BUSINESS COMMUNICATION-GROUP B5
MACPHIE AND COMPANY: THE GROWTH IMPERATIVE
SITUATION ANALYSIS MacPhie, which was founded in 2004, despite being financially
successful in the last few years was unable to grow in the
market.
 The consultancy industry in Canada was suffering and facing a
stunned growth post 2008 global financial crisis.(0.9%) annual
growth rate.
 Majority of the firms in the consultancy industry were minor
with up to 5 employees.
 The consultancy industry in Canada failed to distinguish
between strategic planning and communication planning. They
keep overlapping based on client needs.
 This overlapping of the planning made it difficult for the
industry to analyze market size or growth of each planning
individually.
 This overlapping also made it difficult for the hiring companies
to identify the core competitors as the firm were providing
both communication as well as strategically planning.
 It was hard to ascertain the competitive firms or their
categories as MacPhie was providing a large scale of services.
 The changes in external economic environment by way of
global financial crisis in 2008 shrinking MacPhie from 5
members organization to two-person organization despite the
company was having good financial health in previous years.
 Cutting off the two senior associates who use to serve as client
facing leads was a blow for the leadership of the company.
 The shrinkage of the company left Hugh to invest more time in
existing firms and working as a client facing leader, this further
reduced his scope into developing new business.
 The company failed to incorporate and hire permanently
specialized consultancy men from competitive firms which it
used to hire to satisfy workflow requirements.
 The vision and mission of the company and the employee
working were not on the same page.
 Employee retention was a big problem such that it was only
MacPhie himself who was the only person who stayed and
work for the company for more than 5 years. Other employees
found it hard to match their needs with the company goal and
vision.
 An unclear promotion and compensation policy which relied on
Hugh`s discretion, for the employees was also a reason behind
them walking out of the organization after cultivating
specialized skills.
 There were lack of plans and offerings to employees like
pension plan to retain them for a long term in MacPhie.
 MacPhie were not the lowest cost provider because of the
customized customer services they provided to the clients
rather than offering a one-size-fit-all solution.
 MacPhie found it hard to approach new relations with
prospective clients via request for proposals because of highly
competitive process in the industry. They didn’t win a single
project via official RFPs unless there is direct invitation to bid.
 Lack of value propositions brought to clients was not evident in
company written proposal but the same was evident in person
approach.
 The company never used a heavy promotion or advertisement
to promote and diversify their work.
PROBLEM ANALYSIS
 MacPhie’s stress was mainly on profit maximization and did not
efficiently plan on creating client base or goodwill creation or
growth which would have ultimately led to profitable
organization. Not focusing on growth, due to which the
company struggled to get beyond the adolescence phase.
 MacPhie set achievable goals for the firm but was not able to
define them or did not do a strategic planning as to achieve the
goals of the firm.
 The pre financial crisis era was great for MacPhie as it achieved
gross revenues which were nearly double his projection of
profits and was not able to create a strategic plan to achieve
firm’s goals post the period of 2008 financial crisis. The
competitors which included consulting firms such as Accenture,
Delloitte and Mckinsey were able to easily capture the
consulting market share as they responded quickly by the way
of innovation.
 MacPhie had entered into multiple dimensions of consulting
business like – clients corporate communication, speech
writing, project management, issues management, and joint
client projects like advertising, public relations and public
affairs due to which, initially, it was difficult to define MacPhie’s
competitive environment given the diversity of engagements
and this was important as the firms competed on multiple
elements such as staff abilities, experience and relationships.
 Hugh MacPhie was unable to identify the competitor which
posed the strongest threat.
 Hugh MacPhie did not have the time for developing new
business because he had to spend a lot of time on client facing
roles due to low expertise that his other employees possessed
in this area and a flat organizational structure.
 Employee turnover was terrible – most of the employees who
joined the company were seeing leaving the company because
either they could not align their goals with Hugh’s goals or were
not interested in developing long term commitment to the firm
due to an informal compensation policy – similar bonus
structure for employees at different levels, no employee’s
pension plan.
