SB4001 Part 2 Assessment Template

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Global Business Strategy Development and Execution, SB4001

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Analytical Tools in Business Strategy

Strategies to Create and Sustain Competitive Advantage

1. Open innovation. One such innovation that Victors & Spoils adopted was crowdsourcing.

The agency was one of the first adopters of crowdsourcing. It employed it to create

greater ideas and eventually better innovative outputs for its pool of clients. Victors &

Spoils employed this innovation because it maintained that the traditional model was not

the way forward and was broken. The agency wanted to change the advertising industry

through innovation in the manner in which things were done. It wanted to employ

innovation to move away from the normal way of doing things. Innovation through

crowdsourcing provided clear benefits to both Victors & Spoils and its list of clientele.

This strategy was effective because it affected different industries, including online

creation, software development, fashion and graphic arts. Most clients also were more

willing to work with advertising agencies established on the principles of crowdsourcing.

This showed that the idea of crowdsourcing was getting more attention in the industry.

2. Agency Machine. The online platform took part in being an important element in

managing the agency’s entire workflow. This platform enabled Victors &Spoils to issue

the crowd with the client's briefs, gather the teams for the project, keep tabs on the

generated ideas from the crowd, and avail important feedbacks along the way. Agency

Machine also stored crucial crowd data, and this data included an individual ranking in

the community. This strategy was effective since the agency's estimated annual revenue

as of 2013 was at $6M, and the cash flow for the firm was positive. This can be attributed

to the above benefits of the strategy.

a) Cost-benefit analysis tool. This is a tool that is effective in any decision-making as it

considers the resources, preferences, and informational barriers for the manager to be

able to make more informed decisions using this information (Pamela & Misuraca, 2014).

Using this tool, Victors & Spoils can weigh the costs and benefits to the agency on

whether to partner or remain independent as an agency. Since the primary goal of any

agency is to make a profit, the agency will go with the decision that has more benefits

based on the net profits generated as a result of the decision made.

b) SWOT Analysis. This tool helps in decision making by identifying forces behind an

action, initiative or strategy (Osita et al., 2014). SWOT can help guide Victors & Spoils

in making the right decision to assist the agency in its long term strategy and direction.

Through this tool, the agency will identify the internal strengths as well as weaknesses

that will result from the partnership with the other company. Furthermore, through this

tool, the agency will figure out the external opportunities and threats resulting from the

agency's decision between partnering or remaining independent. The agency can assess

its situation and plan for the future accordingly.

The agency problem on whether to partner with HAVAS can be solved using cost-benefit

and SWOT analysis tools. The cost-benefit analysis will help the organization weigh on

its decision based on the resulting benefits and costs. It will decide to go with the most

beneficial decision. SWOT analysis will be useful in determining the internal strengths

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 and weaknesses as well as external opportunities and threats of the decision to partner

with HAVAS.

Performing an Environmental Analysis Before Creating a Strategy

A PEST analysis or environmental analysis classifies the forces and the changes that influence

any startup directly or indirectly by suppliers, competitors or customers. PEST is a short form for

Political, Economic, social, and technological forces in the market.

1) Political developments. Victors & Spoils needs to be aware of important regulatory

developments and how they influence its customer base and market.

2) Economic changes. These are changes that can impact the agency and its market.

Decreased ad spending results in companies reducing their media expenditure which

negatively affects agencies like Victors & Spoils.

3) Social/Cultural changes. This is due to changes in the demographic profile, including any

trends in the culture that might impact the agency in both the short as well as long-term

(Nandonde & Adamu, 2019). Environmentally-conscious customers prefer newspapers

as compared to print media. Hence advertising some products or services using print

media might not reach the intended audience.

4) Technological trends. These are changes in technology that can affect the agency and its

market. The agency needs to be aware of the technological changes in its target market

area in order to be able to remain competitive and be attractive to its clientele. Most

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 agencies are moving away from traditional media and adopting digital media in order to

stay ahead of the competition.

