BSM929 Strategic Management – Reflective Writing

Examining Strategic Actions and Decisions

1. Key differences between business plan forecasts and

actual performance

First of all, what was WRSX trying to achieve? What was their mission

and vision along with goals and objectives? In order to help my team

(group 20) consider these aspects, we decided to propose an updated

Mission Statement “We affirm that our purpose is to ensure a sustainable,

modern, efficient and creative customer centric service experience with

dynamic solutions.” This is in addition to fulfilling their original

objectives of introducing innovation and creativity, conserving energy,

reducing carbon emission footprints and using renewable resources

discussed in initial Mission Statement of the profile, in which my clients

considered constructing wind turbines and setting solar panels across

all offices with LED lighting inside and absorb the sun’s rays to transfer

to efficient electrical energy inspired by the case study of Central

Melbourne in USA recently extracting about 74% of its heat and power

from solar panels generating 2354 gigawatt hours on an annual basis

(Lu, D. 2021).

1
We believe that this would create an eco-friendly environment for us to

enhance the following financial and non-financial key performance

indicators included in page 27 of the report in line with sustainability

development goals 7 - affordable and clean energy, 9 - industry,

innovation and infrastructure, and 11 - sustainable cities and communities

(UNSDG, 2021):

1. Generally speaking, we implemented increasing individual

shareholder value and share price by at least £3.9 in our 3rd year

2. Attain global status in marketing by achieving an average non-

financial performance indicator (NFPI) score of 58 in Management of

Growth towards the 3rd year

3. Achieve organic growth and encourage synergies in operations by

aiming a minimum NFPI score in of 52 in Management of Risk in

year 2

4. Improve financial profitability by increasing PBIT margin up to about

25% in the 5th year

5. Improve human resource management by achieving an NFPI score of

53.6 in Leadership Capability in year 2 through training staff on

digital offerings

6. Improve sustainability by achieving an NFPI score of 55 in CSR in

year 1

7. Increase sales revenue of up to £360 million by the end of year 5

1
8. Reduce staff costs down to 50% by the end of year 5 due to lack of

core capabilities in all the NFPI mentioned above

9. Increase Return of Capital Employed up to 35% by the end of year 5

10.Increase CSR and organic growth through Singapore HQ in year 2 for

market development in year 3 reducing psychic distance – as initially

indicated by W. Beckerman in 1956 - emerging into India and China

(Ambos, B. Leicht-Deobald, U. Leinemann, A. 2019)

Figure 1 – financial indicators

Figure 2 – non-financial indicators

Figure 3 – share prices

1
All those decisions were held after analyzing its internal and external

environment through market sector analysis and via various models and

theories where we discovered the advertising and marketing

communications industries to reach their top peaks potentially leading to

high barriers to entry as illustrated in the graph below (Whittington et al,

2020:77). As a result, we could come to conclusions for following

scenarios:

- This corporate company has the potential to expand across Asian

markets following from increased government spending in

international advertising by £585 billion in 3 years and develop into a

‘shooting star’ generating substantial profit revenue, especially for

digital new media and niche marketing industry sectors; primary

problem is its ‘strategic drift’

- Experienced economic, environmental, legislation, technological

downturns, including how they manage global warming,

inconsistencies in rules and regulations

- Incredibly intense competition with lots of other ‘Big Data’

companies commencing Google, Facebook, Yahoo .etc.

- Low competitive advantage in marketing

1
 Figure 4: industry life cycle

However, how have those factors greatly affected WRSX

professional development? The following four tables outline our

final financial and non-financial key performance indicator results

and as you can clearly observe, various significant differences

displayed from figures 1 to 3.

Figure 5: share price trend

Figure 6 – key ratios

1
 Figure 7 - non-financial performance indicators

Figure 8 – price/earnings ratio

Although there were still some similarities, the correlating trends did not

exactly proceed as planned, especially with PBIT margin ratio that did

not increase as much as expected and staff costs remained relatively

consistent throughout all periods which definitely didn’t decrease as

much as estimated. Regarding NFPI measures, we learned by experience

and even though we were EXTRA CAUTIOUS in making such difficult

decisions for each action option, especially by choosing cheapest

1
alternatives to avoid spending so much money, not only did our

Management of Risk struggle to produce positive correlation, it

dramatically dropped down through every phase, despite many attempts

to avoid the riskiest options across all Board Meetings. This raised

countless concerns over our overall performance and whether we were

even developing in the right direction, especially as we seemed to run out

of other options, until BM 5 and 6 when we witnessed these specific

scores steadily starting to make progress again. That was when we

worked out that a concrete cause of those negative activities actually

originated from the fact that the safest option for few cases could be not

to take any action under uncertainties until we step back to perceive the

much broader horizon or otherwise we may face financial fluctuations of

having even larger amounts of money deducted from our bank savings

accounts.