 It took several years for the new joiners to develop the varied
skills required for working on diverse range of clients and
projects.
 Used similar approach for clients from different sectors.
Decision Analysis
There are various alternatives that are available to MacPhie to
handle their current situation and overcome their problems are:
1. Customer/Client Pyramid Model:
This is the most common
observation of the
Pareto Principle. It’s
pretty easy to find out
whether or not it holds
true for our business. If
we find that the bulk of
our profits comes from
around 20% of our
buyers, then make sure we’re working hard to retain those
customers and treating them well. This model aims at maintaining
a customer base that provide the firm with majority of its
revenue, MacPhie had been aiming at maximization of profit
rather than gaining clients who are regular customers.
2. BCG Matrix: As MacPhie had to
grow to 20 employees by 2020
which means a small firm in the
concerned business of
consultancy, as per the number
of employees. The company
has low market share and low
growth rate at the current
working scenario that makes
them fall under the quadrant of
dogs, which represents the low
market share and low growth markets. Hugh MacPhie aimed at
growing the size of the company and but operate in a market
which have low growth because of the big players like
Mckinsey, Delloitte and Accenture which restrict others growth.
The company will now fall in questions marks.
3. Porter’s Five Force Model: The Porter’s Five Force model is a
framework for analysing the company’s competitive
environment. And in this case, it is an action that could help
MacPhie not just in
earning profits but also
growing in the market.
This model was helpful in
analysing the factors and
working on it to help
improve the company’s
growth in the market. The
factors include industry
competitors, potential of new entrants in the industry, power
of suppliers, power of consumers, threats of substitutes.
4. Job Coupling Model: Jobcoupling is the socialized
factor of cognitive scenes in
which employees interact
with the organizational
network. job coupling can
lead to job satisfaction and organization commitment.
Therefore, job coupling is a decisive factor to the formation of
job attitude model. This model can thus lead to less turnover of
the employees in the company by catering to the needs of the
employees.
Plan of Action
The Porter’s Five Force model is a framework for
analysing the company’s competitive environment.
And in this case, it is an action that could help
MacPhie not just in earning profits but also growing
in the market. This model was helpful in analysing
the factors and working on it to help improve the
company’s growth in the market. The factors are as
follows:
1. Industry Competitors - The first aspect to analyse is the
amount of competition MacPhie was facing. Think both
on a macro and micro scale about the number of direct
competitors they had in their industry and the services
they offer in comparison to others.
 . Focus on research and development to identify
market niche as well as to be able to add
differentiating factors to its services. This will increase
its shield against influence from competitive forces and
their actions.
 Focus on capturing new markets – in the same region
as well as new regions to avoid saturation of resources
in one market only.
2. Potential of new entrants in the industry - new
entrants to an industry bring new potential and a
choice to increase the market share and overall share
of the pie that puts pressure on price, costs, and the
investment price essential to compete. The threat of
new entry is based on how secure your company is
from being surrounded by competitors Build and invest
in marketing to distinctly establish a point of
differentiation in customer perception as well as
strengthen customer loyalty. Focus on delivering
consistently high quality.
 Invest in research and development to make sure that
it continues to have competitive differentiation from
other players at all times.
3. Power of suppliers- Supplier power refers to the power
that is held by the suppliers in terms of pricing of the
raw materials and inputs used for the business. The
greater the number of suppliers available to you, the
easier it is to switch to a cheaper alternative. If there
are few suppliers you can work with, such as when you
sell services made with highly specific content, the
greater the control they have over your company. This
actually helps in accessing:
i) How many suppliers are there in the market?
ii) Are there many options or just a few?
iii) How easy is it to switch?
iv)How
would
changing
suppliers
affect
the
products/services?
In this case Hugh as well as his employees were the
suppliers for their business as they used their own
skills and expertise to provide content for speeches,
conduct research as well as demonstrated social
skills for communication. MacPhie had no external
suppliers. So, in this case it was very important for
Hugh to keep his employees in a good state of mind.
