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Grupo ABC And Nizan Guanaess Path From Brazil To The World Case Solution

Solution Id Length Case Author Case Publisher
1948 1228 Words (4 Pages) Rosabeth Moss Kanter, Gustavo A. Herrero, Ricardo Reisen de Pinho Harvard Business School : 313095
This solution includes: A Word File A Word File

Nizan Guanaes founded ‘Grupo ABC’ in 2003 which at the present time is recognized as a top tier advertising company, predominantly in Brazil. In order to accomplish the goal of attaining international recognition and diversification, the group is considering expansion in countries like USA, Germany etc. The group has enough contacts to do so, but the question of as it will be able to do so or not is still to be answered.

World advertising agencies focused their attention to Brazil in 1930s and 1940s. However, with time and local manpower, Brazilian advertising companies dominated the home advertising business. As of 2011, Brazil is the world 6th largest economy. Additionally, it is also the leading player in numerous international markets. In the future, much of the growth of advertising business is expected to arise from BRIC, Latin American and emerging countries. If ‘Grupo ABC’ wants to fulfil its desire of extensive growth, initially it has to target the market segment from these countries.

Case Analysis for Grupo ABC And Nizan Guanaess Path From Brazil To The World Case Solution

Nizan Guanaes, the founder of ‘Grupo ABC’ has a well rounded outstanding individual and professional background. He belonged to an educated family, and in college he studied business administration. Before even starting his advertising career, he had won several prestigious awards. Ultimately, a local company DPZ realized his creative capabilities; therefore, he was exposed to different professional companies in Brazil. With the assistance of his friend, João Augusto “Guga” Valente, Guanaes acquired a considerable stake in DM9 in 1989. With their combined flair and thinking, they recruited the ‘best and the brightest’ local talent. Due to their remarkable and dedicated efforts, DM9 quickly achieved the ladders of success and carved its name in the advertising market of Brazil. Much of the growth of DM9 can be attributed to the efforts made by Guanaes. In 1997, Guanaes realized that for DM9 to preserve its growth mark, it should be a part of a bigger organization. Therefore, DM9 was sold to Omnicom group for a payoff of $111 million. Eventually, to endeavour new challenges, Guanaes and Guga left DM9 in 1999. However, the immediate business experience of the partners was not very noteworthy. In lieu of the ‘dot com’ bubble aftermath, the internet portal company of Guanaes was not able to withstand the pressure. This failure was predominantly linked to poor market timing and bad luck.

Guanaes and his partner took a sharp and far sighted step when they decided to open an advertising agency, ABC group; an agency that would replicate international advertising philosophy in a local Brazilian perspective. Their acquisition strategy was impressive and to the point; therefore, it guaranteed ‘Grupo ABC’ success not only in Brazil but also in Africa. Due to this strategy, ABC booked remarkable profit and revenue figures.

In 2002, Guanaes took an audacious step and 'bought back' the minority shares of DM9, which by then had lost its stature. As Guanaes was sharp and quick in his management style; therefore, he immediately took radical steps to bring the ‘creative’ outlook of the company back. Meanwhile, the acquisition criteria of ABC refined and strengthened which allowed it to expand nationally. Guanaes and his partner were wise and farsighted as they made ABC the holding company. The rest of companies can compete with each other, but at day’s end, the ‘disputed’ client will belong to ABC.

Guanaes had a unique and outstanding management style. On one hand, he relied on his experience and skills in order to venture into acquisitions; at the other hand, he also resorted to the advice of more experienced players. The prevalent organization culture at ABC was elastic for change, yet it was also transparent and encouraged creative empowerment.

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