Case study on Saatchi Module 3

p CASE STUDY ON SAATCHI MODULE 3

2007

Saatchi Saatchi is a Communication Agency firm and in the line of business of Advertising , Marketing Strategy , Consumer Research and Forecasting etc .The company is functioning for the last 45 years and its Head Quarter is based in New York City . It has its presence in 82 countries of the world , having a staff of 7000 employees and 138 offices positioned in different locations . Its overall world wide ranking was 18 during 2001 and had 56 biggest clients . During 2001 it had a turnover

of 7000 billion

During recession period of 1990 its financial position gradually started crumbling and by 1995 it became bankcrupt .The old team was not in a position to revive the position any and it was proposed to handover the reins to a new persons . In 1995 Bob Seelert took over as Chairman and Kevin Roberts as CEO .The team started working putting new steam in the set up . The team devised the goals - Lead , Drive and Prosper

The management persuade the team members that they are not so far apart in their viewpoints and address the key points . The phase involved with focus on development and market share . The means employed were new ideas , new markets and increased market penetration . Revenue driven reconfiguration of business assets was the ideal solution . Efficiency maintenance strategies were carried out Recovery is said to have been achieved when economic measures indicated that the firm has regained pre - downturn levels of performance

The company thought of a new recovery strategy that emphasized growth by reducing the manpower at some of the units

Turnaround Situations : Severity and Speed of Strategic Response

The nature , extent and speed of the appropriate strategic response depend primarily on dimensions of the situation severity and causality Severity of the turnaround situation is a measure of the firm 's financial health it gauges the magnitude of the threat to company survival . Since the immediate concern to Saatchi was the extent to which the decline is a threat to its short-term survival , severity is the governing factor in estimating the speed with which the retrenchment response had been formulated and activated . Of course , performance that declined relative to that of competitors , but not absolutely , may necessitate almost no retrenchment . A reconsideration of strategy with a probable reconfiguration of assets would usually is deemed appropriate

When severity is low , a firm has some financial cushion . Stability may he achieved through cost retrenchment alone . When the turnaround situation severity is high , a firm must immediately stabilize the decline . Cost reductions must be supplemented with more drastic asset reduction measures . Assets targeted for divestiture are those determined to be underproductive . In contrast , more productive resources are protected from cuts or reconfigured as critical elements of the future core business plan of the company , i .e , the intended recovery response

A model of turnaround based on evidence that business firm turnaround characteristically involved a multi-stage process in which retrenchment could serve as either a...