World leader and the largest in the advertising and marketing corporation, WPP, has decided to cut its full year growth outlook forecast after the discovery that clients have cut on spending for advertising due to the economic crisis. http://online.wsj.com/article/SB10001424052970203897404578077941669547434.html?KEYWORDS=marketing
WPP has has looked into expanding into more international markets. Currently making more than two third sales in Latin America the Middle East, Central and Eastern Europe and Asia Pacific, WPP’s goal is to increase sales by forecasting for the next three and four years. However, their forecasting hasn’t been 100% accurate recently after showing that the markets in Brazil have slowed by 1.9% in their third quarter from 3.6%, sales in North America have dropped .4% and a 2.1% decline in Europe (Bender). In August, WPP ended up changing their forecasts of high expectations to lower growth expectations that advertising needs from clients would decrease, which ended up decrease particularly in the health care, call center and public affairs market. Even in their most popular time of client expectancy was at an all time low in September.
I believe that there have been many challenges for many companies to forecast the growth rates in the market with the current economic crisis which has set many companies back. Large companies such as Fannie Mae, GMC, Bank of America and many more major corporations primarily in the financial sector have had the greatest impact.
The question is, if forecasting isn’t providing a beneficial outlook for the future of a business, what else can businesses do to try to predict their future outlook within the market place? With the economies aggregate behavior of employment, output, and prices shifting since 2008, is cutting off the full year growth outlook such as WPP has decided to do, the best option?
The key issues that we have discussed in class have primarily focused on business development with the implementation of project management and the key factors of being successful as a company. For Netflix, the online streaming provider, has been facing a downfall in its subscribers after the subscription price increase and removal of its DVD by mail services. However, recently CEO, Reed Hastings, has been trying to improve Netflix by not only creating deals with its partner,CW Network and Weinstein Co, but he has also decided to expand their network with over 51 markets. Many of these ethical issues such as the cancelled subscriptions of many customers, have put pressure on Hastings and created a rising competition with other streaming services. Hastings is now trying to find a way to win more customers after the huge loss of over 800,000 subscribers. Hastings is also using the technique of forecasting by predicting the success of the company after the new projects have landed.
Hastings believes that by expanding over different markets and waiting for the fourth season of “Arrested Development” to come out, will help boost the companies overall success rate. However, I think that many other ideas need to be put in place. As being a Netflix subscriber myself, Netflix has many other things to take under consideration such as the quality of the videos or the selection of TV shows or movies available. Simply waiting and hoping for the new season of “Arrested Development” to become available to hopefully boost up the amount of subscribers is not a strong enough technique to have effective project management decisions. However, expanding Netflix to different countries was a very smart idea for Hastings to do. Hastings went out and broke down the structure of where Netflix was lacking based on customer expectations and is implementing different strategies to help increase revenue and bring back old subscribers. This is a very important part of understanding the correct procedures needed to be a successful project manager. Lets just hope that these decisions will help Netflix’s success in the future and continue to beat out the over priced video providers such as “red box”.