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Action Option C: You think that financial underperformance across the Group is the main issue. You ask Leena Chakrabati and Els Janssen will look at the individual businesses and whether WRSX is in fact disguising some poor performers that need to be turned around or divested from the WRSX portfolio of businesses. This might mean selling these businesses immediately or preparing them for sale in a year or two through a process of refocusing the management of these businesses on improved performance. Top management would need to see some personal benefit from preparing these businesses for sale in terms of bonus payments based on the sale price of the business. Management buy-outs may also be an option. Leena and Els should prepare a report for the Board on the pros and cons of more transparent financial reporting on the performance of individual businesses to major shareholders.

Action Option D: You believe that the growth in WRSX’s share price to date has been on target and you decide that you should not over react to what is only a rumour at this stage. You decide to brief the WRSX PR investor relations team to prepare a presentation which outlines the company’s successes to date based on the current strategy and make the point that this strategy holds the seeds for success in the future – and that this strategy should be adhered to by the Board.

Board Meeting Six Board Agenda item: Three

From: Aziz Kaf, Consumer Advertising, WRSX Paris Office To: Board Directors

Islamic marketing and the Muslim consumer

I was interested to read an article by Vohra, Bhalla and Chowdhury concerning the advertising world's lack of focus on the Muslim consumer. According to the article, Muslims are the majority in 50 countries in the world and a third of their population is under 14 as opposed to 18-20% in Western markets. The article described these young people as the consumers of the future and by example the global Halal food market was worth USD580 billion last year.

The main point of the article was that marketers and advertising agencies have a limited understanding of Muslim values and how they drive Muslim consumer behaviour. The article examines different groups according to beliefs, lifestyles and values and looks at their attitude to consumer products and Western brands.

While there is much debate about the rate of growth in the Muslim population and whether this will be sustained, or is in fact already reducing, it is approximated that if current trends continue, 40% of the world's population will at some stage be Muslim.

So, the question is whether we should develop specialist knowledge in Islamic marketing in the same way that banks have developed specialist services for Islamic banking.

I would like to bring this issue before the Board for discussion at the next Board Meeting if there is room on the agenda.

My proposal is a simple one: that WRSX should set up a unit that is specifically designed to look at how we can help our clients target the Muslim consumer around the world through an understanding of Muslim values.

The question is how differences in value systems may impact on consumer choices? Do Muslims have a negative attitude towards Western products and brands? Can one regard the followers of Islam as a cohesive, monolithic group of consumers from a marketing perspective? The study showed that this is not the case and that they identified five different segments based on values and attitudes as consumers. The size of these segments varies from 17 to 24%. These are the segments the authors came up with when looking at Muslims as consumers:

Religious Conservatives – do not approve of gender interaction New Age Muslims – Are religious but do not expect others to follow religious practices Societal Conformists – Believe that social norms should be adhered to Pragmatic Strivers – non-traditional and ambitious Liberals – broad-minded, independent and assertive

The question is, how can we help our clients with more accurate consumer targeting? Here are the options for the Board to consider:

Agenda Item Decision Options:

The Board has four Action Options:

Option A: Set up an Islamic Marketing business unit in a Muslim country, staffed by Muslims from a variety of backgrounds with different perspectives, from Religious Conservatives to Liberal. Ask this unit to undertake research on the Muslim market on behalf of clients and to create advertising and other marketing communications that are driven by Muslim values.

Option B: Ask Aziz to recruit one or two people into the Paris office who have developed an expertise in this area already and who can work with existing creative teams on behalf of clients. As this is a commercial venture, these recruits may or may not be Muslims themselves, with faith and culture not being criteria for recruitment, as it may be that non-Muslims would also have this expertise.

Option C: This issue is not so much about Islamic marketing as it is about targeting certain countries which happen to have large Muslim populations. In other words, WRSX should concentrate for example, on the values of the Indonesian consumer, values that may or may not be driven by faith. WRSX should appoint country experts and not experts in one religion or another.

Option D: This is a controversial issue that could be difficult for WRSX to manage when so many clients are perceived as having Western brands that may or may not be acceptable to certain groups depending on their religious beliefs. A team to target these brands at Muslim consumers is fraught with difficulties. Equally, the market for products or services that are specifically and uniquely designed to target the Muslim population is limited and not one that WRSX should focus on. Tell Aziz that for the time being nothing should be done but that WRSX will review this position at some stage in the future.

Board Meeting Six Board Agenda item: Four

From: Leena Chakrabati, Group Finance Director, WRSX London and Elsje Janssen, Finance Department, WRSX Group To: Board Directors

Opportunity for strategic review and to raise capital

The way finance is managed can be a key factor in our strategic success. Funding our strategic growth is an important issue. After a wide-ranging review in which we looked at all aspects of WRSX Group's business, we have identified the fact that we need to redefine our strategic plan and identify core and non-core businesses in terms of both our strategic plan and return to shareholders. Historically WRSX started out as an advertising agency and over the years we have integrated laterally – in terms of specialist media-driven advertising agencies – and vertically in terms of support services in the supplier chain.

