Sterling Cooper Draper Pryce (SCDP) is an advertising agency located in New York City that has been in business since the early 1900s. The executive summary provides an overview of the company's mission, goals, leadership structure, services offered, markets, opportunities, and financials. SCDP's mission is to provide innovative marketing concepts and creative solutions for clients. Their goals include increasing revenue by 20% over the next 5 years and expanding to new locations internationally. The company is led by a founder and CEO/CFO, and has an executive team, account managers, creative directors, and other support staff. SCDP offers advertising and marketing services to clients through new ideas and represents clients through

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Sterling Cooper Draper Pryce
Advertising
1271 Madison Avenue
New York, CA 10029
SCDP@Advertising.co​m
646­715­0823

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Executive Summary
The Company
Sterling, Cooper, Draper & Pryce Advertising (SCDP) is an advertising agency located
in New York City since the early 1900’s. The company can be found online at
WWW.SCDPAdverstising.co​m and can be contacted by phone, ​646­715­0823, or by email at
SCDP@Advertising.co​m.
Mission and Goals
The mission at SCDP is to provide innovative marketing concepts and creative solutions
for the clients. SCDP assists clients in achieving their marketing goals and public appearance. In
the next one to two years, SCDP plans to be leading in delivering marketing solutions to clients
and form partnerships with multiple media companies. SCDP will maximize their potential
growth by providing quality, professionalism, and targeting markets. In the next five years,
SCDP plans to increase revenue by 20 percent.
Company and Management
SCDP consists of employees that include the Founder, Beltram Cooper, then the CEO
and CFO, Roger Sterling and Lane Pryce, and down to the executive team, which is above the
head of accounts, creative director, head of media, and office manager. Under the upper
management are the support team, artists, assistants, and surveyors. SCDP offers a functional
structure; their employees all play key roles in making the company run smoothly. Employees
are encouraged to express ideas and in return the company can offer differentiation in their
products and services.

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Services
SCDP provides advertising and marketing solutions to their clients through innovational
ideas. A variety of clients are publically represented by SCDP through a variety of media and
print sources.
Market and Opportunity
In New York City, SCDP has high competition with other advertising companies, so
SCDP must be unique with their methods. SCDP surveys to find the targeted markets and current
trends, then utilizes that data to create new ideas and focus. By maintaining a competitive
advantage, SCDP is able to compete and maintain their core competencies while utilizing their
resources and capabilities to grow and increase profits. SCDP plans to build in the next in Los
Angeles, Shanghai, and Tokyo by 2020.
Financial overview
SCDP will gain tremendous financial security by engaging in the expansion in Los
Angeles, Tokyo, and Shanghai through the method of capital investment. Research suggests that
marketers are expecting to spend $540 billion dollars globally on advertising this upcoming year.
With SCDP being larger and in more geographic locations, SCDP will be able to accommodate a
larger clientele. In 2015, the total revenue for SCDP was $5.3 billion. Currently due to various
expenses during the year, SDCP has accumulated nearly $1.77 billion in gross income. By SCDP
increasing their customer base globally, there will be sustainable profitability and future
economic growth.
Conclusion

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SCDP has grown over the last 90 years from a small advertising agency to a well known
experienced agency to take business to. Currently, our company has many large companies as
clients and plans to continue to grow.

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Table of Contents
Executive Summary Page 2
Mission Statement Page 5
Company Goals Page 5
Strategies to pursue Page 7
Company Leadership/Structure Page 9
Ethics/Culture Page 11
Internal Environmental Analysis Page 14
External Environmental Analysis Page 16
Market Analysis Page 20
Competitive Advantage Page 23
Growth Strategy Page 25
Financial Analysis Page 26
Implementation Page 26
Conclusion Page 31
References Page 33
Appendices Page 34

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Mission Statement
Sterling, Cooper, Draper & Pryce Advertising (SCDP) is committed to providing
excellence in deliverance of results, public relations, and marketing to our clients by excelling in
customer services and providing innovative marketing concepts. SCDP is here to assist clients in
achieving their marketing goals and strategic communications by providing counsel and creative
solutions while providing the highest professionalism and experience.
Company Goals & Objectives
● Leading in delivering marketing solutions that will transform brands and grow
businesses.
● Utilizing all forms of media by partnering with television, internet, and printing
companies to increase advertising capabilities.
● Maximizing potential growth by providing quality solutions to companies with
advertising by creating ideas with innovation and creativity.
● Developing targeted markets that are agencies specialized in areas ranging from
business­to­business communications to demographically targeted marketing focused on
women.
● Utilizing the full potential of a product, service, and provide truthful information to the
targeted market to decrease potential confusion or hostility towards the marketed
company.
● Increasing our revenue by 20% over the next 5 years.

