You are on page 1of 23

MARKETING SID# 0971446/1

Serco is a multinational organization with a diversified portfolio. They provide management
services in the areas of Civil Government, Defense, Transport and Science within the UK and
abroad. Serco combines commercial know-how with deep public service ethos to deliver the
highest standard of services to its customers at the lowest cost. The company’s overall strategy
is to build a balanced portfolio, maintain high rebid and new win rates make strategic
acquisitions and develop new business models. This reduces the exposure to market
fluctuations, enabling selection of the best opportunities in whichever market they are in and
allows the transfer of expertise from one market to another. For the purpose of this paper the
area of Civil Government will be explored analyzing the current status of this business, its
competitors and future opportunities in order to develop a strategic marketing plan to ensure the
company expands its market share in this area both locally and internationally.

Serco’s vision is to be the leading service company in their chosen markets.
Serco’s mission is to accomplish its vision by focusing on the following:
• Analyse a customer’s problems and produce a tailored solution which has the improved
management of people and service at its heart.
• To redesign organisations to remove bureaucracy, enhance processes and liberate
people to deliver their best
• Instill values which are defined by Serco’s Governing Principles ( foster an
entrepreneurial culture, enable people to excel, deliver our promises and build trust and
respect) and are aligned with our ethos of delivering high-quality services


Serco’s corporate objectives are as follows:
• To strengthen its position in existing markets by expanding the scope and scale of their
current contracts and winning a significant number of new contracts
• Broaden its portfolio by entering a number of new markets where we see strong
opportunities for growth.


MARKETING SID# 0971446/1





Serco’s has shown consistent growth over the last five years. 2009 financial year was
exceptional with revenues, adjusted operating profit and earnings per share increasing by
27.1%, 39% and 30.6% respectively. 90% of Serco’s business comes from government
contracts both locally and internationally which allows high visibility of planned revenue of 91%
for 2010, 76% for 2011 and 64% for 2012. The financial crisis of 2008 has benefited Serco
tremendously in 2009. This is due to the unrelenting pressures on governments to reduce


MARKETING SID# 0971446/1 spending and Serco’s proven ability to manage government institutions cost effectively whilst delivering superior service resulting in the attainment of high revenue governmental contracts. Its competitors are significant in size and composed of a diverse portfolio in the service industry.2 MARKET SHARE FIGURE 2 7% 1% 11% SERCO CARILLION CAPITA OTHER 81% Serco dominates the UK market in the civil government sector. however they are not fully aligned to the civil government sector. 3 . Market trends indicate Carillion and Capita are implementing strategies to expand in this sector thereby eventually becoming significant competitors to Serco. 4.

Structure The organizational structure is robust and is highly adaptive to meet the specific requirements of the client and its customers and to manage associated risk within the sector. Systems Formal and informal procedures are available that support both strategy and structure to effectively manage the dynamics of the service sector. Several training programs have been implemented to provide employees with the appropriate tools to effectively perform their duties.MARKETING SID# 0971446/1 4. deliver the promises and build trust and respect. 4 . Style The organizational culture promotes its core values and beliefs of bringing service to life. Skills A strong skill base exists that is also transferable to aid in areas where skills are deficient. Shared Values The company has very strong shared values and forms part of its governing principles which includes fostering an entrepreneurial culture.3 MARKET OVERVIEW 4.. it allows for tactical and rapid responses for change in the external environment.………………………………………………………………………………….31 INTERNAL ANALYSIS: MCKENZIE 7S FRAMEWORK Strategy The business strategy is very sound. enabling people to excel.

