Strategic management paper for Fusion advertising marketing hub

• Main Author: Taguinod, Jose Mateo
• Format: text
• Language: English
• Published: Animo Repository 2005
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4541
• Institution: De La Salle University

Advertising may be defined as a form of communication through which entities (e.g. business firms, governments or individuals) aim to draw a specific response from their target audience. Aside from persuading consumers to acquire a certain product or service, advertising may also seek to advance a particular cause. The Philippine Advertising Industry is viewed to be attractive due to high activities related to competition, high threats from new competitors and high competitive pressures stemming from buyer bargaining power. For existing advertising agencies in the industry, a lot of challenges await these companies such as developing strategic action plans in order to survive the cutthroat competition and the threat of potential new competitors in the industry. However, if advertising agencies would be able to convert these challenges to their advantage, potential increase in profit margins may be achieved. For the potential new entrants, the industry presents a lot of opportunities to venture into the advertising business, as it requires less capital investments. Instead, creativity, skills, and valuable industry experience from its human resources are the main prerequisites in venturing in this business. However, competition with existing agencies is expected to be fierce, as these industry players would do everything to protect and increase their current market shares. FUSION Advertising Marketing Hub is a company established by three young entrepreneurs that envision the firm to be a provider of a wide mix of marketing services focused on the clients' below-the-line advertising requirements. FUSION Advertising and Marketing Hub serves as clients' one-stop marketing department that delivers what they need and what they want on time. The companys roster of human resource is composed of marketing professionals who clearly understand the current marketing environment, is capable to delivering quality professional services on the areas of in-depth planning, systematic implementation and accurate analysis assuring that all client activities and projects meet specific objectives and generate favorable results. The company is currently adopting the Low Cost Provider Strategy. With this strategy, the company is able to have a competitive approach in the advertising industry that is characterized with many price-sensitive buyers. Since advertisers may place a high competitive pressure in advertising agencies stemming from its strong buyer bargaining power, offering service fees lower that that of rival firms increases the competitive advantage and market share of FUSION. FUSION Advertising Marketing Hub is currently challenged on how to sustain profitability of the business as it is faced with cutthroat competition in below-the-line advertising industry. Aside from the high rivalry in the industry, the company also needs to address on what strategic move it needs in order to increase its market share especially with the current directions of multinational advertisers toward global alignment. To address these strategic issues, it is highly proposed that the company transitions to adopting a Focused Strategy Based on Lower Cost. The competition in the Advertising industry is described to be cutthroat with low barriers to potential new entrants. A number of advertising agencies may be offering the same services as that with FUSION. By adopting the focused strategy based on lower cost, the company now concentrates in marketing services or products that they hold expertise and competitive advantage of. In this way, specialization is being developed. But while the company is now creating a market niche, it still is able to maintain its competitiveness by pricing its products and services at lower rates compared to other advertising agencies offering the same product or service. To convert these strategies more concretely to be executed, an implementation plan through the use of the 7-S Framework is also provided in this paper. Lastly, a five-year financial projection is provided taking into consideration the strategic directions of FUSION Advertising Marketing Hub.