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Strategies to pursue
Business Level Strategy
At Sterling, Cooper, Draper & Pryce Advertising (SCDP), our main concern is to
enhance the wealth of our stakeholders and not our shareholders alone. In order for us to achieve
this goal, we strive to offer our services using a focused differentiation strategy. By
implementing this business level strategy, we can better maximize our companies core
competencies to develop into sustainable competitive strategies. These strategies, along with our
mission and goals, are what makes SCDP Advertising a successful advertising agency.
SCDP Advertising offers services that are much more distinct than our competitors. At
our company, we strive to offer innovation and creativity along with our marketing services. This
ability allows us to offer more value to our clients. In return, we are able to achieve higher than
average returns. Marketing in itself is a very competitive market with few industry leaders; we
will focus our capabilities to target a focused market. This market includes clients that are open
to the newest methods available and are as innovative as we are. Many of the clients in this
market pool are high capital firms with a strong focus in marketing which allows our clients to
pay a premium in return for our added value. When clients come to SCDP Advertising, they are
receiving the added value through creativity and innovation to achieve their marketing needs.
This focused market yields higher than average returns for our stakeholders and our clients. The
focused differentiation strategy gives us a broad spectrum of benefits. One of these benefits is a
rivalry advantage. The added value to our services gives us a price insulation against our
competitors making us more resistant to the external market environment. SCDP Advertising is
also more resistant in becoming a substitute because of customer loyalty. Our clients are loyal

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because we offer them a service more innovative and creative than our competitors. The strong
loyalty makes it less likely for our clients to look for substitution from a competitor.
Our focused differentiation strategy has allowed SCDP Advertising to grow as an
industry leader. Our brand name has developed a loyalty among our clients and has allowed us to
establish long term capital assets. With a reliable market pool, high capital assets, and our
company strategies, SCDP Advertising has remained in the industry for over half a century and
will continue to do so.
Corporate Level Strategy
Sterling, Cooper, Draper & Pryce Advertising (SCDP) pursues a dominant business
diversification strategy. This strategy allows us to focus our resources and capabilities into
developing our marketing services. The strategy has allowed us to innovate our services and add
value in exchange for a premium price. Our revenue is generated primarily through our
dominant business of marketing services. SCDP Advertising is the dominant business. The low
diversification strategy allows our company to allocate resources to develop our core
competencies into sustainable competitive advantages. Our sustainable competitive advantages
in turn allow us to generate higher than average returns for a long term period.
Though there are some risks with a low diversification strategy, our firm insulates itself
from these risks through two different methods. One method is by using the higher than average
returns and converting them in high capital assets. These assets allow us to have liquidable assets
as an insulator to market fluctuations. The second method of insulation derives from the fewer
managerial challenges we face due to our dominant business strategy. Because we focus on one
firm, we are able to perfect our management strategy that in return allows our company to run

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smoothly and efficiently. A strong management with less complications makes our company less
prone to internal duress which can catalyze diversification risk.
At the moment, this corporate level strategy of a dominant business diversification has
allowed SCDP Advertising to grow and be successful at providing marketing services.
International Strategy
Sterling, Cooper, Draper, & Pryce Advertising (SCDP) currently is based off a single
location in New York City, but operates with clients on an international level. To operate
efficiently and maximize revenue, our company operates with an international business level
strategy. The approach we take is a transnational approach. Our firm’s goal is to achieve global
efficiency and local responsiveness through this strategy. To achieve global integration, our
company is currently looking at an expansion growth strategy which will set up strategic
business units globally to integrate with our international market. A more detailed growth
strategy will be outlined later in the report. Our pursuit of local responsiveness is best achieved
through our firm’s commitment to meeting our clients demands. SCDP Advertising seeks to
meet the specific marketing needs of our clients and allows us to tailor our services to the local
market.

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Company Leadership/Structure
Sterling, Cooper, Draper & Pryce Advertising (SCDP) consists of multiple levels of
employees who function as one to offer high satisfaction with their customers and targeted
population. Bertram Cooper founded the company with Roger Sterling Sr., since passed, and left
the name to his son, the president and CEO Roger Sterling. Sterling works with the creative
director Donald “Don” Draper to put into place decisions and run office meetings. Since Draper
has began working at SCDP, the innovation has grown tremendously which has caused an
increase in clientele. Peggy Olson, once the assistant of Draper, became a copywriter who
increased the writing skills and added a new perspective to SCDP’s marketing. Joan Holloway
assists with the organization of the office and keeps the daily work flowing. With Holloway,
managers of the offices are able to focus on all ideas and clientele’s needs. The Chief Financial
Officer (CFO) Lane Pryce makes changes that are quite successful in saving SCDP costs. Some
changes included cutting out frivolous expenses, time consuming and unnecessary expenses, and
informing the managers of the company with the financials. The head of accounts, Pete
Campbell, and head of media, Henry Crane, work together to bring in new clientele to partner
with outside media to market clientele products and services. Behind the scenes is the executive
strategic management team consisting of Anh Nguyen, Jovanny Perez, Jessica Peterson, Eugene
Lankin, and Steven Lai. The executive team assist the company with adapting to external
environmental changes. As marketing or advertising needs change, the executives are able to
assist the company in moving in a new direction.
The structure at SCDP is considered functional with a differentiation strategy. At SCDP,
Cooper is at the top and leaves the decision making to Sterling and Draper. Once a decision is

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created, it is then taken to either Bertram and/or other heads of operations to make the final
decision. As shown in the functional chart, SCDP encourages ideas at the bottom of the company
and allows them to be brought to attention in the meetings. Each employee is encouraged to offer
new ideas to the design team to use in the marketing concepts for the clientele. In order to create
differentiation, SCDP has to represent themselves as unique with new and unusual ideas and
methods. A step to broaden ideas is to use people outside the normal marketing team, such as the
assistants or even non­employees. SCDP searches to see what is attracting the current population
and makes it superior. SCDP currently has a few challenges with the functional structure with a
differentiation strategy due to the lack of guidelines for the employees. Some employees at times
may forget about their assigned work because they are working on other teams members work
instead. Although, ideas and creativity are encouraged it must be monitored.
SCDP is currently located in New York and plans to grow to Los Angeles, Shanghai, and
Tokyo. Once SCDP has expanded the transnational international strategy will be implemented.
SCDP will utilize the transnational strategy to pursue profitable growth in the international
markets by using their information and experience to open another office in the above locations.
The services will be altered in a way that will appeal to the market. The new offices will reach
the home office to identify plans and the individual team will implement it.