The Group has grown substantially in size over the years and, as we have entered new market sectors, we have come up against competition and the need to manage all of our businesses efficiently for maximum shareholder return. Unfortunately, as we have now identified, some of our subsidiaries in the high competition sectors are under-performing in terms of the margins that we would like to see.

The Board believes that we need to regroup our financial resources so that we can continue to invest in high-margin areas. We have therefore highlighted three sectors which need to be put under the strategic spotlight to see whether they: a. still fit within our strategic plan and b. can be sold at a reasonable price

At this stage we can only sell off one business otherwise it might appear that we have lost our strategic way or that we are short of cash, so I am putting forward this agenda item which I am recommending is included in the Board meeting.

There may be some heated debate about which business we should let go in which sector – as I am sure that many of my fellow directors may feel that there are sectors which we should not withdraw from as we can manage these businesses efficiently and that they support the overall WRSX service proposition. However, they may be able to be sold at a premium price that will enable us to invest in other areas.

These are the options we have identified for the different reasons stated below. While it might appear to be a difficult choice, we still have the option to do nothing. However, it is our belief that we need to make a start on redefining our strategic direction and letting go of at least one company.

Agenda Item Decision Options:

The Board has four Action Options:

Option A: Sell FastTrak Mailings – the mail-handling business in New York. Strategic reason: Historically, this business was a start-up for the New York office many years ago when they won the largest US East Coast mail order catalogue company as a client. Now the Board questions whether this is a business in which WRSX should be investing. It is a downstream service and does not necessarily add to the overall WRSX New York brand reputation and it is not a service that we wish to enter in other markets worldwide. It is seen as 'old marketing'. It is also a service that we can buy-out from other suppliers as opposed to being locked into one supplier. Over the years, John Soares, who has been with the company almost from the beginning has done a terrific job of being client-focused and has grown the business to the third largest company in this sector by turnover on the US East Coast. It is in a very competitive marketplace.

Financial reason: FastTrak is in a very competitive marketplace where margins are always under scrutiny by clients wanting to shave a few cents off the price here and there, but the sheer volume means that the company is profitable. This means that we may be able to sell the business relatively easily.

Management reason: John Soares is getting close to retirement age and because of his strength in the job, succession management has not been in place. John has a brief to select and train his successor but this has not yet happened so the business could be entering a period of uncertainty.

Sale price: John Soares is an 18% shareholder in the FastTrak Mailings business and we believe that he would not be against putting the business on the market. The Board has also been told that Soares has been approached by the fourth largest mailing services competitor with a view to a possible buy-out, which would take the combined companies to the number one slot in terms of turnover on the US East Coast. We have estimated that the asking price should be £8m (USD 13m)

Option B: Sell the film production business – CineFX, located in Paris, London and New York. Strategic reason: The Board questions whether this is a business in which WRSX should be investing. It is a downstream service and does not necessarily add to the overall WRSX brand reputation in most markets. It is also a service that we can buy-out from many talented suppliers as opposed to being locked into one supplier. Also some clients see this relationship between WRSX Group and CineFX as conflict

of interest and they show resistance when we inform them that CineFX will be producing the commercials that the main agency has come up with. They question whether they are getting the best talent and value for their money.

Financial reason: While this company has been successful in the French market, it has limited success in entering other markets. It requires a heavy investment in terms of technology.

Management reason: Jean-Luc Breton has always been a creative maverick who has 'done his own thing' and he pays little attention to budgets – creative expression is all that is important to him, despite the recent incentive package offered to him.

Sale price: Having spoken to business brokers the strategy would be to play off an outside purchase against a management-buyout by the Jean-Luc Breton and his team. We have estimated that the start asking price should be £5m

Option C: Sell the WRSX Research & Insight businesses in London, Paris and New York. Strategic reason: Historically, research and insight used to be an integral part of the agency but over the years, as research has become more widely used by all clients and opportunities have arisen to create research products, like consumer panels, the research business has become a highly successful operation in its own right – not only servicing WRSX clients, but clients of other advertising agencies as well. In some ways it is a strategic 'jewel in the crown'. So why would we suggest that this may be one of the operations that we should consider selling? It is purely financial.

Financial reason: I am sure that there are many Board members who would say: We should never sell. However, the research & insight businesses are highly profitable and would realise a substantial amount of money. The question is, whether we could get better returns in our traditional media advertising businesses.

