Advaark Strategy: Stick to the Core-or Go for More?

In: Business and Management

Submitted By blaine
Words 386
Pages 2
The following case offers a great insight into one of the most fundamental strategic questions facing enterprises: Should we expand our business into an un-chartered territory where we do not have the needed resources? Or, what if you dilute the focus on our core competence by appending ancillary business to our firm? Advaark, the company of our study, is a $550 million New York-based advertising firm with 400 employees. Recently one of the partners at Advaark advised Globalveb, a multibillion dollar holding company for an assortment of food and beverage, to get into energy drink business. Advice was given based on market research and growth rate of the new business. In this case we have “strategic cross roads”: Should Advaark gets into a new line of business, strategic consulting and services, or should it stay focused on its current business? But before answering we should stress on Advaark partners where each has his own opinion and skills. Partner 1: Is visionary and never content with status quo. His strategy is to move slowly into the market by developing a service for consumer products since he thinks: people need this business, Advaark need to change with time, Business line are blurring, making more by reducing cost of sale for existing clients and what if its competitors get into it? While Partner 2, has a sharp focus with operational skills. A strategy is to stay focusing in their competence, world class advertising agency, since strategic consulting and services is not their business, they have no expertise in opening a new business, they might loose their strategic focus, and failure will result in long term client relationship. In my opinion, a fundamental shift in business is necessary. The new line will add value, brand and relationship equity: retention or lock-in will occur. Besides, the dilemma is strategic and organizational and it is risky to…...

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