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Ethics/Culture
Ethics
We are not only concerned with being profitable, we care about the welfare and ethical
treatment of our staff. Our human resource department is responsible for giving equal
opportunities to all. Sterling, Cooper, Draper & Pryce Advertising (SCDP) provides appropriate
training and code of ethics. Our strategy is sustainability. In addition to the concern about the
“green environment”, our ethics also include social sustainability, focusing on human capital,
worker’s rights, working conditions, moral training, etc.
We are considering the personal values, family background, culture, education, etc. from
our employees before we make any important decisions. To establish an ethical business
environment, our organization adopted a code of conduct for our employees which outlines the
behavioral standards addressing the guidelines on acceptable and unacceptable behaviors and
consequences. The goal of SCDP is to increase customer loyalty, employee retention, and good
public image.
According to Dr. Collins, who was recently honored with an Innovation in Teaching
Award for the course from the Middle Atlantic Association of Colleges and Business
Administration, there are five stages of Corporate Strategy: defensive, compliant, managerial,
strategic, and civil. Our company is practicing the fourth stage, “strategic”, and moving towards
the highest stage, “civil.” In response to the author’s statement “They often find that responding
to public needs gives them a competitive edge and enhances long­term success (Collins, n.d.)”,

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SCDP offers free marketing services to a randomly selected small business to help them grow
revenue. In return, SCDP gains long term clients and builds relationships with small businesses.
Culture
Sterling, Cooper, Draper & Pryce Advertising (SCDP) implements an adhocracy culture.
This form of organizational structure is flexible and informal. Adhocracy is primarily
characterized by an adaptive, creative and flexible integrative behavior. Some of the
characteristics Sterling Cooper Draper Pryce possess is it’s highly organic structure and selective
decentralization. What this translates to is that all members of an organization have the authority
within their areas of specialization, and in coordination with other members, to make decisions
and to take actions affecting the future of the organization. The ad agencies success can be
directly related to this culture. The firm has personnel whose purpose is to keep the employees
satisfied and help maintain productivity. This is one of the core advantages at SCDP. We
promote this environment to help encourage the creative process and optimize their human
resources. SCDP provides various perks in order to keep their most important asset, the people,
happy and taken care of. They provide free, high quality, meals throughout the day to employees
to keep them well­fed. SCDP offers health and dental plans free of charge, which come at a cost
to the firm. Due to employee satisfaction and decreased turnover, these benefits far outweigh the
expense.
Another key factor promoting this unique culture is that SCDP practices an organic form
of organization. SDCP has a flat structured entity with few layers of management because its
level of complexity and centralization are low. This means that members at SCDP share in the

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organizational decision­making process. This form of organizational structure helps facilitate a
culture that encourages personnel of all levels to make an input on decisions. This helps them
feel acknowledged and appreciated that their views are being considered when decisions are
being made. An important aspect of the culture of SCDP is effectively dealing with the rapidly
changing environment. This firm possesses the attributes that help address and manage
unforeseen problems and issues. This is enabled through our informal communication system
which allows for quick communication, a flat fluid structure that can adapt to changes at a
relatively fast rate. Lastly, this communication system gives SDCP the ability to easily and
continuously change individual activities in the organization. Our firm is very flexible and
adaptive to any changes, enabled through the few layers of management and the decentralized
approach to conducting the organization.

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Internal Environmental Analysis
Resources
Sterling, Cooper, Draper & Pryce Advertising (SCDP) company’s tangible assets consist
of our financial resources, physical resources, and technology resources. Funding is the most
important element in starting a business. With a long, well known history in the advertising
industry, our firm has the ability to borrow capital to expand our business or it can use the extra
free cash flow within the corporation. In addition, our corporation has a stable and growing
income from our long term contracts with giant clients. Another tangible resource is our physical
office on Madison Avenue in New York City. The term “Madison Avenue” is metonymically
used for advertising; therefore our office on that avenue have been well known since 1960s.
Technology resources is our other tangible assets. Empowered by the latest technology, our
teams can share their views, cull information, and transform creative ideas to the tremendous ads
products.
The foremost component of our company’s intangible resources is our human resources.
The success of an organization is deeply built on the talent and strength of its employees. Our
creative team is made up of the most innovative and inspired key members in the company.
From our team members’ knowledge and skills, we have the ability to innovate, and be
successful in the advertising industry. Another component of intangible resources which makes
the success of our company are our own 50 years brand name and the positive reputation from
our big clients, such as: Procter & Gamble, Warner Brothers, Chevrolet, and etc.
Capabilities