Management reason: There is no management reason for wanting to sell. Under the current management team, they remain a growing and highly profitable business.

Sale price: On a turnover of £4m and an operating margin of 12% across all WRSX research and insight businesses, we estimate that a realistic starting price would be £5m. Potential purchasers would be one of the three top publically-quoted international research networks based in the US, France or Germany.

Option D: You decide that there is no need for a strategic review, that the market would not take kindly to WRSX selling off one of its subsidiaries, and you decide to do nothing.

Board Meeting Six Board Agenda item: Five

From: Bradley Harris, New Business Director, WRSX London and Rod Cunningham, New Business Director, WRSX New York To: Board Directors

Making WRSX the agency of choice for Asian brands expanding globally

We have been approached by the number two automotive brand in India (in terms of number of cars sold) – Hindustan Automotive Limited (HAL) – with regards to their brand strategy and their plans to take the HAL brand into global markets. We have had an initial review meeting with their marketing team to look at the strategy they have currently been following with their range of cars. This is on a simple export basis, where they manufacture in India and have independent agents in the Middle East and Africa. Cars and vans are sold uniquely under the HAL brand. HAL has invested heavily in product development in recent years and has designed a fuel-efficient, eco-friendly low-cost 'people's car' – the EcoCar – which they believe not only has domestic market appeal among the emerging millions of Indian consumers and in other emerging Asian countries, but also has a potential global market.

The question that HAL wants help with is: Should it sell into Europe and the US under the HAL brand or should it be seeking to build or acquire a western brand (as other Asian automotive manufacturers have) in order to avoid consumer perception of Asian brands as cheap, lower quality, maybe unreliable. The business that WRSX is pitching for is to help HAL formulate and implement its global branding strategy. HAL is looking to WRSX Research & Insight to help them identify which markets to enter, WRSX Brand Identity to help with branding in these chosen markets, WRSX Audio Image to launch the car at local motor shows, and for the main agency to help with national advertising.

Over the next few years we expect to see many more opportunities to bid for brand strategy work from Asian businesses seeking new markets for their products. We believe that we should use the HAL experience as a strategic blueprint for making WRSX the agency of choice for Asian brands with global ambitions.

What does the Board consider a winning strategy for achieving this ambition?

There is currently much discussion about the role of brands in emerging markets, especially the BRICS countries (Brazil, Russia, India, China and South Africa) and many experts take the view that a low-cost production/low price strategy is not sustainable in the longer-term against a background of rising costs fuelled by higher wages. In these countries, consumers with rising living standards are beginning to differentiate between low-cost and value-added products and branding is integral to this.

Asian based companies have come to realise that branding is not only about succeeding in local markets, it is critical to going global. While emerging Asian nations such as India, China and Malaysia have recorded impressive growth in recent years, most often they have failed to build impressive brands. Only 8 Indian brands appear in the list of the world’s top 500 brands and, if you exclude Japan, only 44 brands across all Asian countries. HAL and other Asian brands will fail to achieve their global aspirations if they fail to build a brand strategy that conveys quality, innovation, safety and reiiability to consumers in their target markets.

Many Asian brands have the brand image of value-for-money based on a lower sales price and lower costs but wish to build a global brand based on value, quality and innovation in order to increase their price-points in order to maintain their margins against an inevitable rise in their cost-base in the future. Our research shows that for an Asian brand to overcome the brand image associated with most Asian products currently takes 10-15 years. Automotive brands must deliver on quality, innovation and create an emotional connection in order to succeed in Western countries.

The Hal account is huge – but it is a competitive situation – as HAL has also asked three other agencies to put forward their ideas. What WRSX can offer HAL is:

Knowledge of global market trends through our Market Insights business Long-term experience building brand awareness in the automotive sector Creative reputation for delivering memorable advertising Account management teams that work with clients to deliver to their specification, on-time and to budget

We feel that this is more than just a bid for a large account. It is a real opportunity for WRSX to position itself as the agency of choice for Asian brands with global ambitions in the future. The questions is how best to do this?

Agenda Item Decision Options:

The Board has four Action Options:

Option A: The key to this is industry sector experience and we should bring together our top automotive people from across the WRSX Group so that we demonstrate the strength of our team in brand strategy, market insights, creative, media buying etc. Our strategy should be to get the HAL account and this should be our one and only priority. We can plan a longer-term blueprint for successful bidding for Asian brands once we have secured this account. As three other agencies have been asked to present ideas, you have a one in four chance of winning the business. The cost of this pitch would be £0.3m.

Option B:

We need to think strategically about this “agency of choice” concept and the realities of making this happen. We think that we would have much more chance of success if we collaborated with the existing HAL agency in India which does not trade outside of India. While collaboration with a current or future competitor has its risks, we believe that their insider knowledge of “what makes HAL tick” would give us a competitive advantage when bidding for the HAL global business. We could use this collaborative approach as our blueprint for future Asian brand business. The cost of this will be £0.3m.

