
Loyalty marketing
– Publicis Groupe 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.
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 Publicis Groupe in the consumer business. Now Publicis Groupe can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Publicis Groupe to increase its market reach. Publicis Groupe 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.
Developing new processes and practices
– Publicis Groupe can develop new processes and procedures in Leadership & Managing People 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Publicis Groupe can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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.
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 .
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.
Increasing wage structure of Publicis Groupe
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Publicis Groupe.
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.
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.
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.
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 .
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.
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.
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.
Environmental challenges
– Publicis Groupe 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. Publicis Groupe can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