environmental services.MARKETING SID# 0971446/1 Staff Human resource and health and safety management systems are implemented to ensure proper training and development. which include.32 INTERNAL ANALYSIS: 7P’ S OF MARKETING Product/service Serco analyses a customer’s problems and produces a tailored solution of high quality services in the civil government sector which is aligned to customer needs. integration and career planning of new and existing staff are effectively managed. Promotion Serco does not have a marketing strategy to promote its services as it adopts a business strategy to win government contracts. border protection. The cost to the government and by extension the taxpayers is competitive based on the number of contracts won in this sector. management consultancy. Price Serco’s service is on behalf of the civil government sector therefore it is at no direct cost to the customer. These contracts provide profit that supports Serco’s sustainable growth. health management and hospital support. These services are differentiated. the survey also confirmed that the people are motivated to go beyond what is required of them. prisons management. education and children’s services. The employees have expressed satisfaction via the View Point survey. facilitating a student placement program and investing 1% of profits to community programs. IT and IT- enabled services. They also promote environmental 5 . welfare to work. People Serco’s provides training to its employees to effectively provide quality service consistently. and do what is needed to get the job done. They however promote their corporate responsibility in communities they operate by employing community members. 4. The taxes that customers pay are used to manage these government services.

Their process is also geared to educate the customer of their services and what they should expect from Serco. Process Serco’s processes are of high ethical standards and enshrine the company’s core beliefs. Publics 6 . and a Sword of Honour from the British Safety Council. Place Serco place of service is the existing infrastructure in communities already established by the government civil sector. enhance and liberate people to deliver their best. The awards were given for excellence in safety and customer service. Contracts are formed with suppliers to guarantee regular supply at stable prices and consistent quality.4 MARKET SITUATION External analysis: Forces in Micro and Macro environment 4. These processes are governed by their management systems which seek to minimize bureaucracy. Physical evidence Serco’s “Viewpoint” survey for 2009 identified the world-class levels of commitment and its open and respectful culture. They received 29 awards from the Royal Society for the Prevention of Accidents.41 Micro Environment Supplier Serco’s utilizes the benefits of competitive supplier selection to optimise the efficiency and effectiveness of the processes and resources to drive sustainability throughout the supply chain and to develop positive relationships (thereby reducing bargaining strength of supplier) with their key suppliers to make the most of their economies of scale. 4.MARKETING SID# 0971446/1 awareness and seek to reduce year on year carbon emissions and is currently leading by example.

The market size is considerable based on the fact that civil government is Serco’s highest revenue earner (£1. The competition is service oriented companies with strengths in other areas not significantly in direct conflict. because of this the entire demographic spectrum is achieved. Carillion and Capita. pressure groups and local communities does not negatively affect Serco. business to customer distribution (B2C) Customers Serco’s provide services in many sectors of civil government. They invest in communities and support local groups aligned to community development and environmental preservation. media. Serco however controls the market share guided by a strategy of opportunities to make money out of governments spending cuts. 7 .MARKETING SID# 0971446/1 Shareholders.e. Serco’s profits and dividends were satisfactory to shareholders and employees are quite happy based on the employee survey report.12 billion in 2009). Market trends indicate that the government cost reduction strategy shall provide further opportunities of investments. Competition Serco has two competitors. Their objective is to aligning themselves to profit from government outsourcing by specializing in the government civil sector. thereby increasing customer base. Intermediaries Serco does not have intermediaries as they provide service directly to customers I. trade unions. Serco’s competition is not as resourceful or structured to align itself to win contracts in area that Serco specializes. Both competitors have strong brand awareness with capable staffing in the areas they operate.

Change in political leadership or government would not result in significant risk to Serco as the governments’ priority will be to reduce public expenditure.MARKETING SID# 0971446/1 4. Social The UK social sector remains affected by governments spending cuts. social and market infrastructure.8% which currently exist. Many nationals are emigrating. however are countered by immigration. Interest rates are relatively low and set to remain to promote private sector spending.42 Macro Environment PESTLE Political The British political environment is stable with excellent physical. GDP has begun to rise slowly since the second quarter of 2009 and is expected to be 2. Economical The British has a highly developed economy. The current leadership is attempting to curb the effects of a second recession as already experienced by Germany (the largest economy in the European Union).5% in 2013 from 1. Corporate tax and inflation is relatively low and the current trends indicate that it will maintain with a modest degree of uncertainty till 2013. Local economic trends indicate continued loss of jobs over the next four years in the private sector due to economic uncertainties. The government is outsourcing its services as a cost cutting strategy in the public sector. The pound sterling is currently and is projected to remain stable. which is an area that Serco has a proven track record and also has a memorandum of understanding to support the government reduced spending strategy. The UK population is expected to continue increasing as net positive immigration continues to occur (5million increase in population over 8 . It is in recovery process from the recent financial crisis. The British political system has hundreds of years of experience and is capable of managing the effects of the global financial crisis.

