International Management Group’s Challenges in 2001 Essay

SWOT analysis of IMG

The main strength in the company lies in its diversified portfolio. IMG has a presence in entertainment, sports, events management, advertising, merchandising, talent management and many more. As a result, the company can cushion itself against risks that emanate from only one industry. IMG has been in business for many years and thus created a strong image in sports and entertainment industries. The company name attracts more business and causes the company to scale new heights. It has a nonhierarchical structure that emphasizes relationships and is highly adaptive to change.

Its weaknesses can be manifested in the form of conflict of interest, focusing on company profitability over clients’ wellbeing, under compensating employees, and failure to take competitor’s strategies seriously. Its opportunities lie in: the use of technology to reach distant partners, strengthening its business expansion strategy by identifying the right industries for expansion and empowering employees and clients.

Its threats lie in the defection of agents, who take valuable clients away and business from the company. Immense competition from more personal and smaller talent management firms is another problem. Use of contractual agreements to source for IMG’s services may undermine its powers as a manager. Other sports conglomerates may undermine IMG’s market share, as well. If the company does not find a suitable successor for McCormick, then this may also be a challenge for the firm.

The value in the relationship between clients and IMG

The value in the relationship between clients and IMG lies in the agents. The founder of the organization is aware of how crucial it is to cultivate strong relationships with one’s clientele. Therefore, he decided to give agents power to make decisions by eliminating structural bureaucracies. Agents are the ones who interact with clients on a daily basis; they are the face of the company. This explains why the company looses clients when agents leave IMG. Even in other areas of business such as financial investment, the company acknowledges that it is the agent’s ability to value clients that cause them to use IMG as their financial manager.

IMG’s various decisions to enter new areas of business

IMG decided to start with golf because its founder was immensely familiar with the sport. Additionally, it was an individual sport where the public could identify with the names of star players. IMG applied the same logic when entering into tennis and race car driving. The company shunned team sports because personalities were amorphous and difficult to publicize. Additionally, an endorsement deal for one golf or tennis star could imply a high commission to the company compared to an endorsement deal for a member of a team. It was wise to abandon racecar driving because many clients died in the line of duty.

The company used its business expertise in a number of sporting events to manage sporting facilities. They made this move in order to secure their income streams because players were unreliable; they could get injuries, retire or choose not to play. IMG entered into the financial investment sector in order to leverage on the lucrative client base that it had. The company knew that athletes had a lot of money to invest, and it saw an opportunity to do this on their behalf. The firm’s entry into sports entertainment was a reflection of all the knowledge acquired from sponsorship deals and marketing knowledge.

If the company owned the franchising of various sports championships, then it could increase its opportunities while still staying true to its core business. When the company ventured into management of modeling and dance clients, it did so because it had a thorough knowledge of athlete talent management. The same knowledge and skill used in this arena would also apply in the new industries. Marketing and franchising were still necessary in those arenas. IMG chose previously shunned sports like team sports and race car driving because of the potential and the exhilaration in them respectively.

Sensible areas of expansion

It was more sensible to get into golf, tennis and all individuals sports. Choosing team sports may not be compelling because this group is yet to yield any tangible results. They based the decision on how promising the team sports were. Additionally, the company’s entry in sports facilities was brilliant because it would ensure a steady stream of income for the firm. Going back to racecar driving at a point where the company had a solid financial standing made sense, because it could spread this risk over a wider portfolio.

The biggest challenges in structuring IMG

The biggest challenge in structuring lies in balancing the need for autonomy in decision making, interpersonal relationships and company loyalty. Agents and other employees who deal directly with clients need to feel that they have the power to make decisions. Further, they need to cultivate relationships with their clients. Nonetheless, the employees must remain loyal to the goals of the company. Therefore, IMG must select a structure that allows autonomy in work but still monitors or ensures that employees serve the company’s interests. In addition to this problem, since the company is a large conglomerate with diverse business portfolios, the structure should allow members from one business unit to work easily with others from another unit.

Overcoming the challenges in structuring

It is possible to overcome these difficulties by maintaining a matrix structure. Employees who have worked with the company for long should be in charge of business units and ought to have job autonomy. The company should also compensate them well in order to strengthen company loyalty. Besides this, IMG should not undercut clients’ benefits deeply in order to foster a healthy relationship between their agents and the clients. As the company looks ahead, it should be willing to alter its structures in order to accommodate new businesses. This high level of flexibility is what will keep the company above its competitors.

A strategy to compete against IMG

As a competitor to IMG one should focus on maintaining an interpersonal relationship and leveraging on its resources to get contracts with them. Since the company focuses mostly on profitability, a smaller competitor can do more innovation and thus supersede the firm.

IMG’s current vulnerabilities

IMG is quite vulnerable in the maintenance of valuable clients and employees. If it can work out a way of offering these two parties a favorable deal, then chances are that it will have a competitive edge. The company underestimates its competitors’ potential and also sacrifices the needs of its consumers for its own benefit.

IMG’s management of its relationships with talent

IMG teaches business people the importance of interpersonal relationships. The company undermined the value that the firm’s agents and employees bring to the organization, and this caused them to become direct competitors with them after they left. Additionally, the company heavily depends on the astute leadership skills of its founder, yet he is approaching retirement age. It is imperative for businesses such as these to do a thorough succession plan in order to secure the future of the organization. Additionally, a company should be willing to revisit its ideas even after rejecting them because circumstances might have changed. The company also illustrates that when building a conglomerate, one should acquire new businesses only when they relate to the core values and goals of the business and not in response to competitors’ actions.