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Since innovation can help drive new revenues and open new pathways for our
organization, innovation is very important to our business, especially in an advertising industry.
With the benefits derived from our resources, such as: creative teams and advance technology,
we have a capacity to innovate and invent new ideas. Aside from this, our organic culture
establishes the environment for successful innovation. Our organization culture helps in
developing and exchanging information and knowledge through the firm’s human capital.
Another capability is the platform capability which simply means advertising everywhere
strategy. Our firm is able to advertise by prints, radios, digital, mobile, and social media.
Therefore, we can diverse our products, and get more customers from the advertising market. We
have more than 50 years’ experience and reputation in print advertising, and now we are
expanding our capability to reach the expert in digital and media advertising. Although we just
have one office on Madison Avenue in New York City, we have a growing virtual customer
service representatives who were trained to provide the best customer service. In short, we have
abilities on innovation, platforms, and customer service.
Core Competencies
Throughout the years, innovation has been the heart of our business core competencies.
SCDP has some of the best creative graphic designers who are constantly learning the future
social trends and are able to cast and develop commercials and promote products. Our ambitious
clients not only come to us every day asking for a new idea in commercial videos but also
looking for a solution to their business. We do not define innovation as a few last minute ideas;
however, our team tends to be involved in the entire process to bring to our clients a full solution
in marketing. Ever since the advertising industry evolved due to technology and social media

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development, our team constantly has to find new and better ways to survive in the harsh
advertising competition. Innovation which is a core for us to survive also is a reason for us to
grow up in digital advertising.
External Environmental Analysis
Demographic
To obtain the ability to satisfy customers with different demographics is a challenge for
Sterling, Cooper, Draper & Pryce Advertising (SCDP) because customers from different
countries and class have different desires. Which is why it is important for our company to
diversify the customers we serve. We tackle this issue by creating hundreds of advertising
projects to address a particular demographic, regional influence or trend. Our experience and
knowledge is in satisfying many different customers. One group could have dozens of variations
of interests in different products that are popular in that region of the world and not others. SCDP
is very keen at identifying what the market needs. Our target markets are specialized agencies in
areas ranging from business­to­business communications to demographically targeted marketing
focused on women.
Economic
At SCDP we are always vigilant about any economic shifts and changes, therefore our
strategic team in conjunction with our finance team properly plans and adapts in order to avoid
any potential crises. The crisis can cause economic turmoil, increased unemployment, a rise in
furloughs, bankruptcies of many corporations and overall great financial distress in general.
Being able to retain creative workers in our workforce that can come up with great ideas is a

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huge concern during budget cuts. Without innovation and creativity, SCDP business strategy of
differentiation will struggle because the lack of workforce due to layoffs will be an issue to keep
the company profitable. In 2011 a similar advertising company called McCann had to cut 5
percent of its workforce which is about 500 workers in response to spending cuts and difficulties
in finding business opportunities.
Sociocultural
​Since SCDP is planning to be a major player in the global market and distributes
services in many different countries, our company has to be socially aware of the different
cultures in those countries. Colors have different meanings in different cultures. For example,
black and white colors are used for mourning the dead and in green is Egypt's national color.
These colors should not be used as packaging or advertising in these respective countries.
Another example is how Americans find tanned skin pleasing to the eye, but it is the opposite in
Asia. Target has made a mistake in advertising a clothing line for plus sized women. The
problem was not making clothing to satisfy bigger women, but naming the color grey to mantine
grey. Customers found correlating manatine and oversize women offensive. Because in these
different countries there are various different customs and traditions local citizens abide to. So it
is very critical for SCDP to be well versed in these different cultures in order to know the right
approach to market to these customers.
Global
As there is a steady increase in the global economy, the economy becomes more reliant
on technological advances. This in turn creates an opportunity for SCDP to further promote its

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position in the global market. We have our marketing, financing department and logistics
regarding research and development located in New York City. We plan to expand our
operations to China and Japan also. Currently China has one the biggest growing economy in the
world with a growing middle class. Demands for products such as bags, electronics, and
accessories that were once only affordable for the rich are not on the rise by a growing upper and
middle class in China as foreign job opportunities continue to to be grow. SCDP expects to
employ over 300 employees and distribute in 3 countries. Since the beginning of SCDP, it has
established itself as a company that is known for its quality services and brand name. By
expanding its globally presence, SCDP can be a leader in advertising around the globe. With this
creative and innovative mindset that is coupled with reasonable prices, SCDP has impacted its
sales in a profitable way.
Technological
Technology is an external factor SCDP will have to address. In a statistic report from
Statista, from the year 2015 to 2016, advertising in cinema, digital, radio, and television continue
to grow in demand. However, magazines and Newspapers continue to decline. This trend shows
consumers prefer to see content in digital format and information in paper is preferred less.
SCDP has always lead the way in terms of producing products that are enhanced by technology
and software from other companies in order to help create the most advanced experience for the
consumers. Also we have offered one of the best services of advertising. This company doesn’t
follow advertising procedures, it goes above and beyond that. It creates new advertising
strategies. SCDP strives to continually deliver landscape changing advertisements, while keeping
a focus on even the subtlest of design details that makes its services and its brand cherished by

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millions of customers worldwide. Not only does SCDP abide to its standard of quality it is also a
“driving innovation in advertising, implementing feedback through communications on the
internet, on movie premiers, sports entertainment on television, and radio stations during busy
traffic hours”.
Political/Legal
Legal issues depending on which country controlled by their government can pose a
difficult obstacle for SCDP. In the American U.S. Government, advertising industry must
operate within strict federal regulations. The Federal Trade Commision monitors advertisers to
ensure they act ethically all times, pay special attention when advertising to children, advertising
potential harmful products, and using methods that can alter the audience’s thoughts. These
advertisements must be truthful and not deceptive or unfair. These requirements are only a few
examples SCDP will have to address. Operating overseas such as China with heavy censorship is
another challenge if advertising companies wish to expand their business.

