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Date Submitted: 09/15/2012 09:54 AM

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Saatchi & Saatchi

Saatchi is a small, London based advertisement company with humble beginnings that has enjoyed rapid growth and financial success for over twenty years. However, the company found itself in dire financial difficulties in the mid 1990’s. The company, which was founded by the Saatchi brothers in 1970, quickly established a presence in the advertisement business. From the get go the company set itself apart from their competitors and quickly rose as one of the best advertisement companies in the United Kingdom. With frantic growth through acquisitions and mergers, the company catapulted itself into one of the most prominent advertisement firms in the world. The company acquisitions frenzy continued throughout the 1980’s, making a permanent presence in the United States; culminating with acquisitions of 13 firms in 1985 and the purchase of the ad agency Ted Bates Worldwide for $450 million in 1986.

The practice of huge investment anticipation, a big pay day in my opinion, is what started the company into a downward spiral. The company overextended itself by buying too much too fast. It poured millions into acquisitions, not anticipating the recession in the early 90’s, and by 1995 the company was looking at bankruptcy. The company’s internal dynamics were another factor that I believe compounded the company’s financial problems. I believe that in order for an organization to be successful it requires purpose, direction and motivation and this was not the case with Saatchi & Saatchi. Satellite branches had no direction and no concern for the big picture or the success of the company as a whole. Many branches were just worried about their lane and what was in front of them; everyone was working on their own agenda.

After a strategy reformulation and new leadership that led to the ousting of the Saatchi brothers, as well as the de-merging from Cordiant Communications, the future looked a bit brighter for the company. The new company...