There exist a wide variety of cultures due to the wide geographic spectrum of immigrants. It also allows companies IT systems to easily integrate to effectively manage units that are geographically apart. employment. Most people use technology to conduct daily activities of shopping. The legal framework regulating UK business law is the Insolvency act of 1986. The UK legal frame work is clear with distinct separation of powers minimizing influence from the executive to the legislative arm of government. This is expected to place additional pressures on the social services. Solid and easily upgradeable infrastructure exists to accommodate a fast passed rapidly growing technological industry. it is legislation designed to ensure Britain’s readiness for the digital age. marketing and sales.MARKETING SID# 0971446/1 the next 10years).15 workers to a retiree twenty years ago to 2009 respectively. Legal The UK has a long standing and robust legal system. communicating and conducting personal business.9 to 3. data protection. The standard of living in the UK is relatively high for both immigrant and nationals with immigrants having better attitudes towards work and are preferred candidates for employment. production facilities and raw materials and national parks and wildlife areas. The Digital Economy Bill is currently in parliament for approval. the UK Corporate Governance Code and the EU directives. Technological The UK is a mature economy and is highly technological. health and safety. The laws governing criminal activity. The laws are closely monitored 9 . the Companies Act of 2006. The UK environment was considered in the designing of economic and social systems such as transport systems. The demographics have significantly shifted to a large aging population from 6. Environmental The physical environmental is advances compared to other nations. The UK has a command and control environmental system where the command aspects enforces the relevant laws such as Integrated Pollution Prevention and Control (IPPC) and New Environmental Policy Instruments (NEPIs) to monitor and control environmental laws. environment and taxation in the view of consumers and companies are well established. company governance.

5.0 COMPETITORS SITUATION Major forces that determine industry attractiveness Porter’s 5 forces: Figure 3 10 .MARKETING SID# 0971446/1 and several companies have been fined heavy penalties for acting contradictory to the governing environmental legislation.

 Diverse portfolio and cash stream  Company not fully aligned to profit from  Resilient business mix. OPPORTUNITY THREAT  National and local governments around  Recent negative media allegations of 11 .1billion  Have businesses that are not in high  Strong cash flows.1 COMPETITORS SWOT Company Name: Carillion United Kingdom COMPETITORS#1 STRENGTH WEAKNESS  Solid order book £11.  Integrated services in alignment to UK central and local government departments.  Ranked as one of UK’s largest support company.  Solid business strategy resulting in sustained growth over the past seven years.MARKETING SID# 0971446/1 5. demand. government sector. governments spending cuts in the civil  Falling debt.

public services to citizens at a lower cost (alignment with government’s  Costly fines incurred (£5. market.  United Kingdom largest provider of 12 .  Overdependence on United Kingdom  Strong cash flows.3million) from drive to cut its spending).MARKETING SID# 0971446/1 the world face unrelenting demand from citizens for better public services. OFT (UK financial regulatory body) for bid rigging.  Sell non-core businesses to increase cash for investment/expansion. its entire portfolio’s. bid rigging emphasizing poor ethical principles which can tarnish company’s  Develop strategy to provide better image.  Government cuts spending.  Increase advertising to promote Carillion’s name as the primer provider  Loss of contract from bid rigging of service to citizens and investors in charges. outsourcing activities. 5. companies who are in alignment with  Seek new business from government government departmental needs.  Enforce ethical principles to all staff  Acquire or merge with companies that are currently in alignment.  Loss of confidence from investors  Expand portfolio in alignment to  Competition from other large service government departments. investors from recent global financial crisis.  Negative effects (loss of revenue &  Hiring and keeping the right people.2 SWOT Company Name: Capita United Kingdom COMPETITORS#2 STRENGTH WEAKNESS  Strong financial performance.  Consistent year on year growth.  Expand into new international markets.