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Market Analysis
The market analysis we conducted indicates that advertising is incredibly important to
business therefore there will always be the need for agencies that can provide these kinds of
services. Making advertisements requires the creative process. Corporations allocate a lot of
resources in order to market their products to potential customers. Companies such as Microsoft,
Coca­Cola, Heineken and various others spend billions of dollars on marketing and advertising
in order to capture the attention of consumers and have in turn have become some of the largest
brand names not only in the domestic market but also on the global spectrum. Companies cannot
survive without the consumerism. The primary objective of advertising is to get the word out to
the market that you have something they potentially might want. The key to SCDP’s approach to
advertising doesn’t just make the consumer want the product, we make them need it. Don
Draper, the Creative Director of the firm is quoted saying, “Advertising is based on one thing,
happiness. And you know what happiness is? Happiness is the smell of a new car. Its freedom
from fear. It’s a billboard on the side of the road that screams reassurance that whatever you are
doing is okay. You are okay.” This quote indicates that the SCDP exhibits the understanding of
the consumer market and what drives it. This company possess the intuitive understanding of the
consumer’s mind. This is why this ad agency is so wildly successful because we understand that
people want to be told what to do so badly that they’ll listen to anyone. Billboards, commercials,
print ads, and various forms of media help promote the intended products. Advertising helps to
raise your demographics’ awareness of issues with which they may be unfamiliar as well as
educate them on the related benefits of issues of your service and product. This is another

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indicator of why there is so much revenue to be made by advertising agencies because as long as
consumerism and businesses will exist, there will always be the need for these products to be
advertised and promoted to the consumers of this market. Demand for advertising will increase
with the number of new products. Firms want to inform consumers about the availability and
characteristics of a new good to establish a market niche. With some many companies coming
out with new products, the need for these products to be marketed to the consumers keeps
growing. Not only do these companies need a way for these to be marketed, they need to be
advertised in such a manner that the consumer will choose their product or service over the
competitor’s.
We also conducted research to support our claims regarding the increase of the need for
advertising and the need for advertising agencies that can provided these types of services. There
are many positive signs that indicate that advertising is on the rise across the world. In general ad
spending is increasing at a fast pace. Worldwide spending has increased by 5.8% in 2016 and
has reached an all­time high. Recently the internet has passed newspapers as the world’s second
largest ad medium. This source of advertising uses roughly 1 out of every 5 dollars allocated for
advertising, while TV still remains the frontrunner source of advertising because it is responsible
for 40% of the advertising generated by companies. Ad spending grows and will keep growing in
the future. Currently China is the third fastest growing advertising market. The two largest being
the U.S and Japan respectively. It is one of the fastest growing markets in the world. With the
introduction of newer technology, the consumerism of electronics and technology is the fastest
growing ad category among the Global 100 with a 9.6% increase in future years. With some
many products needing to be advertised there will be stiff competition between ad agencies over

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the securing of lucrative contracts with brand names such as Sony, Toyota, Apple, Old Spice and
such. The product and service that SCDP is offering isn’t entirely new. The concept of
advertising has been around for since ancient times when Egyptians used papyrus to make sales
messages and wall posters. So in the modern world we have multiple very successful advertising
agencies such as McCann Erickson who have prestigious clients such as Nestle, GM, Coca­Cola,
General Mills. This causes very fierce competition between agencies to acquire and retain these
globally recognized brands. We have come to the conclusion that because there is such a wealth
of new products waiting to be advertised and a market to take advantage of that the advertising
industry can be very profitable.

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Competitive Advantage
Core Competencies/ Discovering Core Competencies
Sterling, Cooper, Draper, & Pryce Advertising (SCDP) produces the most innovating
marketing services in the industry. Our company has utilized its resources to develop an
innovative process that allows for creative thinking to produce results. Our firm uses the
organizational adhocracy culture to allow the team to think freely with reduced stress. At SCDP
we do not pressure our team to produce results because we can count on them delivering, we also
have “free thought rooms” in which we provide an ambient room to process ideas freely. This
innovative way of managing our employees produces not only results, but offers clients an added
value. Our adhocracy culture can be attributed to our sustained market share and revenue stream.
Valuable: ​Valuable capabilities allows for firms to exploit opportunities in their external
environment. At SCDP our internal organizational structure that consists of an adhocracy culture
gives our staff the tools to produce results. Our adhocracy culture allows us to exploit the market
share and reduce competition risks because we gain loyalty among customers due to our
differentiated services.
Rare:​ Rare capabilities are essential because it means that there is not very many, if any,
competitors with the same capabilities. Many marketing firms in the industry do not use an
adhocracy culture and rather utilize an easier to manage hierarchical culture. SCDP has learned
that our company is unique because it is difficult to manage and perfect. Being a rarity in the
industry our internal organizational structure allows us to succeed in the market.
Costly to Imitate: ​Capabilities that are costly to imitate act as a barrier for other companies.
Completely restructuring a company’s organizational structure can be quite costly. SCDP has

