MMM31-assessment PDF

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Summary

WRSX simulation...

Description

Business Simulation Report of WRSX

Team Allocation:

Group 8: Name: Allen Luu Student ID: 216094492 Name: Kim-Ly Taing Student ID: 214098262 Name: Kishin Siva Sivasuhramaniam Student ID: 215205135

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Executive summary, conclusion and Reflection: (Kim-Ly) BM1: (Allen) BM2:(Kishin) BM3:(Zaniul)

Name: Naziul Islam Student ID: 215272743

Tutorial session day: Monday 11:00am – 12:00pm - Deakin Burwood Campus

Executive Summary The main purpose of this report is to analyze and evaluate on an overview of the board meeting and to choose various agenda items for each that should presents the best action for WRSX organization. The first board meeting saw an evaluation on the proposal of the agenda item one in regard to market opportunity in China and item six on the rise of digital communication that has significant effect on advertising market. In the second board meeting, the three important parameters that represent a concern to WRSX Company are the impact of client churn, corporate governance issues and value adding of the parent company. Following this, management also gives raise to board meeting three, where there were discussions on whether WRSX should outsourcing group-wide of their entire HR Centre, the launch of CineFX in London and New York and the Opportunity to develop in the Asian SME.

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Board Meeting One

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Board Meeting Two Board Agenda One: Reducing Client Churn The situation at hand in this agenda item is to touch on ‘customer churn’ also referred to as attrition is an ideal metric used to gage the number of subscribers that discontinue over set period, addressing this ahead of occurrence is key amongst firms when dealing with their customers for retention has proven to be more effective when considering it’s features to that of acquiring new individuals (Kumar, Leszkiewicz and Herbst, 2018). America based on behavioral statistics in the context current to our scenario it’s understood that the average customer may develop a habit of moving to a new advertising agency every 4 years, which is threatening for WRSX on the longrun, especially when dealing with top-notch clients that boast the company’s frontier to be a significant player in the industry. Feedback has been collected from clients that recently left the organization for an understanding on what the company is dealing with, it goes onto highlight practices within the organization that need to be improved or more appropriately dealt with, some of which are; ‘newly replaced marketing director’, ‘lack of understanding client’, ‘careless marketing budgets’, and ‘creative intransigence or arrogance’. Lloyd Silberstein, the President of the New York Office following raising his concern in regard to the potential churn rate, he goes onto propose a ‘Strengthening Client Relationships’ (SCR) strategy with looking to cease all potential concerns clients may have whist bettering the existing relationship and optimizing value from us to them in every area they may need assistance in. Each business will be assisted with a Client Relationship Manager (CRM) who will look to deal with any custom scenarios the firms may need attention to and work towards bettering their experience consistently available to reach out to. Taking WRSX’s challenge into consideration, we believe the most appropriate solution to take would be ‘Action Option A’, propositioned for a duration of three years totaling to be £3.6M will cover the ‘Strengthening Client Relationships’ program that will focus mainly on the Top 10 clients of each industry as losing them will also mean the most financial damage for our institution therefore it’s best we prioritize and operate to eliminate risks.

Board Agenda Five: Corporate Governance Issue WRSX boasts a proud portfolio of sports clubs, personalities and institutions worldwide amongst its clients. Some accounts from this industry that we possess happen to be some of our most significant customers on the whole.

Our New York flagship recently called for a coalition with an institution in Buenos Aires looking to unfold a PR agency focused for footballers and football clubs in their region of Latin America. Following the partnership executing our newly found clients, we received some tragic news of our clients being involved in a potential scandal

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holding them accountable for corruption within the nations league as well as their national team also an appropriation of funds in millions hidden in tax havens. It’s important we address our outlook in regard to this issue for it reflects dauntingly on us and to our other clients who also happen to be from the same industry who have an image to uphold. ‘Action Option C’ is the best fit solution for this issue faced by our WRSX team in America, this option will firstly implements the proposed ’10 Point Code of Business Conduct’ which will assist in rejuvenating the firm’s members of their values, obligations, ethics while handling operations honestly and fairly. Eliminating the two local directors implicated in the scandal is important to establish to the frontier that those in controlling positions during time of this misconduct is are no longer involved with the organization, at least until everything is addressed and they have been proven clean. The PR campaign needs to scream to the community on how we have acted to address the situation, hoping to reestablish in their minds that our credibility is our utmost concern whilst that we take the sports industry extremely seriously. A thorough review of WRSX’s corporate governance model is also crucial for this will reinstate we are striving for transparency. Implementation of this campaign will cost us £750 000 and is well worth it for we have more potentially interested ventures interested to partner with us while this will aid in extending our existing contracts too.