public services to citizens at a lower  Competition from other large service cost to bid and win government companies who are in alignment with contracts (alignment with government’s government departmental needs. OPPORTUNITY THREAT  National and local governments around  Difficulty in winning government the world face unrelenting demand contracts from recent allegations of from citizens for better public services. political funding scandal.3 SWOT SUMMARY OF COMPETITORS 13 .  Outsource services from low cost providers (IT support from India).  Negative effects (loss of revenue &  Expand service portfolio in areas of investors from recent global financial government outsourcing.  Strong competitive position in the United Kingdom.  Develop strategy to provide better  Loss of confidence from investors.  Expand into international markets  Diversify portfolio in alignment to  Government cuts spending.MARKETING SID# 0971446/1 business services. 5. drive to cut its spending). international market requirements.  Acquire or merge with companies that are currently in alignment to target market both local and international. crisis.

 Ability to take advantage of global trends.  Ability to choose the best opportunities 14 .  Strong reputation and track record of  Poor Internal control and risk delivery.  Strong position in selected markets. management systems.0 SWOT SERCO STRENGTH WEAKNESS Strong financial performance  Inability to bid successfully when companies form consortium (as with  Strong cash flows. Both competitors have a degree of negative publicity in government affairs which may lead to difficulty of successful contract bids in the civil government sector.3billion  Consistent year on year growth. Both competitors have similar weaknesses of underdeveloped portfolio in government civil sector. 6. years. AMEC consortium who won a 1. per year to de-commission UK largest  Proven cost effective civil government Nuclear power plant).  Broad portfolio of international government clients in both east and western countries.  Diversified business portfolio in over 30 countries. Both competitors have the potential to give Serco fierce competition if they develop a strategy to align themselves to the cost cutting initiates of the government by acquisition or merger with existing firms to attain expertise and resources.MARKETING SID# 0971446/1 Both competitors have strong order books coupled with a diversified portfolio with a strong company base in the United Kingdom. management as indicated by Serco’s  High revenue contracts for the next 3 2009 financial statement.

.  Acquire or merge with companies that  Failure to have sufficient funding to are currently in alignment to target meet current and future business market both local and international.  Increasing demand for services that  Government using consortium as servo effectively supplies preferred bidders due to their CSR internationally. programs.  Outbreak of pandemic illness that severely affects our ability to operate and meet contracted commitments. requirements. 15 . opportunities or results in changes to  New opportunities in new EU members existing or new contracts. To increase customer count by 10% over 3 years. . OPPORTUNITY THREAT  Service sector market potential of  Competition forming consortium to win £28billion to tap into. To strengthen the company’s position and increase market share by 5% per year for the next 3 years in current market. government contracts. To increase dividends per share by 4% year on year for the next 3 years. To increase revenue by 6% per year over 3 years. and/or costs.  Further expand service portfolio in  Significant change in government areas of government outsourcing both policy that impacts market local and international.0 MARKETING OBJECTIVES . states. 7. To enter into new markets internationally to grow the company by 10% over 3 years. .MARKETING SID# 0971446/1 when they arise.  Significant changes in rates of inflation  Outsource services from low cost directly impacting revenue generation providers (IT support from India). .

0 MARKETING STRATEGY MARKET STRATEGIES 16 . Ansoff PRODUCTS 10.0 TARGET MARKET Serco Civil Government Service Group targets government agencies both local and international in the areas of home affairs. Serco has an existing image synonymous with quality and service at the lowest cost both locally and internationally. information technology. education. National and local governments around the world face unrelenting demand from citizens for better public services. A change in government would not affect previous cost cutting strategy as economical pressure are prevalent and would remain at least with in the short and middle term period 3. etc superior service at the lowest price to the customer. governments themselves are faced with cost pressures in the recovery from the recent financial crisis. 11. 2. integrated services. however they are not as established as Serco but have high growth potential and are aligning themselves to become a premier service provider in the civil sector to gain from government outsourcing strategies in cost reduction. Competition aware of the above stated governmental pressures.MARKETING SID# 0971446/1 8.0 ASSUMPTIONS 1.0 POSITIONING Matrix: Current New Operating Currently Serco seeks to PENETRATION: Product increase market position itself as a replacement MARKETS share premier service New Entry provider in the area Market Development: of civil government Diversification new users. 9. that provides segments. welfare to work. By extension the entire demographic spectrum is achieved. children services healthcare and consulting.