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utilized this organizational structure since the founding years. For other firms to attempt to imitate
our organizational structure it would require a high capital investment to conduct the proper
research and restructuring of the firm.
Non Substitutable: ​Capabilities that have no direct substitutes, or cannot be imitated easily, are
essential for sustainable competitive advantage. In the case of a new organizational structure this
can go both ways. Although the Adhocracy structure embraced by SCDP is a shift from
traditional firms it may still have be substituted by a similar organizational structure. Adhocracy
in some cases may be considered non substitutable and in some cases may not.
Sustainable Competitive Advantage: Adhocracy culture
Our sustainable competitive advantage is our internal organizational structure that is used
to to manage our employees. The adhocracy culture we embrace allows our firm to provide the
quality of our service our clients seek. Our innovative and creative services are ranked as the
highest value to our customers. Our sustainable competitive advantage is reinforced by our
product differentiation strategy and innovation core competency. The ability of ​Sterling, Cooper,
Draper, & Pryce Advertising (SCDP)​ to innovate a new product and new solution in marketing to
bring the best value to our clients. Innovation helps create the value for both our company and
customers in the competition market. In the article, “Can Marketing and Media Be Leaders
Innovation,” the author claims although advertising and marketing is a field which requires new
ideas and innovation, finding the truly innovative idea can be a challenge. ​SCDP solves this issue
by using an Adhocracy culture.​ Our sustainable competitive advantage is rare, and not easy to
imitate. With more than 50 years of experience in advertising industry, we have been building the
best workplace to innovate, and it is costly to imitate. Our internal organizational structure allows

28. Group 5 Page 28
to be more resistant to competition and the external environment. Moreover, there is no practical
substitute for this sustainable advantage.
Growth Strategy
The growth strategy for our company is to expand business operations beyond New York.
We would like to expand to locations Los Angeles, USA, Shanghai, China, and Tokyo, Japan
because these locations have the fastest growing advertising market. Expansion to these locations
will broaden our customer base with different cultural beliefs and needs. This diversification is
expected to create value and allows our business to increase revenues or reduce costs while
implementing our business­level strategies. Expanding our business internationally gives us the
ability to block competitors that are interested in operating within our industry. This is also
known as increasing market power of our business. Diversification also marginalizes the risks
our company will face by putting our investments through different locations. If one of our
offices failed to reach its goals, another office that is doing well in another country can offset the
loss and our company from defaulting on our debt to banks and investors. Considering our
corporate strategy is following a differentiation strategy our company will be running a
decentralized structure having offices from different locations are expected be more autonomous
and self sustainable by management governed to compete to run efficiently. These offices will
follow our corporate level strategy and retain a related linked relationship. Each unit will share
some limited resources, but our main business in New York City will produce the largest share
of revenue. These offices will operate with transnational standards by focusing on satisfying the
needs of management and the local community each office built on the location of the offices in
Los Angeles, Shanghai and Tokyo. Each office is expected to form strong business relationships

29. Group 5 Page 29
with its customers and 3rd party partners to keep our services excellent without sacrificing low
costs.
Financial Analysis
Sterling, Cooper, Draper, & Pryce Advertising (SCDP) will gain tremendous financial
security by engaging in the expansion of their market in prominent regions such as Los Angeles,
Tokyo and Shanghai through the method of capital investment. SCDP will establish itself in this
emerging market by establishing headquarters that offer their advertising services and core
capabilities. SCDP should remain conscious of the ever changing external and industrial
environment when making moves of this great proportion. With the introduction of new
products and goods that need to be advertised on a global scale, the need for market is always
growing. We conducted research that provided us with concrete facts that suggest that global
spending on media is projected to rise at a compound annual rate of 5.1 percent during the next
five years. By 2019 that amount should be roughly $2.1 trillion. Digital advertising, video games
and broadband will continue to be the fastest­growing segments over the next five years. We
estimate that we will increase by 12.7%, 8.1 % and 7.8% respectively. Marketers are expected to
spend $540 billion dollars globally on advertising this upcoming year. Digital ads will lead the
way for global media growth in the next four years, accounting for 33% of total advertising
revenue, nearly catching TV in the process. TV advertising will grow to $214.7 billion in 2018.
During the same period, Internet advertising will grow from $133 billion to $194.5 billion. This
following research is indicative of why SCDP should go through with this growth strategy. By

30. Group 5 Page 30
entering the global market, they will see increased sales, revenue, and overall greater profit
margins. We believe that in addition, SCDP will drastically improve and increase their customer
base globally which in turn leads to sustainable profitability and future economic growth.
SCDP has experienced an increase in financial profitability over a sustained period of
time. After performing various preliminary analytical testing and financial analysis we
discovered a few indicators that pointed towards the notion that SCDP is maintaining a
successful organization. All of the data we found to construct our profit and loss predictions can
be found in the P&L statements in the following sections. In 2015, the total revenue for SCDP
was $5.3 billion. Currently due to various expenses during the year, SDCP has accumulated
nearly $1.77 billion in gross income. If SCDP goes through with their growth strategy of market
expansion, there will be an increase in revenue. With this growth strategy in mind, we forecast
that in 2016, revenue will increase by 22 percent to $6.44 billion. The basic earnings per share
for 2015 were $8.72. We forecast that in 2016 earnings per share will grow by 2% to $8.91. In
2015, SCDP generated a total amount of cash flows from operating activities equating $1.33
billion from operating. In 2016, we expect the cash flow to from operating activities to grow by
27% to $1.71 billion. In 2015 we acquired negative $4.74 billion total cash flows from investing
activities. We project that in 2016, their next operating cash flow will increase by 38% to
negative 3.45 billion. Lastly the advertising agency was able to generate $3.5 billion in total
cash flows from financial activities in 2015. Given our equation we believe that the cash flow
from net financing will decrease by 53% to $1.86 billion in 2016.
SCDP will perpetuate financial success through a relaxed constrained diversification
strategy coupled with the transnational international strategy in Los Angeles, Shanghai and