Option C: The New York office has a great deal of experience of selling US automotive brands into South America and we should use this experience with HAL. Why over-complicate this? The US produces more global brands than any other country and we should use their expertise in globalisation of FMCG brands, hi-tech brands, sportswear brands etc. and not involve other offices which increases costs and inevitably adds complexity. The cost of using the US team for HAL and as a blueprint for future business in the globalisation of Asian brands will be £0.2m.

Option D: All the big brands come out of the US and the EU and Japan and it will take many years before brands from other Asian countries are established globally. WRSX has limited resources and these can be better used working with clients from these countries and not the BRICS countries or other emerging markets. It’s all about financial returns and WRSX should not get into a competitive pitch for this business.

Board Meeting Six Board Agenda item: Six

From: Raphael Roux, CEO, WRSX Group and Rod Raoul Saurez, Non-Executive Director, WRSX Group To: Board Directors

The formulation and practice of strategy at WRSX

After a great deal of thought and taking on Board pressures to produce earnings growth for our shareholders, we have come to the conclusion that we need to change the way WRSX formulates and practices strategy. Up until now, the Chair and CEO have been seen as chief strategists, ultimately responsible for all strategic decisions, with WRSX Group executive directors in support.

We have the benefit of strategic advice from our non-executive directors, who see a wide range of business environments and are an invaluable help. They consult closely with the CEO on strategy, however, as they are part-time appointments, their ability to contribute substantially with strategy is limited.

The big question is who should be included in strategy? There are potentially a wide range of people who could be involved in any strategic issue or strategy formulation. In addition to the Chair, CEO, group executive and non-executive directors, there are strategic planners, strategy consultants, operating company managers – and perhaps even external stakeholders.

This issue has been discussed with our Chair, Juliette Waldron, and she is aware that we wanted to raise it as an issue and we request that this agenda item is included in your Board meeting.

There is also a practical side to asking the question: who should be involved in strategy formulation. As we know from our own experience, those with closest access to the Chair and CEO, i.e. the Group directors and non-executive directors have little responsibility for strategy implementation at an operational level and little knowledge of the cut and thrust of business on the ground in the same way as our middle managers do.

The paradox is that –under the current WRSX strategy formulation system –the operating company middle managers who have both the knowledge of implementation – and the responsibility – can often have the least access to the Chair and CEO in strategy discussions and decisions. This is because they are either too busy managing their businesses or because they are not seen as strategically objective.

Agenda Item Decision Options:

Action Option A: You believe that it is essential to change the way strategy is formulated and practiced and recommend a bi-annual strategic conference be held which would include: chair, CEO, executive and non-executive directors, all operating company heads from all worldwide operations. You believe that this is imperative irrespective of the cost – as the investment will be worthwhile in terms of increased shareholder value as strategy is implemented more effectively at a middle management level. You believe that a wider forum of involvement in the formulation and practice of strategy will be beneficial and that this break from the WRSX tradition of not involving operating company senior executives in this process must change. You think that the benefits will outweigh the difficulties and possible distractions from operations. You decide to brief WRSX's internal PR people to produce a Group-wide video cast to announce the first bi-annual conference to be held in the south of France in three months' time, the conference centre and all travel and hotel accommodation to be booked immediately.

Action Option B: You believe that objectivity is the most important factor and that outside strategic consultants – who see a wide range of businesses – can provide the most objective assessment of the WRSX strategy and value for shareholders. Consultants generally have mastery of analytical concepts and techniques and can be very rigorous in their analysis and recommendations for implementation. It is acknowledged that WRSX has never appointed consultants to this role before. The Board understands that consultancy of this kind is very expensive with an uncertain outcome – and that you would be relying on the reputation of the consultancy with no guarantees that the Board would implement any of their recommendations. However you are prepared to run with this option as you believe that the current way of formulating and practicing strategy is too 'inward-looking' and the Board cannot see the wood for the trees.

Action Option C: You believe that great benefits can be derived from the addition of a planning department to the current system. The thinking is that an internal planning department with an appointed Head of Strategic Planning, with a formal responsibility of contributing to the strategy process, will be able to work with the Board to provide: information and analysis, manage the strategy process and take on special projects as briefed by the Board. You therefore decide to authorise a budget for this function and department and begin the process to appoint the best qualified person within the next six months.

Action Option D: You are content that the current system of strategy formulation that has been in place since your appointment as a board director, works well and any change to this would be costly and time-consuming, with no guaranteed improvement in the value to shareholders, so you decide to keep the current system as it is.

__MACOSX/BM6/._BM6 Agenda details.pdf