Board Agenda Six: Does the Parent Company Add Value? WRSX has grown to become larger than doing only advertising, although that’s our main identity the institution now functions also as a holding company when acquiring competitors businesses or other ventures. Although the main goal is to bring further value to our primary clients, our expansion was also a result of our clients spreading geographically, instating demand for us to make ourselves available to them. Mervyn Hill-Lewis raises attention to whether the group functions adds value at an affordable cost when currently there are layers of bureaucracy that object the relevant parties from responding promptly. WRSX may need to readdress some of our operational logistics and how our structure is currently allocated that may not allow our smaller companies to function as one due to parameters unique to their work environment that may contradict with ours. Purpose behind encouraging reorganizing our structure is to further optimize value we provide to our consumers whilst also maximizing profits and performance. Considering all issues at hand, ‘Action Option C’ is the most idealistic; it touches on repositioning the parent company appropriately. Managers need to be appointed to review our group of company’s financial standing, output based on client’s perception of value-gained and collective use of resources. Managers need to further document their findings to assist top board when deciding whether to buy in or not. This review setup will cost £300 000 and there will be benefits by ceasing any potential acquiring of underperformance in the group. An estimated £600 000 could be saved annually by avoiding unnecessary group functions, exceptional to procurement; this will also enable a better negotiating standpoint with WRSX suppliers.

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Board Meeting Three Board Agenda One: Outsourcing Central Services Outsourcing a Group-wide of all their HR, WRSX could save a lot of money in the process. According to Leena, WRSX could save up to $3 million in the first year, $2.5 million in the second year and $1 million in the years thereafter. Leena also noted that traditional way of their industry was that “our people are our most valuable asset but that also resulted a bigger cost for WRSX. According to the survey, four out of five businesses have outsourced their HR function or have planned to outsource them in the future. WRSX was facing a Strategic drift in their business, which is why they were proposing the idea to outsource their HR functions. The survey research also tells us that 56% of HR directors were happy with their outsourcer, which means that WRSX would be able to keep their standard even after outsourcing their HR functions. WRSX is trying to implement the Cost-leadership strategy where they focus on achieving the competitive advantage by implementing low cost position to distinguish with their competitors. They wanted the HR specialist to provide the advice over phone or email, which would have been a big help for the smaller business, which was driven by poor service from the WRSX central HR in Paris. Outsourcing their HR functions will improve their client service and help them to be more diverse. Although Option B would mean a one of cost of $2 Million in the six-month period but they will be able to save $1 million per decision period, which is beneficial in the long run. Board Agenda Two: Launching Cine FX in London and New York CineFX Paris has been doing great in the past year. It has been providing postproduction services to other production companies. Since the ‘vertical integration’, they have won many awards, which attracts new clients. The decision of not going ahead with the Jean-Luc Breton’s proposal would be costly as according to study, the current turnover from CineFX is $12 Million and would be doing as much as the turnover in US and UK in the upcoming two year period. After Investing for the equipment in the last year, they are facing higher demand and there are possibilities for them to grow in the near future with the services from CineFX Paris. They could have considered CineFX to be an SBU (Strategic business unit) for WRSX. This would help CineFX plan their own strategy for their market and help them serve client according to their needs.

According to the Management of Risk, the risk is being decreased from 40.3 to 39.7 after the board meeting three, which is a good sign however; the growth of the business remained constant from period 2 to period 3 of 55.3. The client attraction & Retention did not increased as much as expected, as it was 60.2 in period 2 and 60.8 in period 3, which is an increase of 0.6.

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I feel that they should consider it as an investment, which will generate further revenue in the future and would play a key role considering that the post- production is in demand.

Board Agenda Three: Market Opportunity Asian SMEs The board not considering this proposal for SME focus by Xiuxiu Li would mean that they might not require doing the investment to set up a new advertising business in Asia. This has been represented in the Income Statement for WRSX. The establishment costs, as for period 2 was $23.2m whereas the establishment costs on period 3 was $24.1m, which shows that there was not sufficient investment in the setup of new advertising business in Asia. WRSX have the capabilities to develop their new business with excellent creative teams and technological experts in web design with in depth knowledge. In According to Wikipedia, 99% of all firms are SMEs and globally SMEs hold 99% of business numbers leading to 40% to 50% of their GDP. Not pursuing such great opportunity to set up business in this region would mean that they might miss out large portion of revenue in Asia-pacific region. According to the Income Statement, the revenue in period 2 was $238m and $239.7m in board meeting 3, which shows that this decision was not very efficient for WRSX. Although, not setting up the new business may result loss in revenue, however, putting an project team will mean that they will have sufficient time to understand the vast SMEs market and introduce appropriate plan/strategy to make it more appealing to the clients. It would be more a good opportunity for WRSX to set up a SME focus business, which would result more market share.

