Strategic management help on: “CREATURE – For all those who want to try a PINCH OF INNOVATION”
1. About the Advertising Agency:
The advertising agency start up by Lucy & Rob will be innovative by using social networking technologies and online communities to co-create and pre-test advertising campaigns for global clients. Both Lucy and Rob believe that social networking technologies and online communities offer a lot of potential with respect to understanding the preferences of niche market segments.
The report takes into consideration the various aspects which shall be kept in mind by Lucy & Rob in order to make their advertising agency a success. Some of the key points are target market, market segmentation, value proposition (taking into consideration the co-creation process), business model for the advertising agency (osterwalder’s business model/canvas) & the recommendations.
1.1 Target market:
Target market refers to the foremost aspect which shall be taken into consideration while starting up any venture. Lucy & Rob shall keep in mind the two things i.e. who their customers are & who are those customers who will consider their advertising agency. Fair marketing, pricing as well as product shall be made by the same in order to make the agency successful. The major target audience for this agency would be all the global clients who wish to go for an advertising campaign in order to establish their brands in different parts of the globe (Parker, 2010). The target market selected by Lucy & Rob would be the Niche or the concentration marketing. This type of target market would act successful in case of small ventures as they are not bound to respond to the larger audience.
1.2 Market Segmentation
The second aspect which shall be taken into consideration would refer to the segmentation of the market. The market segmentation in case of this agency shall be based upon the interest of the customers. A good understanding regarding the demographics of the target market shall be done. Some of the categories which shall be kept in mind would be age, income level, ethnic background, life cycle of the product, etc.
It must be kept in mind; such an innovative measure would be attached along various types of influence factors. There would be various influencing factors which would attract the target audience to take up this service & add to the advertising campaigns. Some of the factors which might affect the customers would be either the internal or external factors.
2. Value proposition:
Lucy & Rob will position them in the market as a company which will be innovative by using the different social networking technologies and online communities to co-create and pre-test advertising campaigns for global clients. The advertising agency start up has been brought up for the Niche market segments as they do not cater to the large market segments.
The beliefs and values that are shared by the company is the aim to create a platform to connect people around the world who have the same enthusiasm for advertising campaigns. The existence of similarity of goals and passion will encourage members to share their common interest and be more active in a social online community (Parker, 2010). Whereas other website only provides the way with which the advertising campaign is to be made. The newly launched advertising website refers to a medium for all those global clients who would love to express their mind as well as add a pinch of creativity in their advertisements.
3. Co-creation process:
Co – creation process is also known as collaboration. Co-creation refers to a process which would help in order to solve the issues or problems from various perspectives as well as approaches. This type of a process would help in order to collaborate the customer along with the clients in order to define as well as create range of output (Osterwalder, Pigneur & Smith, 2010).
This process would be quite helpful for Lucy & Rob to work with the experts in their own manner as well as guiding them in generating new applications over the web. With the help of the co-creation process the two parties such i.e. the expert & consumers would be treated equal & partner in the entire process. 
The co-creation process would take into consideration the following four steps i.e.
Þ Exploration & Crowd Sourcing: With the help of exploration process, Creature would be able to scan thru the public social networking sites & derive insights regarding the services Creature provides. Crowd sourcing refers to a phase which involves exploration of the various communities as well as the issues in depth manner (Weil, Malone, D’urso & Herman, 2005).
Þ Co-create: The co-create helps in order to provide an outline which would help in order to maintain close bindings between the professionals & the clients. In this phase, creative thinking would be practiced which would help to turn out to be “creative thinkers”.
Þ Validation: The last phase refers to the validation phases which takes into consideration co-creation of the outputs & get exposed to the relevant concepts. Co-creation has been referred to as one of the most valuable aspects at Creature. The co-creation process would act helpful in case of evolving communications. This process would help Creature to maintain balance between the tangible benefits & effect the research and development in order to make the agencies more creative (Parker, 2010).
4. Business model for the Advertising Agency
The business model which shall be followed by the advertising agency is the Osterwalder’s business model. This model is also known as “The Business Model Canvas”. The business model canvas has been referred to as a tool in strategic management which would help in order to develop various business models. This type of a business model refers to a visual chart which would describe the value proposition for the business as a whole, customers, infrastructure & finances. This type of a model helps in order to align all the activities as well as illustrate tradeoffs.
(Source: Osterwalder, Pigneur & Smith, 2010)
The entire concept of this advertising agency could be seen with the help of the business model canvas. The main components which have been described in this business model or canvas have been highlighted as follows:
Þ Infrastructure
i. Key activities: The most important activity which shall be kept in mind by Lucy & Rob is to define the advertising agency’s value proposition. For example in case of the advertising agency i.e. The Creature, the value proposition would be to join hands with two or more people to create something new or innovative in terms of the advertising campaigns.
ii. Key resources: The key resources required by The Creature would be innovative personnel who can think of novel ideas in order to attract more number of clients from all across the globe. Proper financial resources in order to give the best quality of work to its clients (Williams, 2004).
iii. Partner network: Creature has made strategic alliances in order to provide the most innovative advertising campaign to its global clients.
Þ Customers
i. Segmentation: The market segmentation has been done by Creature on the basis of concentrated or niche markets. Customers have been differentiated on the basis of age, culture, ethnic backgrounds, etc.
ii. Channels: The channels which shall be kept in mind while undergoing this venture would be with the help of the various social mediums such as internet portals, social networking sites, etc (Weil, Malone, D’urso & Herman, 2005).
iii. Relationship with the customers: In order to have high levels of success in the venture, Creature shall be able to identify the kind of relationship they want to maintain with their customers. Since, this agency’s main aim is to provide advertising campaigns therefore co-creation should be practiced. A personal relationship shall be maintained with the clients who would help to come out with a better output.
Þ Offerings
i. Value proposition: The beliefs and values that are shared by the company is the aim to create a platform to connect people around the world who have the same enthusiasm for advertising campaigns. The existence of similarity of goals and passion will encourage members to share their common interest and be more active in a social online community (Osterwalder, Pigneur & Smith, 2010). Whereas other website only provides the way with which the advertising campaign is to be made. The newly launched advertising website refers to a medium for all those global clients who would love to express their mind as well as add a pinch of creativity in their advertisements.
Þ Finances
- i. Cost Structure: In the initial phase, Creature would be termed as a cost driven in nature. In this business model, major focus would be upon the cost rather than the value provided by the same. After a certain point, this advertising agency would turn its focus from cost to value provided to its clients (Parker, 2010).
ii. Characteristics of cost structure: Some of the fixed costs which would be attached with Creature would be the rent of the place where the activities are undertaken, salary to the people hired in order to provide backhand help while constructing the advertising campaign (Afuah, 2009).
Þ Revenue streams: The way with which the agency would make money would be in the following manner. They are as under:
° Usage Fees
° Advertising
° Brokerage Fees
° Subscription Fees
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