17 . Promotion Market penetration in existing markets shall be promoted using several methods. making them want to return. MARKETING MIX Product/Service Offer a service that is superior to the competitors. magazines. As per Ansoff matrix this would be the best strategy to achieve the short term marketing objectives. billboards. These mediums shall also promote social and community activities that have already been done by Serco for the public. Physical mediums shall be used to promote Serco’s image and name such as television. Pricing Offer prices that are competitive such that customers are satisfied with value for money Place Distribution of the service will be directly from the institution (business to customer - B2C). increase customer count and increase dividends to stakeholders.1 SHORT TERM Strategy: Market Penetration The market penetration strategy was used based on the marketing objectives of increasing market share in existing market. Persuasive and reinforcement advertising shall be used to promote Serco’s exemplary service of “Bringing service to life” to attract new and maintain existing customers.MARKETING SID# 0971446/1 11. radio. newspapers. in a comfortable environment making it memorable for the customers.

MARKETING SID# 0971446/1 On the softer side. communities and NGO’s shall be used to perform community services to promote social well being. As per Ansoff matrix this would be the best strategy to achieve the short term marketing objectives. treating both employee and customer in a manner consistence with excellent service. Process Processes shall be implemented to guide employees to consistently provide a superior service as well as guide the customer on what services are offered and how it can benefit the customer. Management shall also promote this philosophy by leading by example. Physical Evidence Records of persons visiting the institution. customer feedback sheets and articles in newspapers and television promoting the community work that have been done shall illustrate the experience of the customer at Serco. MARKETING MIX Product/Service 18 . coordination with governmental institutions. A scenic area of high population traversal shall be maintained by Serco. In addition local sport associations shall be sponsored training gears and equipment to promote Serco’s commitment to the society. 11. to illustrate Serco’s commitment to the environment and to promote brand awareness People All employees shall undergo refresher training in customer service to ensure consistency in quality service and to promote that the company’s image is literally in the hands of the employees.2 LONG TERM Strategy: Market development strategy The market development strategy was used based on the marketing objectives of expanding into new markets to ensure company growth.

Networking with governmental agencies in sponsorship of sporting. Promotion Promotional activities for new market entry shall be promoted using several methods. internet billboards. charitable and social and religious events shall be used to promote commitment to the public whilst building governmental relationships and awareness.MARKETING SID# 0971446/1 The culture of the place of interest shall be studied and a strategy developed to provide superior service in alignment to existing cultural norms and practices. newspaper articles illustrating the Serco’s commitment and employees and customer surveys to understand both customer and employees satisfaction. Secondary promotion shall be achieved by forming networks with existing established non competitive brands/names to perform community and national service promoting environmental commitment. mobile units shall be used to reach distant customers. It shall also create an ambiance of value for money Distribution Distribution of the service will be directly from the institution strategically located/acquired and convenient to customers and as an initial strategy. radio. People The people in the areas of interest shall be employed and trained in customer relations and also have experiences Serco employees visit the institutions to exchange knowledge and ideas to ensure consistent quality service Physical Evidence Effective promotion shall materialize as successful bidding for civil contracts. Pricing Offered prices shall be competitive to create an impact in the new environment and focused on attracting customers. public spaces and newspaper advertisements. Brand awareness synonymous with quality service shall be developed using Television. 19 .

000 CONTINGENCY £1.0 FORECASTS AND IMPLICATIONS 12.000 .000 £1.000 £750.000 £1.000 £200.300.000 Agencies SPONSORSHIP/OTHER TOTAL £500.000 £100.500.Radio £1.000 £350.000 .000 .000 .000 NETWORKING TOTAL £1.1 FORCAST AND BUDGET .285.000 £450.000 .3yr projection MARKETING EXPENCE 2011 2012 2013 BUDGET ADVERTISEMENT £6.000 .000 £750. 12.000 .000 £1.Billboards £750.000 £1.000 £500.000.000.000 £5.475.000 TOTAL .000 £100.000 £500.000 .Community £300.000 £150.Television £2.000 £260.000 £600.000.MARKETING SID# 0971446/1 Process Processes shall be implemented to acknowledge cultural differences and provide guidelines to ensure consistence in quality service management in an ethical manner.News Papers £1.Governmental £700.000 £500.000 £1.750.000 £125.000 £ £400.Local Sport £150.Social Events £150.Internet £1.000 .500.000 £1.000 £275.000 £250.000 £125.750.000 £200.000.000 £1.Public spaces £300.300.000 £750.000 £375.000 .Charitable Events £200.000.000 20 .100.