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Conclusion: In all, the discussion on the market opportunity in China of the first meeting has been concluded, where board director of WRSX has made a decision to go with action option……… The emerging in digital media gives a warning sign to WRSX that required them to take immediate action, if they want to survive in the long run. The action undertaken by WRSX and management team is to further expand their digital media brand, so that they can stand out in the competitive market. In Board meeting two, the management raises a concern on the client churn being out of control for the WRSX Company. Where the board director made a decision to go with option A to encourage and retained it major top 10 clients. Additionally, the management has raised a concern on the recent involvement of corruption scandal on some of their major clients. The management has taken immediate measures to handle the situation, where they go for action option C. The last agenda item gives a concern toward whether WRSX parent company function will contributing to adding value to subsidiary companies. The management team concluded to go with action option C to repositioning its parent company. This board set up a new team of managers to evaluate financial review performance. In board meeting three, action option B was taken for decision-making as the board believe that by outsourcing The WRSX HR department will not only help to cut management cost, but also will add value to the organization and create diverse work environment. The CineFX in London is favorably doing well in the past few years, therefore the WRSX organization should consider to make investment to increase group turnover and profitability. Additionally, There’s a huge advertising opportunity in the Asia pacific region that WRSX can take on to expand their services business. If they were overlooked on this opportunity would mean that they would lose a large portion of revenue within the region.

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Reflection In the second phase of our assessment, we have delegated ourselves into a task, where Allen to board meeting one, Kishin to Board meeting two, Zaniul to board meeting three, and lastly Kim-Ly on executive summary, conclusion and reflection. Everyone was happy with the delegation of task, as they were given a choice to work on they issues that they feel confident with. Once all tasks has been assigned to all members on our team, we occasionally would communicate with one another via social networking mean, when we find ourselves stuck on a particular issues or when new ideas has been discovered. Initially starting out of the first assessment, we’re quite the difficult team to communicate and they’re a misunderstanding between the members. However, the second assessment saw the level of integration and communication has widely improves, as we become known to each other. This is where we beginning to establish a good relationship as we progress throughout the assessments, therefore, our team eventually was able to developed high-task team, where all members is prioritizing their work by ensuring to do the best of their ability. In term of the contribution to the project, our team has played a different role in offering to the group progression. Kim-Ly is the sort of person who likes to get things done ahead, so that he can stay on top of everything. Where he always encourages others to do the best of their ability and he is an approachable type of person. With his ability to manage his team by ensuring everything is running smoothly and that any conflict is resolved in a timely manner, Allen has his own unique way in bringing the team together. Kishin has an outgoing and friendly personality, where he makes the group meeting more enjoyable. While, Zaniul can be slack off at time and always procrastinate about the work, but manage to complete his obligation on the task within the given time. After all, we always reminded each other about the deadline and that no one get left behind. Our team is highly efficient and motivated to do things, where everyone is participated well and prepare adequate materials before each meeting to ensure that we make use of our time. There are advantages and disadvantages that we have identified by working as a team. The positive aspect that we have in working as a team is there’s a variety of knowledge and attributes has been offered into the project because each one of us came from different area of discipline. Therefore, we were able to critically analyze and evaluate of the ideas into one in order to form our business report. Additionally, we feel that by participated in the team project has given us the opportunity to think outside the box and that we were able discovered unfamiliar topic from one another. In contrast, we have identified that the disadvantage of working in a team is that each one of us has a different perception on how we see things. This creates complication for all of us as our ideas could easily be ignored. However, our group starting to learn by accepting and understanding each other differences each time we communicates with one another. Therefore, this has allows us to be able to complete our projects on an acceptable level. In all, we thoroughly enjoyed in completing the project together, especially when good relationship was built. Where we have to faced with the many challenges and

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overcome it together. We all believe that this is the key aspect in the team, without it, our goals cannot be align together.

Refer to the appendix 1.0 for photographic evidence of group communication.

Appendix 1.0

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References Kumar, V., Leszkiewicz, A. and Herbst, A. (2018). Are You Back for Good or Still Shopping Around? Investigating Customers' Repeat Churn Behavior. Journal of Marketing Research, 55(2), pp.208-225.

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