Babson Case Number: BAB115 | Length: 28 Pages

Abstract

Impact Marketing & Communications and the associated industry note, The Regional Advertising Industry (New England), describe a small (23 employees) and profitable advertising agency and the surrounding pattern of industry forces. The agency is interesting strategically because of its exclusive focus on high technology clients, and its distinctive organizational arrangements for serving its clients needs. Perhaps more important, however, is the culmination of a complex pattern of changes in the advertising industry itself.

An Epilogue, included as an addendum to the teaching note, describes how Impact Marketing & Communications did, indeed, get hot and then “melted down” more than ten years later. Reviewing the success and ultimate failure of this company over a long time frame illustrates the repeated need for creative transformation in an industry such as advertising. This case suggests a deeper lesson that each transformation should focus on yet higher value interpretations of opportunities within the market segment. Each time the need was to differentiate more tightly with more refined and powerful concepts. Lastly, the epilogue demonstrates the fragility of success in this industry as the company fails completely as soon as she takes her hands off the reins.

Use of the Case
This case and industry note are suitable for courses in strategic management, small business, service industries, and strategic marketing. It is primarily designed for the early part of such courses. The material is relatively distinctive, partly because of its focus on a small business, on a service (advertising) business, and on a regional industry. It is unusual, however, in the comprehensiveness of its perspective, embracing organizational and other issues within a large strategic management frame.

Teaching Objectives for the Case
Some of the objectives the case study can help to meet in a course are:
1. Introduction and an early example of the concept of strategy and the concepts of industry analysis
2. Practice in (a) industry analysis, (b) strategy identification, (c) strategic position analysis, and (d) exploring and choosing among strategic alternatives
3. The characteristics of a small, service business
4. The properties of a “niche strategy” or tight differentiation towards a well defined, high value market segment
5. The implications of a regional, single market, multiple product strategic scope
6. The identification of points of industry transition and how a strategy can be formulated to deal with such a transition
7. Organizational, personnel, and other “implementation” issues
8. Industry structures, forces, and evolution, particularly according to regional influences
9. Using the epilogue reveals patterns of transformation over time and then folds the company and its leaders into the cycle of their life