249 billion £1.61 billion 12. 3 2.168 billion £1.3 The graph below illustrates the above tabulated data.5 0 2011 2012 2013 3year Marketing Projection Expected Profits 21 .9 billion £2.7billion £1.5 2 Revenue 1.2 M ARKETING JUSTIFICATION MATRIX YEAR 3X3 MATRIX 2011 2012 2013 Total Revenue £1.651 billion £0.5 Profits 1 RunningExpence 0.350.4 billion Total Running Expenses £0.79 billion Total Profits £1.975.532 billion £0.685.000 £6.000 £7.MARKETING SID# 0971446/1 BUDGET TOTAL MARKETING EXPENSE £9.000 12.

S – Networking and social activities locally. internet or radio advert X – Local advertising in existing market X – Advertising in international markets only X – Radio announcements at peak listening time daily and sponsored talk show programs weekly. Television X X X XC X X XXC XX XX XXC XX XX XXC X XX XC XX X XXC X XX XC XX X XC X X XC X X XC X X XC X X . Local Sport S S SS S S S . it has many compositions as illustrated in promotional plan S – Networking and social activities internationally. Radio X X X X XC X X XC X X XC X X XC X X XC X X XC X X XC X X XC X X XC X X XC X X XC X . Public spaces X X X X X X X X X X X X Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx Xx NETWORKING Community S S S SS SS SS SS S S S S S Governmental S S S SS SS SS SS SS S S S S S PONSORSHIP / OTHER . Xx indicates that an area both local and internationally will be maintained x by Serco to promote brand awareness. X – 1 newspaper page every Saturday highlighting Serco’s commitment of “bringing service to life.” I – Internet promotion on all social web sites X – Local and international billboards. News Papers X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X . MARKETING SID# 0971446/1 12. Charitable Events S S S SS SS SS SS SS S S S S . X – One X indicates that one local public or scenic area will be maintained by Serco.4 ADVERTISING SCHEDULE MARKETING PROMOTION 2011 2012 2013 SCHEDULE ADVERTISEMENT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec . the increasing number indicates a change (11 changes) in billboard picture promoting Serco in a different positive light. Social Events S S SS SS SS SS SS S S S S Legend: X – Advertising in both local and international markets of interest X C – Indicates that a pervious community service was promoted in a TV. Billboards X X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 . it has many compositions as illustrated in promotional plan 22 . Internet I I I IC I I IC I I IC I I IC I I IC I I IC I I IC I I IC I I IC I I IC I I IC I I .

0 MONITORING AND CONTROL Continuous monitoring of the marketing plan is essential. 23 . 15. 14. This data shall be used to formulate informed decisions to guide the marketing plan in the direction it was originally intended.0 Conclusion Serco’s business strategy of bidding only for profitable contracts has proven to be highly effective. Several methods shall be used to monitor are: • Monthly meetings to discuss present situation • Monitor profits on a monthly and quarterly basis • Monitoring of the competition on a monthly basis • Comparison of actual versus expected revenue and marketing cost. comparing actual versus budgeted/projected values.MARKETING SID# 0971446/1 13. A separate budget has been instituted to compensate for any additional spend during the life of the marketing plan.0 Contingency Plan Based on finding from the monitoring and control appropriate action can be applied by the marketing manager to recover from any inconsistencies. The marketing plan developed in this paper collates the CSR mechanism and effective marketing tools to propel Serco to its ultimate goal of being the largest service provider company in the world. Serco did not have a marketing plan previously but had a corporate social responsibility (CSR) mechanism. Its revenue stream is predictable based on contract life and investments can be made in this light. ensuring activities are completed as scheduled and preparatory works are also completed for upcoming events.