Internal environmental factors
Financial Resources: WPP has very strong financial fundamentals. This is obvious from the financial statements of the company for the year 2005. Till date the year 2006 has proved to be even better for the group. Briefly: • Revenues up by 25% stood at 5. 4 billion Pounds • Operating margins up by 1% reached 14% • Head Line profit before tax – up over 36% to 669million Pounds • Shareowner return improved with share prices going up by 10% to 629. 0p • Cash flow of over $1billion per annum
Half yearly results of 2006 reported that company had free cash available for working capital requirements, debt repayment, acquisitions and share repurchases. The interim dividend was increased by 20% and company repurchased its 24 million ordinary shares in first half of 2006. This financial strength had enabled the company to make small and medium sized acquisitions or investments in high growth geographical or functional areas. As a matter of fact, WPP board had been examining ways of deploying the Group’s substantial surplus cash flow to enhance shareowner value.
WPP is included in the Dow Jones Sustainability Index and the FTSE4Good Index. Organizational Resources: Looking at the most important assets for any organization, WPP stands at a very high podium. Men, Machine and Money; WPP has all of them. WPP is a truly global group with over 2000 offices in 106 countries with 92,000 peoples working with the group. The company has employed latest IT technology to ensure integration among various offices. While the group is a cash rich group and network of clients and offices spanning the continents, the creative manpower of the group remains the biggest asset.
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WPP’s Corporate Responsibility Policy and Code of Business Conduct provide guidance to entire team on a wide range of ethical, social and environmental subjects. The group has established an initial set of Key Performance Indicators in the Corporate Responsibility Reports. Many professionals from within WPP companies play an important part in developing and revising industry code in sensitive areas such as advertising to children and the marketing of food and pharmaceutical products.
Physical and Technological Resources:
The group has land, buildings and lease financed property worth over 423million pounds across the globe. The group has made big investments in IT and communication infrastructure also. Convergence of transmission of electronic data, Internet, wireless, IP and traditional voice telephony have helped the company to standardize its approach to technology at least at regional level. More than $1billion of the group revenue comes from market research. By employing latest web technologies, WPP has made the research process lightening fast.
The group can interrogate more than 17 million consumers globally and can deliver answers with in 24 hours. With such a large setup at disposal, WPP is well placed to take on competition and global clients in any part of the world. Intangible Resources: Goodwill and Reputation WPP group companies enjoy huge goodwill and reputation in the industry, among clients and other stakeholders. The group has Super brands in the bouquet of owned companies.
Grey Global, Ogilvy & Mather, J.Walter Thompson, Young & Rubicam, Bates Asia, Group M, MediaCom, Mediaedge:cia, MindShare, The Kantar Group, Hill & Knowlton, B to D group, Specialist communication are some of the jewels in WPP’s crown. These brand names enjoy massive goodwill and reputation for their professional standards. The group services over 300 of the Fortune 500 companies, over one half of the Nasdaq 100, over 30 of the Fortune e-50 and approximately 390 national and multinational clients in three or more disciplines.
Nearly 220 clients work with WPP in six or more countries. Corporate responsibility has been one of the important aspects in WPP’s business outlook. Company has ensured compliance of marketing ethics, protection of consumer privacy, diversity and equal opportunities in employment, business ethics, health and safety. Social investments include pro bono work, charity donations and employee volunteering.