2. Strategic analysis of Board Meeting 4

At this stage, we opted for four following agenda items:

1. Competitor action puts pressure on margins in our market insights

business – WRSX was facing fierce competition among lots of other

‘big players’ which were considering cost reduction to gain market

share, resulting in marginal revenue reducing by 3% for following 3

years. We were then stuck in the middle of an economic dilemma on

whether we should invest in price-driven (low pricing strategy) or

1
 value-driven (differentiation strategy) businesses based on Cliff

Bowman’s strategy clock 1996 (Chauke, N. G. 2021), considering the

‘grey areas’ as to whether we were even adding ‘value’ to our

company in the first place? If not so, then we could’ve considered

working with direct mail out of pure profit, but what were the

consequences?

This was when we used Porter’s five forces framework 1980 (Goyal,

A. 2021) to help us make the right decisions after careful, critical

consideration of the following factors: fierce competition over more

market share with new entrants and substitutes, such as Google,

Facebook, Yahoo and financial drift due to threat of new market

buyers. Despite such competitive rivalry, I don’t think we were able to

do anything at this stage or otherwise this may have led to many more

unnecessary complexities and that left us with option D, which was to

keep calm, carry on, maintain margins as they are and accept the fact

that this could be beyond our control.

2. WRSX Social Impact – Restoring Trust in Business: taking ten

principles of United Nations Global Compact (UNGC) and 17

sustainability development goals (SDG) into consideration, we also

thought about following footsteps of Unilever (Wood, Z. 2021) as

founding member of UNGC that proposed a Sustainable Living Plan

1
 Report in 2015 to address severe social, economic, environmental and

technological challenges in relation to the PESTLE analysis (Dyer, C.

Ulbrich, C. 2016). This was implemented in their Sustainable Living

Brands, one of which went above and beyond by supporting

sustainable farming through transferring €1m annual investments in

Knorr Partnership Fund, gender equality where women were also

allowed to work within Non-Executive Board since March, taking up

45% of their advertised vacancies in order to maintain diversity and

inclusion with 50% balance between gender roles, recycling all

plastics by 2025 with $15m investments into Ocean Fund, reducing

carbon greenhouse emissions to become an ‘eco-economy’ by 2050.

With this in mind, I would have used the BCG Matrix 1970 (Kader, A.

Hossain, H. 2020) to help me analyse our strategic situation and whether

we were merely ‘cash-generating cows’ simply searching to make profit

revenue or ‘shooting stars’ accredited with worldwide fame. Considering

current potential financial risks, I may have left our decisions open

between option A, which was working with SDG Pioneers in order to

help us achieve similar goals and objectives, also saves much more

money, OR option C saying that this is far too risky and our top priority

should be taking extra special consideration for employees and

shareholders.

1
3. Rationalization and cost-cutting – this was actually among the primary

purposes for us reducing staff costs following from 19% falls from TV

advertising revenue and 11% drop in overall revenue, despite the

outdoor advertising industry revenue rising between 15%-20%.

Therefore, if we did NOT take appropriate action, we would have

started suffering economic recession within 2 years following

financial forecasts for substantial spending since second half of the

year, which may not be accurate; nevertheless, we still tried to make

most cost-effective decisions of option C in reducing the number of

offices and combine London and Paris HQ into one.

4. Corporate governance reputational risk: we included this agenda item

in response to our Corporate Social Responsibility and Management

of Risk results falling behind as the Executive Chair leader Juliette

Waldron recently attended a workshop regarding this subject about PR

firm Bell Pottinger suffering South African scandal since the very viral

spread of fake Twitter accounts and social media feeds for covering up

their bribery and corruption crimes in 2017. She shortly received a call

from a journalist asking why WRSX was working with a Mexican

bank strongly suspected of money laundering upon billions of dollars

1
 discovered in wire transfers, travellers’ cheques and cash shipments as

well as paying monthly expenses and fees for $100,000.

We were EXTREMELY SHOCKED upon hearing this BREAKING

NEWS and we knew that this could potentially transform to an

economic crisis much worse than recession if we didn’t decide on the

most appropriate action of option B in sending an URGENT email

explaining this situation and review our management profile.

3. Evaluation of group performance

Throughout BM 1 and 2, we were working on improving management of

risk, especially economic and environmental factors taken to concrete

consideration, including reducing staff costs, sustainability over global

warming. Therefore, we were also very sensitive about our business

budget and we insisted to review financial performance of low

performing subsidiaries, especially in relation to the third item in BM5.

