Saatchi & Saatchi for Much of Its

Saatchi & Saatchi For much of its history, Saatchi & Saatchi was one of the leading and most innovative advertising firms in the world. But despite its great success in the 1970s and 80s, a series of commercial setbacks led the company to a state of near-bankruptcy. Financially, the company pledged to grow its revenue base faster than the market and convert 30% of that incremental revenue to operating profit, doubling its earnings per share.

From a customer perspective, the company also vowed to create a more coherent 'branding' of the once-heralded creative Saatchi image, which had grown diluted in the wake of its dispersed, globalized status. The company divided its different agencies into three categories: lead, drive, and prosper. Agencies that were characterized as 'prosper' were successful, small agencies with limited potential for growth. These agencies were not expected to expand, but were given the goal of achieving high margins upon the work they did contract.

A middle-sized 'drive' agency was supposed to maintain or slightly increase their revenue base along with growing their margin. The company invested most of its energies into 'lead' agencies in major metropolitan locations in the UK, New York and China. The agency invested most of its efforts into these locations because high margins and high levels of growth were expected. A new strategy was also adapted to its clients, once it was determined that 20-30% of Saatchi & Saatchi's client base made up 70-80% of its revenues.

To grow its bottom line, the company decided to focus upon such 'Permanently Infatuated Clients' (PIC)s at all of its agencies. All agencies were also charged with the responsibility of creating big fabulous ideas (BFIs) for its PICs. Conclusion The financial strategies do make sense for each unit. The prosper agencies did not have the manpower to handle more clients, so they were charged with achieving high margins. However, the large 'lead' agencies did have the ability to generate higher margins and also grow the client base.

However, the acquisition by Publicis Groupe SA means that the coherent vision, communication, planning and index setting of the BSC must be translated into the newly-merged organization. The new organization must be in the same kind of harmony as the old. Evaluation There seems to be a fundamental contradiction between the customer perspective strategies meshed and the company's financial strategies.

All three agency types are charged with the mission of cultivating large clients and 'big' ideas, but the smaller and mid-sized agencies may not be able to handle such large clients, and are better-suited to focusing on smaller work. The strategy to focus upon large clients rather than a wider client base.