Get contracts with multiple suppliers and get resources,
content material from them accordingly.
4. Power of consumers- The buyer for MacPhie Company
is not necessarily the group that used its services– but
rather refers to the group of customers that purchases
the services from MacPhie Company to either
distribute further, retail it, or even consume it. This
was an important factor in the long run of the business.
 MacPhie Company can focus on differentiating its
services and increasing its demand with the end
consumers through different marketing tactics, this will
increase the demand of the services with different
buyers, and will work towards moderating buyer
power.
 MacPhie Company should offer services at moderate
prices to buyers, it will again be able to attract a large
number of buyers for its product, and in this way, will
be able to break off the high bargaining power.
 Paid advertisements to promote his company.
 Expand his client network and not just stick to few
clients throughout his life.
5. Threats of Substitutes- There are always different
alternatives or substitutes for various products or
services that lead an industry. This refers to the
possibility that customers will find a different way of
doing what your company does. You may have
originally conceived products or services that help
customers, but as technology changes over time, so do
the desires and problems of customers. Therefore, it is
always
essential
to
examine
how
company’s
customer’s lives have changed as the company has
grown.
 Focus on delivering consistently high quality.
 Focus
on
maintaining
strong
consumer
relationships.
 Integrate strategic marketing to form an emotional
connection with the consumers and strengthen
consumer loyalty.
 Invest in pop up stores owned by the company to
stock the MacPhie Company The brand exclusively,
and integrate it with brand characteristics and
personality to attract consumers.
So, attaining these steps will give McPhee an edge
over other competitors and will also create a huge
client base that can help the company not just
maintain a healthy financial position but also grow
and prosper in the market environment.
SWOT ANALYSIS:
Using
Strengths
to
Take
Advantage
of
Opportunities
Large amounts of R&D spending, as well as mergers
and acquisitions, should be used by businesses to
present more innovative products. It has the
potential to improve Business's market share as well
as the company's revenue margins. It could also give
Business a long-term competitive advantage over its
rivals.
The international expansion of a business should be
focused on capturing new country markets through
expansion and attracting additional clients through
client loyalty. Because emerging countries have a
larger population than industrialized ones, it is
possible that the business consumer circle will
expand.
Strategies for Overcoming Weaknesses and Taking
Advantage of Opportunities
Swot Analysis is a method of analyzing the strengths
and weaknesses
Company MacPhie should be cautious in its
company acquisitions and mergers, as this could
have an impact on customers' and society's
perceptions of business. It should seek out and
merge with companies that have a strong market
reputation for running a healthy and profitable
business. It would help customers gain a better
knowledge of business.
Instead of focusing on R&D expenditure over cost
analysis of various healthy things, businesses should
focus on R&D spending over cost analysis of various
healthy
items.
This
would
boost
the
cost-
effectiveness of its commodities, resulting in a rise in
sales.
Strategies for overcoming risks by leveraging strengths
Business must expand not only in developing countries,
but also in developed countries. It needs to broaden its
geographical scope. This broad geographic expansion
toward developing and established countries would
reduce the danger of potential losses during periods of
instability in various countries. It must grow its sphere of
influence to a large number of countries, similar to
Unilever, which operates in over 170 countries.
Strategies for overcoming flaws and avoiding threats
It should seek out and merge with countries that have a
reputation for being a healthy corporation in the
market. It would also allow the company to focus its
resources on other businesses rather than acquiring
those companies, which would hinder the development
of the NHW approach.
KEY TAKEAWAYS:
 It is always important for a business to plan for long term
and not just restrict itself to short term benefits.
 Short term lookout will just give profitability but long
term aspect will help the business grow and we all know
that growth ultimately is the key to profit and ling term
success.
 A constant internal analysis is very important for a
company to know about its own strengths, weaknesses,
opportunities and threats.
 There should always be an alignment between the
employees and company goals.
 Should have a balanced approach toward all the aspects
of the business.