Omnicom: The World's Largest Advertising Conglomerate|Business Strategy|Case Study|Case Studies

Omnicom: The World's Largest Advertising Conglomerate

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Case Details:

Case Code : BSTR089
Case Length : 21 Pages
Period : 2000 - 2003
Organization : Omnicom Group.
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Advertising & Communication

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The 'Campaign' Behind Omnicom's Success

Analysts attributed Omnicom's strong financial performance to its strategy of building a geographically balanced network of operations and entering into different business disciplines in various countries.

They added that the company's client-centric approach helped it identify changing trends well in time and enter new businesses early to leverage the opportunities. Commenting on the strategy of entering new areas based on client requirements, CEO John D. Wren (Wren) said, "We looked at the way our blue-chip clients were spending their money, and that led us to make investments in other areas. Take pharmaceuticals. We saw that the world is aging, and there would be more need for services there. In direct response, we saw the benefit of one-to-one communications. The recession in 1991 taught us that, as people stop spending money on brand advertising, they spend more in sales promotion. Most of the major advertising agencies at the time did not hold those disciplines in high esteem...

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Future Prospects

In 2003, as the US economy was recovering from the slump following the September 11 attacks, the advertising and marketing businesses also began picking up. According to industry observers, advertising expenditure in the US was expected to grow by 4% in 2003 and by 7% in 2004.

Meanwhile, advertising expenditure spending outside the US was expected to grow by 2% in 2003 and by 5% in 2004. Given its strong credentials and successful track record, Omnicom was in a very strong position in the industry with respect to its ability to take advantage of the opportunities provided by these trends. According to analysts, the company's business mix, efficient top management and strong financial muscle were expected to work to its advantage in the times to come. However, some industry watchers felt that since the advertising agency business was highly dynamic in nature, no single company could remain the market leader for long (See Exhibit VII for a brief note on the global advertising industry)...

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Exhibit I: A Note on the Advertising Agency Business
Exhibit II: Omnicom - A Brief Timeline
Exhibit III: Omnicom - Marketing and Communication Services Offered
Exhibit IV: Omnicom - Major Agency Brands
Exhibit V: Omnicom - Brief Profiles of Major Divisions
Exhibit VI: Omnicom - Recognition & Awards Received by Group Companies*
Exhibit VII: Omnicom - Financial Highlights
Exhibit VIII: A Brief Note on the Global Advertising Industry
Exhibit IX: Omnicom - Competitor Profiles

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