July 31, 2013
Considering the businesses of today and the merger and acquisition proposition is leading to the confluence or aggregation of prime services and the big store operations. The Omnicom and Publicis merging is a power play that left Wallstreet spinning and led to the “Omnicom, Publicis To Combine Into Biggest Ad Firm” that as in the Walmart model can lead to small boutique shop demise.
The culture integration of the French, Publicis SA and U.S. Omnicon Group was “designed to bolster the companies’ focus on growing Asian and Latin American markets such as China and Brazil, where they each have ramped up operations to counter lackluster growth in weak European markets.”
The new company called, Publicis Omnicom Group deal is valued at $35 billion to be ran by both current CEO’s, “Omnicom CEO John Wren and Publicis CEO Maurice Levy as co-chief executives,” reports NPR.
The merger has placed competitive bigs under one management solution. The enterprise may have fall out but lead to a constructed assimilated process that mimics advertising as an algorithm versus varied creatives producing multi-ad forms.
“combined firm will allow for more pricing power in general, the decrease in competition could present regulatory hurdles in the U.S. and Europe. Client conflicts also could be an issue, as rivals such as Coca-Cola Co., PepsiCo, McDonald’s, Yum Brands’ Taco Bell, Johnson & Johnson and Procter & Gamble now find themselves under the same umbrella.”
The merger was stated to produce a “cost savings of $500 million”. The combined resources of both companies can lead to uniformity and less innovation. Competition increase quality, leanness and continuous improvement. When the bigs have no competition what is the incentive to innovate and produce savings. The skybox view is corporate stock gold that may lead to pyrite productions.
The merger ownership box looks like this: “Omnicom Group Inc., based in New York, owns BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide, among other agencies. Paris-based Publicis Groupe SA runs its namesake agency as well as Leo Burnett Worldwide, Saatchi & Saatchi and DigitasLBi.”
The merger generates a solidified worth of revenues of $23 billion. Competitionless screams watchlist for the companies under the umbrella. Nature when a void is created reacts to fill that void. The next reaction is to determine who or what can fill the void to compete against the merger. The natural action is a reaction. As in Newton’s Third Law,”To every action there is always an equal and opposite reaction” to the bigs merger.