The Benefits of a SWOT Analysis

Victors and Spoils could benefit in a number of ways by performing SWOT analysis:

a) Cost-effective. To perform this analysis, the agency does not need to hire a professional

or train someone. This is because SWOT analysis does not require any technical skill,

and the agency can use one of its staff with prior knowledge on the same hence saving on

cost.

b) Wide range of uses. This tool can be used by the agency to perform strategic planning

and competitive analysis. For example, Victors & Spoils is able to identify media scape

changing in its environment where agencies are switching to digital media from the

traditional media.

c) Provides visual overview. SWOT analysis is usually displayed as a square, with each part

within the square representing a particular factor (Birkenmaier et al., 2017). This visual

display will provide Victors & Spoils with a quick outline of the agency's position in

terms of strengths, weaknesses, opportunities, and threats. This quick outline will assist

the agency in figuring out its progress and success, maximizing its strengths and reducing

its weaknesses.

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Using SWOTT over SWOT enables the agency to know and understand the current

trends in the industry (Bell & Rochford, 2016). The agency will notice trends such as

viral marketing earlier enough to leverage on them before competitors do.

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Using SWOT Analysis to Develop Strategic Approaches

SWOT Analysis

The following table is a SWOT analysis for Victors & Spoils to help with John Winsor’s and Jon

Black’s concerns about how to grow the business.

Strengths (S) Weaknesses (W)

 Open innovation and  Inadequate capital. The agency

crowdsourcing principles. The did not have enough capital to

agency is one of the first of its invest in the trend. Despite the

kind to be based on these agency being the first one to

principles. notice the trend and establish the

 Agency Machine. This is a trend, it lacked enough capital to

platform that was crucial in exploit the opportunity

managing the agency’s entire

workflow.

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 Opportunities (O) Threats (T)

 New investors. Through this, the  Intense competition. Other players

agency would be in a position to in the industry compete with

expand and double its chances of Victors & Spoils for the client

making a real change in its base. Some of these other agencies

environment. New partners can are well-funded and hence able to

also avail capital for the agency to take advantage of emerging

use on new trends. trends.

Recommendations for Strategic Approaches Based on SWOT Analysis

1) Incorporating traditional and digital media. Creative directors and the information

technology department for Victors & Spoils will need to employ both of these strategies

to enable the agency meet the needs of clients who prefer the traditional media and digital

media, including those who prefer a blend of both. New trends like viral marketing are

borne out of the traditional media hence the need for both.

2) Partners and noteworthy clientele. Through the president and the finance department, the

agency needs to seek partners who will support the agency financially to take advantage

of the emerging trends and stay ahead of the competition. Partners bring capital that can

be used to finance innovation within the agency.

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A blue ocean strategy that the agency can pursue is to align the entire system of the

agency's interest in the pursuit of low cost and differentiation. The agency needs to

reduce its operating costs and cut off unnecessary expenditures. The agency also needs to

ensure that its service provider is unique and stands out from the competitors through

differentiation.

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 References

Bell, Geoffrey G.; Rochford, Linda (November 2016). "Rediscovering SWOT's integrative

nature: a new understanding of an old framework". The International Journal of

Management Education. 14 (3): 310–326. doi:10.1016/j.ijme.2016.06.003.

Birkenmaier, Julie; Berg-Weger, Marla (2017). "Organizational engagement, assessment, and

planning". The practise of generalist social work (4th ed.). New York: Routledge. pp.

552–577. ISBN 9781138057852. OCLC 971892636.

Nandonde, Felix Adamu (9 April 2019). "A PESTLE analysis of international retailing in the

East African Community". Global Business and Organizational Excellence. 38 (4): 54–

61. doi:10.1002/JOE.21935. ISSN 1932-2054.

Pamela, Misuraca (2014). "The Effectiveness of a Costs and Benefits Analysis in Making

Federal Government Decisions: A Literature Review" (PDF). The MITRE Corporation.

Osita, Christian; Onyebuchi, Idoko; Justina, Nzekwe (31 January 2014). "Organization's stability

and productivity: the role of SWOT analysis" (PDF). International Journal of Innovative

and Applied Research. 2 (9): 23–32.

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