31. Group 5 Page 31
Tokyo by playing off their existing organizational strengths. We project that if all variables
remain constant and our growth rate remains at 20 percent per year, over the next five years our
revenue will increase to $13.38 billion. Sales growth in China and Japan is a vital part of
increasing the business of SCDP. If Chinese economic, political or business conditions
deteriorate, or if one or more of the risks described above materializes in China, overall business
and results of operations will be adversely affected.
Implementation
Sterling, Cooper, Draper, & Pryce Advertising (SCDP will pursue a global and domestic
growth strategy by the end of 2017. In pursuing this strategy our company is expected to not only
gain a larger global market share but also increase revenue streams substantially. As stated in our
financial analysis, the need for marketing services has grown exponentially with many firms
allocating billions of dollars to their marketing needs. This opportunity will be captured in our
expansion to the Los Angeles area in 2017 followed by our global expansion to Tokyo, Japan
and Shanghai, China in 2020. SCDP already has established connections with clients in these
areas but by setting up a physical location we hope to capture a strong local response while
maintain our mission and values. To fulfill the expansion there will be a domestic acquisition as
of already established marketing agencies in Los Angeles and a joint venture in the global

32. Group 5 Page 32
market. We aim to acquire smaller firms that specialize in online marketing and work on a B2B
level and work with established marketing firms as a joint venture for our international strategy.
SCDP will engage in an acquisition strategy to fulfil our domestic growth strategy. In
doing so we will gain quick access to these new markets in Los Angeles. Acquiring new firms
will be a high capital expenditure but because SCDP already has large cash reserves from our
revenue growth the acquisitions will be attainable financially. Our acquisition will take place in
Los Angeles by the end of the year 2017. In doing so we hope to capture the growing need for
television advertising which is expected to grow to $217 billion by the end of 2018. Los Angeles
is the center and heart of television media and so the need for marketing will be exponential here.
Having acquired a firm in the Los Angeles area will also open up opportunities with the local
media market. In essence this will be a horizontal acquisition strategy as we will gain new
resources from the firm which will help us expand our market share. SCDP will share some
resources with these new subsidiaries, most of which will be in the form of intangible assets, that
is we will transfer our innovation strategies as well as our organizational structure strategies.
Our international growth will begin with a series of joint ventures in Tokyo, Japan and
Shanghai, China. Because cross border acquisitions in these regions would be extremely
complex and costly, SCDP has opted for a strategic alliance in the form of a joint venture. The
two ventures that will take place will be between Dentsu Inc. in Japan and Leo Burnett Shanghai
Advertising Co.. We aim to complete and implement these joint ventures by the end of the year
2020. Dentsu is currently the third largest global marketing agency and holds a large market
control of media outlets in Japan. Dentsu has in recent years sought to use westernized marketing
strategies to pursue in Japan. SCDP will begin negotiations with Dentsu following the Los

33. Group 5 Page 33
Angeles acquisition in 2018. In doing so our company will be able to offer Dentsu the marketing
solutions in needs in its home country by sharing our resources. Our company specializes in the
innovation and creativity that Dentsu needs so a strategic alliance is highly attainable. If
implemented by 2020 SCDP will have gained access to Japan's marketing industry and will add
revenue streams close to $1billion by the end of 2020. The second global market we will enter
will be in Shanghai, China. Sterling Cooper Draper Pryce Advertising will aim to simultaneous
attain these two joint ventures and implement them in the same time frame, from 2018­2020. The
reason for this is we hope to capture as much market share as possible from this emerging digital
marketing industry which in turn will generate large revenue streams for our company.
Concocting an alliance with Leo Burnett Shanghai is expected to be much easier and smoother.
Leo Burnett Shanghai currently has a center in Boston, USA, which has in other times has
outsourced work to our firm for small projects. We have an established relationship with Leo
Burnett Shanghai which will make the alliance plausible by 2020. When established Leo Burnett
Shanghai will open up the market in China for our firm. Currently Shanghai China has a growing
marketing industry. On average the marketing industry revenue has grown by 20% reaching over
$1 billion in 2015. If projections are correct the industry will be worth over $2 billion by the end
of 2020. Having a set, a joint venture will allow SCDP to tap into the revenue of this market.
A strategic plan has been set and is expected to be implemented by the end of 2017,
beginning with a domestic acquisition strategy followed by an international joint venture. Both
our domestic and global strategy will be completed by 2020. The domestic strategy will allow us
to gain resources for our dominant business in New York, which in turn will serve as bargaining
chips for our international ventures. We expect the joint ventures to go smoothly and have access

34. Group 5 Page 34
to the Japan and China market by the end of 2020. There will be a limited amount of resources
shared in this growth strategy primarily our internal organizational strategy and innovation
techniques will be shared. In doing so we hope to add revenue streams to our business of plus $2
billion by the end of 2020. This growth strategy will also give our firm long term access to a
global market which will translate into possible cross border acquisitions in the future.