As a result, not only did we manage to decrease staff costs, although

maybe not as much as previously planned, but our share prices and PBIT

ratio results rose significantly. Progressing onto BM3, this was when we

were discussing whether we should enter Asian and Brazilian markets in

India and China, in which we critically analyzed three major strategies:

A. Market development geographic strategy

1
B. Segmentation strategy to improve product and service quality as well

as accounts and management relevant to agenda item 5 in BM5

regarding UK government contracts conflicting between different

accounts and we considered obesity as urgent issue in the UK and US

and that we must take appropriate action persuading people to digest

balanced diets

C. Hybrid strategies emerging into international markets, managing price

efficiencies and differentiating ourselves from competitors, gaining

competitive advantage along the way

However, our financial performance somehow started making low

progress on top of staff costs gradually rising, having reduced printing

costs by group buying power to save £3m for first 6 months and £3m in

consecutive 6 months. This was a critical moment for future decisions.

Should we keep cutting costs to gain 3% marginal profit revenue from

competitors possibly trying to take away our market share? Were we

putting ourselves at financial risk without even realizing? What was

going on? It was these crucial questions that motivated us to make the

decisions we did during BM4, at which stage although our share prices

and PBIT remained relatively stable, our NFPI weren’t performing very

well, so what did we do wrong? Maybe we were so focused on

‘accomplishing our mission’ by the deadline that we may not have taken

time to fully comprehend the whole situation.

1
On the other hand, having already come to such realization, we used this

experience to help us make much more in-depth decisions during BM5

and 6. In Board Meeting 5, agenda item 1 that specially stood out for me

made us acknowledge the importance of integrating considerate work

ethics, thereby adjusting employment policies to become more family-

friendly, people-oriented in the sense that coming to work isn’t merely

doing the jobs, since we must also learn to maintain strong, healthy,

respectful relationships with clients, colleagues, managers/supervisors.

This was achieved through the use of four principles – flexibility, family-

friendly work policies, tapping into ethical values and potential for

impact, all of which require high emotional intelligence inspired from the

heart to the head. Without doubt, we all agreed that proceeding with

option C as working with client companies and suppliers of similar values

would greatly encourage employees to work harder, faster and smarter.

Regarding the third agenda item in BM5 about Audio Image, an

underperforming sub-sector UK audio visual production and staging

business, customers come first always and addressing their wants, needs

and demands in the first instant at least gives them the genuine

impression that this company still understand what is most important,

regardless of their failures. After all, no organization is an island and

gathering different views and opinions actually helps us learn from

former mistakes.

1
Speaking from personal experience, BM6 mainly involved determining

whether we should be working with corporate companies in acquisition as

Silverfish Digital Media, a global digital marketing firm generating 45%

annual growth over last 8 years, in which we chose to critically analyse

whether or not Silverfish have reached their maturity stages worthy of

investing in. The same principle applied to whether we should allow

institutional shareholder to sell all our shares, provided possible financial

risks occurring, to which we concluded financial underperformance as the

issue here. Who knows? Anything unexpected could happen in the

modern society!

Last, but not least, we were finally offered a once-in-a-lifetime

opportunity to emerge with top Asian brands like Hindustan Automative

Limited (HAL), potentially expanding across Asian markets in India,

China, Malaysia, but did we take full advantage of it? Unfortunately,

taking our business budget into consideration, we decided to temporarily

leave it aside and start saving more money for future market

development. It doesn’t matter how much skills, knowledge, experience,

core capabilities and competencies, competitive advantage they pursue,

money is always our most valuable asset.

1
 Links and references

Ambos, B. Leicht-Deobald, U. Leinemann, A. (2019) ‘Understanding the

formulation of psychic distance perceptions: Are country-level or

individual-level factors more important?’, International Business Review,

28(4), pp. 660-671

Chauke, N. G. (2021) ‘The case of Post Holdings buying Weetabix A

critical strategic analysis of the current Strategic Change’, Strategic

Analysis, Tools and Techniques (ST4S38-V1-26008), 10, pp. 6-7

Dyer, C & Ulbrich, C 2016, Building a Better Tomorrow, 2015 Global

Sustainability Report, JLL, Maryland.

Goyal, A. (2021) ‘A Critical Analysis of Porter’s 5 Forces Model of

Competitive Advantage’, JETIR, 7(7)

Kader, A. Hossain, H. (2020) ‘An Analysis on BCG Growth Sharing

Matrix’, International Journal of Economics, Business and Accounting

Research, 4(1)

1
Lu, D. (2021) ‘Central Melbourne could generate three-quarters of its

power from solar panels, study suggests’, The Guardian. 10 Nov

United Nations (2021), The 17 Goals, United Nations, retrieved: Monday

13th of December 2021 < https://sdgs.un.org/goals>

Whittington, R. Yakis-Douglas, B. (2021) ‘The Grand Challenge of

Corporate Control: Opening strategy to the normative pressures of

networked professionals’, Organization Theory, 1, pp. 1-19

Wood, Z. (2021) ‘Unilever offloads black tea business as UK passion for

cuppa goes cold’, The Guardian. 18 Nov