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Leo Burnett Company (“LB”) is a globally recognizable advertising agency. It is one of the premier advertising agencies in the United States and made its mark as early as 1935. At the turn of the 20th century LB expanded globally and as a result there are now close to a hundred offices in 83 markets worldwide. The company established a Toronto office in 1952. Two decades later LB established a London office in the mid-1970s.
The London office became the regional hub for clients located in Europe, the Middle East and even Africa. Thus, the London office can be considered as the second most important component of LB outside the United States. One of its most important clients is Ontann Beauty Care (“OBC”) a global manufacturer of health and beauty care products.
OBC awarded the advertising contract to LB. But after months of hard work, the Canadian launch was a major disappointment. However, Taiwan’s launch was a huge success. The failed advertising campaign is due to the fact that LB and OBC overlooked the impact of a globalized economy and cultural differences.
If one simply considers the current problem of LB and the mixed outcome of the advertising campaign for Forever Young, then, there are three major stakeholders that have an interest in the success of LB. These are the client, home owners, and consumers.
These three major groups can be further broken down into smaller components. Although there is only one client, OBC, there are two different sub-groups that influenced the creative aspect of the business. The first sub-group is OBC London and the second sub-group is OBC Toronto.
The employees are also grouped into three major groups. There is a senior management team comprised by Carmichael and her assistants and their team oversee LB Taiwan and LB Toronto. The consumers are located in four major areas in Taiwan, Canada, UK, and the United States.
It has to be a global campaign because OBC targeted the launch of their products in countries located in Asia, North America and Europe. It is important to have a global coordinator and this was the responsibility of Carmichael’s team.
However, LB decided to break down the workload so there was a team responsible for the Taiwan launch and another team for the Canadian launch. These teams were not given complete autonomy and had to rely on the directives that will be coming from LB London.
LB teams in London, Toronto and Taiwan had their counterparts at OBC. Client inputs came via two sources, the global coordinator of OBC which can be found in the UK and two sub-groups in OBC London and OBC Toronto.
The consumers are the third and final stakeholder in this case. The consumers are located in different parts of the world and it means different tastes, expectations and more importantly differences in culture. LB must be sensitive about cultural differences.
Consumers in Asia are very much different from consumers coming from Europe and the United States. They have different preferences and LB must consider their needs and not the needs of others.
Analysis of issues
There are at least two major issues. The first issue is linked to the challenges created by a global operation. The second major issue is the failure to recognize that there existed cultural differences between two English-speaking nations even if these two countries share a common heritage (O’Neil 2).
This is of course in reference to the cultural difference between the consumers, creative talent, and corporate leaders in the UK and Canada.
This was made manifest by the conflicts between the ad agencies in London and UK as well as from the client side when corporate leaders clashed heads when it comes to advertising content. OBC’s London office disagreed with OBC’s Toronto office in the creation of Website content for Forever Young products.
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When it comes to the challenges of a global operation, LB was forced to rely on Information Technology to streamline communication processes between LB London and LB Toronto. Due to the considerable distance between two offices there was no other way to speed up communication except through the use of Information Technology.
As a result a simple direct mail concept turned into a fiasco that embarrassed a few LB directors because the client joined them in the conference call. But this is just the beginning the considerable distance between the two teams forced Carmichael to divide the responsibilities such that developing the television and print advertising were the sole responsibility of LB London.
While direct marketing, in-store and Web site communication were the sole responsibility of LB Toronto. In the case of the Website for Forever Young products the Toronto office received two different instructions from clients. The OBC London team and the OBC Toronto team had different views on how to proceed with the project.
Although, the global aspect of the business was a significant challenge that has to be overcome by LB, the most pressing issue is the one that concerns cultural differences. There were two major examples on how cultural differences affected the performance of LB. In the first instance, LB Toronto complained about the insistence of LB London to handle a major portion of the creative process.
LB Toronto justified their objection with the explanation that the Canadian market requires a different approach and using advertising content developed in the UK may not necessarily be effective when it comes to Canada. However, it is difficult to acknowledge that other people are right. Thus, two different teams from two different locations can easily create conflict that would result in poor performance.
LB has to maintain a global coordinator when it comes to handling global brands like OBC. The global coordinator understands the needs of a globalized economy.
The operations can be streamlined if there is only one source of information, especially when it comes to developing advertising content for a global market. In this case, the decision of Carmichael to allow OBC’s UK group to take the lead in creating advertising content was based on her experience working with the London staff of the UK office.
Carmichael requires global headquarters in order to sustain its global presence. However, one of the best ways to handle the problem of communication and finance is to make the UK team and the Toronto team to be independent entities.
Nevertheless, the overall strategy must only come from LB’s headquarters. There must be no division of labor when it comes to the development of advertising content. It must be the main job of the global coordinator and in this case it is the lead team headed by Carmichael. In this manner there is only one message and one theme.
There must only be one global group and everyone has to submit to the final decisions made by AFP headquarters. Although teams are controlled by a central group, LB must empower the smaller groups.
They must be given authority to change the advertising content so that it can be adjusted, and in turn, readily accessible by the target market. It is also important to maintain the autonomy of the creative team that there may be no interference from players and parents.
Finally, LB must learn to deal with cultural differences. One of the suggestions made is to allow the creative teams complete control of the project so that they can finish the project on time.
Providing them the freedom to develop advertising content is a sure-way to create advertising materials that can cause a profound effect in the hearts and minds of the target market. It has to be pointed out that LB Toronto and LB Taiwan does not have complete autonomy and they must follow the directives of LB London.
Recommendation and Implementation
Carmichael must not divide and conquer. It is understandable because she was dealing with a global launch and the people in-charge of the project is located in three different continents. Although LB requires the use of Information Technology there are some areas that require the use of out-date methods.
For example in the development of direct mail LB Toronto did not send the samples through ordinary mail and instead e-mailed a digital copy. This created a major blunder in the presentation. Nevertheless, Carmichael must not sub-divide the responsibilities.
There must be a global coordinator that sets the general theme of the advertising content but it is the local teams that will develop ideas to promote it locally. Creating autonomous teams allow them to adjust advertising content to suit the needs of the target market.
LB must learn to understand the challenges faced by globalization and cultural differences. It is important to maintain a global coordinator that would centrally manage the creative process. A central group can efficiently develop ideas because members of this team have interfaced with clients on a regular basis. But after the establishment of the main group, LB must deal with the impact of cultural differences.
LB cannot afford to develop a strategy and solution that can remedy all problems. LB London and LB Toronto must develop ideas based on their target market. Although they receive directives from headquarters, these local teams must see to it that the advertising content is tailor-made for a specific audience.
O’Neil, Elizabeth. The Leo Burnett Company Ltd.: Virtual Team Management. Ontario: Richard Ivey School of Business, 2003. Print.