| dc.description.abstract | Firms adopt various strategies in order to remain competitive in an increasingly
global market. One of the strategies adopted is strategic alliance, which involve
the cooperation between two or more firms who pool resources together to
create a value proposition for their clients and themselves. Strategic alliances
create synergy for the partners through sharing of resources and capabilities
The objectives of the study was to firstly to identify factors that influence the
local advertising agencies to affiliate to international advertising agencies, and
secondly to determine the extent to which these factors have been achieved
after affiliation, in carrying out these objectives the processes and operational
changes to the local advertising agency by the six advertising functions or
departments before and after affiliation were also evaluated.
Data was collected in the month of October 2003. The population of interest
consisted of all local advertising agencies in Kenya affiliated to international
advertising agencies. According to the APA records there are only six agencies
(see Appendix 3). The firms varied in size from small 10-25 employees to large
firms with more than 36 employees.
Both Primary and Secondary data was collected. Primary Data was collected
using a semi -structured questionnaires administered through personal
.intervlews with eighteen executives from the five advertising agencies. These
executivesand staff included the Chief Executive Officers or Managing Directors
of the five agencies. Other staff included Client Service Directors and Account
Directors,Finance Directors, Media, Production and Traffic Managers
Findings indicate that affiliations help a local advertising agency achieve most but
not all of the theorized affiliation objectives. Objectives that do not seem to be
achieved include improved profitability and cost reduction through better
efficiencies. The research found out that positive changes related to
professionalism, teamwork and image. This is consistent with theorized
objectives related to prestige value, learning and global tools. One aspect that
was lacking in the good changes is economies of scale. This means that after
affiliation expected economies of scale are not realized in real terms.
The implication of this challenge is for members of the advertising industry
consider a value chain approach. In this case the remuneration of the
international affiliate should be based on a value added. Activity based costing is
also recommended to manage the cost structures in and of the partnership. Also there is need to reevaluate the accounts function after affiliation. The exit clause in the contract agreement should be fair to both parties and not punitive | en |
