ADV 330: Management Issue Gotcha

Purpose

The purpose of the assignment “Stick to the Core or Go for More” is to decide whether to expand the market or not. As an agency that is set up with the most significant advantage of creative thoughts, Advaark is facing an objective that a client is begging them to provide new services as an interactive advertising brand.  Therefore, they are debating whether they should add the new services about strategy consulting to get new businesses and customers, or maintain its core competence and still offer the best creative advertising service.

Background/situation analysis

As an agency has been operating for seven years, producing creative ads and assembling creative persons to the company. Advaark has already earned good reputations and accumulated Clios among the industry, which brought them some high-profile accounts such as GlobalBev. As the co-founder of the agency, Rafferty was a flamboyant visionary who was never content with the status quo, while Caldwell has a sharp focus and operational skills. Recently, George Caldwell and Ian Rafferty are having arguments with the idea that if it is necessary to add a new strategic service in their product line. The idea arose from the ads directing process they did for GlobalBev’s new energy drink brand. Rafferty recommended the CEO of Globalbev about the time to get into energy drinks, and the suggestion perceived great reflects.  Not only GlobaBev but also one of their former clients Botanic Beauties also request about the new service. However, Calwell regards this move as risky to the achievements they had; he is not sure should Advaark stick to its core competence or go for more opportunities.

Discussion of Alternatives

Choice #1 Launching a brand new service for the clients to consult and solve their problem, such as providing advice and guidance for their product. Since there were already two clients who asked about Advaark to offer a strategic service, this would bring the agency a higher reputation within the industry and attract more potential clients rapidly. The risk is that launching a service, they knew nothing about might be a detrimental decision to their existing success of Advarrk, and destroy their expectations of the increased revenue.

Choice #1 Do nothing and refuse the requests from the customer. Maintain the core value of Advarrk that they set up at the beginning,  which was to create the best ads and maintain its own culture in which innovation thrived. Focusing on advertising and creative people would bring the brand steady development in the future, but would not bring them into the new arena, they could not get the potential revenue as well. Moreover, other agencies might offer their customers more services as a one-stop shopping and became huge threats to Advaark and led the requested clients to feel their needs are not considered seriously.

Choice #3 Keep a wait and see attitude because there is more risk than they expected within the market. However, giving the clients what they request about business strategies, is an additional service to the advertisement, as part of Aadvarrk's production itself, instead of costing much money to create a brand new department. The risk of doing so might cause a reduction of existing customers, who may not be satisfied with the partial service they were given.

Rationale

Choice #3 Keep a wait and see attitude because there is more risk than they expected within the market. However, giving the clients what they request about business strategies, is an additional service to the advertisement, as part of Aadvarrk's production itself, instead of costing much money to create a brand new department.

That might be a middle ground between giving the clients what they want for their brand and ignoring them simply because two clients cannot represent the whole, not every company corporate with Advaark need the strategic consultant in their service. Additional service is a possible way to do something like offer a partial service that addresses the needs of the clients without having to put in many resources into it over time, and they do not need to risk in other competitions with other consulting firms.

Action Plan/Next Steps

1. Set up a meeting with the fellows of the agency to confirm the decision of additional service, instead of stepped into a brand new industry, ensure the core value of Advaark once again, and assign everyone’s responsibility and workload within this  meeting, and try to provide an outline or preview for the operating mode of the additional service.
2. Set up a meeting between the co-founders, to confirm what steps should be included in the additional service, How much does it cost besides the creation of ads, and the most important is, what should Advaark research and learn before they provide clients the strategic recommendations they want to make it more professional.
3. Send emails to all their existing customers about the new decision, as in the modification, what they would benefit from, and if there is someone ask about the additional service, Advaark could provide to behave as they please, but other companies who do not need the service can also ignore the plan.

Contingency Plan

If Advaark chose to stay and watch and find there are more and more agencies add such service and became their threats, or they find they have the potential to be an expert of the strategic area with their real experiences. It is time to add up a new service formally and advertise it using their strength.