Case Study: Stick to the Core – or Go for More?

Q: Should Advaark stick to its core competence?

To answer the question we first have to look at the current business they do:

As a big advertising company with almost 400 employees they are not just a fish in the tank. Advaark is a company where new creative heads want to work and contribute to a growing empire

The opposite minds of the two co-founders Ian Rafferty and George Caldwell don’t seem to agree to difficult decisions without clearly thinking about it. I think they really do trust each other but are also complete different. Rafferty is kind of a visionary and thinks that if you don't go forward, you go backwards. He is truly convinced that people will need this kind of business and that there is a huge market waiting just to be entered. He is also concerned that other companies or even competitors will get into the market. On the other hand there is Caldwell whose argument is, that it isn’t the business or the focus of Akvaark and therefore they could lose their strategic focus. He also mentions that Advaark doesn’t have any expertise in opening new markets and that’s why they should focus on their own business.

Rafferty thinks that they should into one-stop shopping and that the business lines are blurring sooner or later. He is convinced that they should change with the time and slowly move into the market by developing a service for consumer products. Caldwell’s however, fears a failure because they know nothing about this business and that this will result in a loss of long term clients and a loss in reputation. He wants to stay focus on their core competence which is world-class advertising.

The second look goes to the risks of going into the market:

The first big risk is strategic and organizational. This problem is a risk to a possible alienation between the partners. But the abilities of Rafferty and his effort into new things (e.g. the report he gave to Caldwell after one week, which was really good) is a huge plus. This minimizes the most...