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Synopsis

JC Decaux was started by Jean Claude Decaux in 1960s (JC Decaux ). JC Decaux is known for popularizing the street furniture concept in various countries in Europe and USA. The street concept entails maintaining public furniture in exchange for advertising on those structures. JC Decaux is the only corporation that deals with street furniture, billboards, and transport advertising. Currently, JC Decaux is operating in over forty countries worldwide. In addition, the company has ‘heavy presence’ in over 30 cities in Europe (JC Decaux ). The key aspect of ‘street furniture’ concept is trading maintenance and cleaning of public furniture in exchange for advertising space. Over forty percent of the company’s operations takes place in France, followed by North and South Europe. The main segments of JC Decaux are advertising on street furniture, advertising on transportation stations and vehicles, and advertising on billboards.

In terms of coverage, the company operates in 165 airports in over forty countries where it reaches over 170 million people daily. The company has over 10,000 employees to supports its operation locally and internationally. JC Decaux and two of its close rivals control 30% market share in the outdoor advertising industry. The company has embarked on expanding its advertising space to malls in various countries, such as Singapore, Japan, and United States of America. Street furniture segment is fastest growing business segment in the company. This is attributed to increase in street furniture outdoor advertising expenditure in United States of America and Europe. JC Decaux markets its services by maintaining a complex database that has demographic characteristics of the population across various cities and using social media extensively (JC Decaux ).

SWOT analysis

Strengths

• Business mode

JC Decaux’s business model is based in long term and good team management. The company provides s billboards, transport, and street furniture advertising services. The French outdoor advertising company was the first company to combine public services with advertising.

• International presences

JC Decaux is a European market leader because of advertising and maintenance of street furniture. In addition, the company operates in over 60 countries around the world.

• Alliances

JC Decaux growth is attributed to alliances with partners. The company takes advantage of knowledge and experiences of the local partners to adapt to new markets and further expand.   Without local partners, JC Decaux cannot adapt or grow in the new markets.

• Ecological strategy

The company encourages ecological behavior among the people as part of corporate social responsibility. The company respects and conserves the environment by recycling products, creating trash bins near the street furniture, and using renewable sources of energy.

 

• Excellence culture

The company’s culture is based on quality and transparency.

• Innovation

The company is innovative in terms of   its operation. Street furniture advertising is one of its innovation.

• Brand name

The company is known worldwide because of its strong brand.

• Green marketing
• The company employs green marketing strategy in order to increase its market segment.
• The company wins 86% of its contracts it bids in various countries.
• The company has multiple contracts in cities and malls.
• The company has a complex database, which allowed it to pinpoint target market.

Weaknesses

• Majority of JC Decaux’s operations are centered in Europe
• Most of the company’s contracts are ending
• Strength of dollar vs. euro
• The company is faced with procedural problems related to advertising in new markets
• The company does not own land to accommodate its billboards and furniture. It has to rely on public furniture and lands. In addition, it has to deal with price of land changes.

Opportunities

• Expansion into new markets, such North America
• The company can expand in subways and airports across USA and Canada
• Patent innovation, such as street furniture advertising
• Expanding to Latin America and Asia pacific where street furniture is a new concept
• Joint partnership with Viacom to further increase its market share
• Winning more pending contracts in order to increase market share
• There is an increase in number of people taking public transportation.

Threats

• Competition from Patterson, Viacom, and clear channel
• Loss of major contracts in future
• Regulation from public administrations
• Loss of advertisers
• Legal problems when acquiring other smaller outdoor companies
• Big retailers advertising on their own billboards

Problem statement

JC Decaux’s growth is largely affected by its major competitors, Viacom and Clear channel.

Development of Alternatives

Expansion into North American markets

Canada and USA are among the most developed and high performing economies in the world. The two markets provides JC Decaux with opportunity to grow and increase its market share. Most people use public transportation in the two countries. JC Decaux will have an opportunity to reach out to millions of people in the two markets by placing its billboards at airports and subways.

Patent innovation

Patenting of unique business segments, such as street furniture advertising is more likely to increase the company’s revenues.

Join partnership

Partnership with Viacom is more likely to increase its market share in the industry.

Evaluation of Alternatives & Recommendations

The best alternative for JC Decaux is partnership with Viacom. The two outdoor advertising giants will increase their market share in the global outdoor advertising industry by forming a joint partnership. Joint partnership will be solution to JC Decaux growth problems.

Importance of strategic partnership

Strategic partnerships helps business organizations to sell large volumes of products to their target market. Secondly, strategic partnership helps organizations to manage their support and selling expenses. Thirdly, it helps in increasing market share of a business organization. Lastly, business organizations are able to enjoy economies of scale (Tanner 12).

Greatest Risk to JC Decaux’s growth

Big retailers advertising on their own billboards is the greatest risk to JC Decaux’s performance and growth. This trend will kick the company out of business if it continues. JC Decaux depends on businesses to advertise on its public furniture, billboards, malls, airport, and train stations spaces. The main segments of JC Decaux are advertising on street furniture, advertising on transportation stations and vehicles, and advertising on billboards. Therefore, this trend will kick the company out of business if it continues.

What should JC Decaux do to increase growth in its Street furniture division?

JC Decaux should conduct extensive marketing on its street furniture division using social media and its complex database of demographic characteristics of the population. These strategies will help the company to introduce the concept into new markets, such as Asia and South America.

What should JC Decaux do should it abandon the street furniture market?

The company will be heavily affected by loss of the street furniture segment, which puts it above its competitors. In such a scenario, the company should come up with a unique business segment in order to survive stiff competition from its closest rivals, Viacom and Clear channel.

 

 

Works Cited

JC Decaux . JC Decaux . 1 June 2010. http://www.jcdecaux-oneworld.com/. 15 September 2014.

Tanner, Dwyer. Business Marketing : Connecting strategy , relationship, and Learning. New York: Mcgraw Hill, 2010.