35. Group 5 Page 35
Conclusion
From the beginning, Sterling, Cooper, Draper & Pryce Advertising (SCDP) declared
itself dedicated to creating a network built on collaboration and shared best­in­class resources
designed to help all of its clients maximize their growth potential. We went from being this start
up advertising agency in the 20’s that was hardly on its feet to being one of the most prestigious
advertising companies in the world. Previously our only major client was Lucky Strikes whereas
nowadays we have contracts with well­known brands such as Toyota, Ferrari, Intel, Hennessey
and Alienware. ​Along the way, it was Sterling Cooper Draper Pryce in early 1960s that
introduced coordinated marketing communications, incorporating such areas as public relations
and sales promotion.
We have developed strategically aliened partnerships with media giants such as
Time­Warner, GE, Disney, CBS, New­Corp and GE in order to provide prime time broadcasting
and advertising for our premier clients and their goods and services. These partnerships are
incredibly key because 90 percent of the media is owned by these six companies. So we are able
to provide for our very respected clientele and offer them the best in the business in terms of
marketing and advertising. We believe that with our adhocracy business culture, our innovative
approach to advertising, our outstanding award­winning personnel and our creative director, Don
Draper that we are in fact one of the most revolutionizing advertising agencies in the market
today. We believe we can achieve a competitive advantage through the use of focused
differentiation, dominant business diversification and a transnational approach of conducting our
business. This company possess the intuitive understanding of the consumer’s mind. This is why
our ad agency is so wildly successful because we understand that people want to be told what to

36. Group 5 Page 36
do so badly that they will listen to anyone. The market for advertising has never been bigger. Ad
spending grows and will keep growing in the future. Currently China is the third fastest growing
advertising market. The two largest being the U.S and Japan respectively. SCDP produces the
most innovating marketing services in the industry. Our company has utilized its resources to
develop an innovative process that allows for creative thinking to produce results. Our firm uses
the organizational adhocracy culture to allow the team to think freely with reduced stress. Our
sustainable competitive advantage is our internal organizational structure that is used to manage
our employees. The growth strategy for our company is to expand business operations beyond
New York. We would like to expand to locations Los Angeles, USA, Shanghai, China, and
Tokyo, Japan because these locations have the fastest growing advertising market. Expansion to
these locations will broaden our customer base with different cultural beliefs and needs.
SCDP will perpetuate financial success through a​ ​related constrained diversification
strategy coupled with the transnational international strategy in Los Angeles, Shanghai and
Tokyo by employing our organizational strengths. We project that if all variables remain
constant and our growth rate remains at 20 percent per year, over the next five years our revenue
will increase to $13.38 billion. Sterling Cooper Draper Pryce delivers marketing solutions that
transform brands and grow businesses. The company is comprised of a collaborative roster of the
best­in­class that emphasize creativity, innovation, and performance.We believe that we are the
company you should invest in. We are the future in advertising. And you may ask what makes
us different from other advertising agencies? We would like to conclude our business plan with
one parting quote from our creative director, Don Draper when comparing us to our competition

37. Group 5 Page 37
he said, “ We are the product. We feeling something. That’s what sells. Not them. Not sex. They
can’t do what we do, and they hate us for it.”

38. Group 5 Page 38
References
Aditham, K. (2011, Aug 4th). ​Adweek.com​. Retrieved May 2nd, 2016, from AgencySpy:
http://www.adweek.com/agencyspy/mccann­ny­layoffs/22594
Adweek.com​. (2011, August 5th). Retrieved Apr 30th, 2016, from Adweek:
http://www.adweek.com/news/advertising­branding/mccann­ericksons­layoffs­affect­25­30­staff
ers­133932
Ashe­Edmunda, S. (n.d.). ​smallbusiness.chron.com​. Retrieved May 14th, 2016, from chron:
http://smallbusiness.chron.com/examples­advertising­strategies­10853.html
Collins, K. (n.d.). ​catalog.flatworldknowlege.com.​ Retrieved from
http://catalog.flatworldknowledge.com/bookhub/7?e=collins­ch02_s07
Divinsky, P. (2008, July 8). ​CNN.Com​. Retrieved from CNN World:
http://www.cnn.com/2008/BUSINESS/07/08/jwt.answer/index.html
Hitt, Michael A., R. Duane Ireland, and Robert E. Hoskisson. ​Strategic Management:
Competitiveness & Globalization​. Print. retrieved at 5/14/16
McNamara, C. (n.d.). ​managementhelp.org​. Retrieved May 1, 2016, from Free Management
Library: ​http://managementhelp.org/businessethics/index.htm
Statista.com​. (n.d.). Retrieved May 10th, 2016, from Statista:
http://www.statista.com/statistics/272304/growth­of­global­advertising­revenues­by­medium
Taylor, N. F. (2015, June 19th). ​Businessnewsdaily.com​. Retrieved May 14th, 2016, from
Business News Daily:
http://www.businessnewsdaily.com/4679­corporate­social­responsibility.html

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Appendices
Functional Structure for implementing a differentiation strategy
Sterling, Cooper, Draper & Pryce Advertising organizational chart
S.W.O.T Table

40. Group 5 Page 40
Functional Structure for implementing a differentiation strategy
Sterling, Cooper, Draper & Pryce Advertising organizational chart

41. Group 5 Page 41
S.W.O.T Table
S
T
R
E
N
T
G
H
S
● Expertise and experience in the advertising industry
● Strong reputation
● Customer loyalty
● Financial ability
● Free cash flow
● The best creative team
W
E
A
K
N
E
S
S
E
S
● Only one office in New York
● Huge amount of R&D
O
P
P
● Expansion of the new market
● Innovate the new product

42. Group 5 Page 42
O
R
T
U
N
I
T
I
E
S
● International expansion
T
H
R
E
A
T
S
● Increased competition
● New cultures of new geographic markets