S&S Company


Saatchi & Saatchi Worldwide: Globalization and Diversification


  1. (a) Why did Saatchi & Saatchi decline?
(b) What would you have done differently at Saatchi & Saatchi to avoid the downturn at end of the 80s?

  a) Saatchi & Saatchi (S&S) Worldwide Company, which mainly services range from
market strategy, communication and forecasting, was founded in 1970 and soon built up for its neoteric ideas and business patterns. During the very early years of the company’s operation, the company managed its items and developed as well as other rising companies. According to the Firm Lifecycle Theory, enterprises may have to experience 10 phases including Courtship, Infancy, Go-Go, Adolescence, Prime, Maturity, Aristocracy, Early Bureaucracy, Bureaucracy and Death (Adize 1979). Judging by the performances that the Saatchi & Saatchi Company displayed, the company was getting though the first 3 stages. However, like every young child, the company needs some frustrations to be maturity. As seen from the case, the development degree of S&S Company drastically shrank after 1986. There must be some reasons which led to this result existed behind the recessionary phenomenon.

Specifically in this case, the main reasons might belong to 4 categories which are Financing, Client, Acquisitions, and People & Cultures. It has brought plenty of benefits such as expansion of operating scale, shares of the market and the influences in the area by purchasing Bates in 1986. Nevertheless it turned to be the direct affair that triggered the decline of the S&S Company’s profit.

From the perspective of Client, because of the purchase, a series of client account has been lost. Moreover, the confidences the clients hold were facing with testing caused by the development of new market. Especially in the United States (US), some clients terminated cooperation with S&S because of the huge...