Essay About Option A And High Upside Potential

Market Opportunity in China
Board Meeting 1Agenda item 1: Market opportunity in China Reason:It is clearly stated that China have high upside potential. It is expected to become the second largest advertising market within the next three years. Option A: Open a new office in ShanghaiHighest investment, howeverIn the long term it will outweigh the costsHigh potential in ChinaOwn department (not sharing profits as in Option C)Upside potential is higher in comparison with Option CAble to opt-out after three year, howeverWRSX has already experience with starting a new department (in Singapore)Recruit local experienced staff This will fill the culture gap between WRSX and China. Those people could have alreay relationsips with potential clients and experienced with setting up relationships with local suppliers and sub-contractors. In Shanghai will there be a larger talent pool than in lower tier cities. Altough the growth is more in the lower tier cities, the value of the market will be still large. Option B: Set up small offices based in ons of China’s tertiary cities. Expansion into a second city should be planned within 12 months. Assessing opportunities for WRSX in the Chinese marketIs already done by previous reports, that mention the significant potential of ChinaWithin tertiary cities it will be more difficult to find talentsCheap investment in comparison with Option A. However, we need to create maximum shareholder value in three years. The faster we can profit from the Chinese market growth the better.Option C: Create a strategic alliance with a Chinese agency.Benefit from the knowledge of the Chinese market creating a strategic alliance with a Chinese agency. However, you need to share the profitsRelative low investmentUpside Risks involved with the strategic allianceThe succes of the strategic alliance is also in the hands of the Chinese agencyStrategic and cultural fit could fail. Option D: Do nothing.Clearly the least suitable option, because of the growth potential of the Chinese market.Agenda item 4Non-Performing Business within the GroupOption BThe company can become active in a conference and events management worth £100bn. The conference and events management business could make a profit if the exhibition business was disposed of. The major overheads for the business are the exhibition stand manufacturing site and storage unit in Ling Industrial Park in Singapore and the equipment for making the stands.In the business plan we state that we want to look for opportunities in the growing segments, and because the Asia-pacific market is growing fast, we do not want to leave completelyThe fixed costs of the event management division can be reduced with bringing it under another part of the business. Because of the chosen other options in the agenda items we cannot endlessly spend money. Agenda item 5Cultural change in New YorkThe largest office within the WRSX group has a problem with its culture: hierarchical nature.