MCS001Interpublic (USA), the World’s Third Biggest Marketing Services Group: The Perils of Reckless Global Expansion | Marketing-Brand Marketing Communication Strategies Case Study

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Case Title:

Interpublic (USA), the World’s Third Biggest Marketing Services Group: The Perils of Reckless Global Expansion

Publication Year : 2005

Authors: Shalini, Sumit Kumar Chaudhuri

Industry: Advertising

Region:USA

Case Code: MCS0011

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Since 2002, after the class action lawsuits against it and the investigation by US Securities and Exchange Commission on its accounting irregularities, Interpublic Group, the world's third largest marketing services company, has been struggling to make its records consistent with the US GAAP. In September 2005, Interpublic restated its earnings for the period 2000-2004, which led to the reduction of $514 million in its earnings. The accounting woes stemmed from reckless global expansion initiatives of Interpublic in countries like Azerbaijan, Bulgaria, Kazakhstan, Ukraine and Uzbekistan, where accounting practices are different from those in the US. The company lost clients like GM, Unilever and Bank of America, which affected its brand equity and increased its debt burden.

Pedagogical Objectives:

  • To discuss the negatives of reckless global expansion by a corporate and the resulting factors which could affect a corporate’s brand image.

Keywords : Interpublic; Corporate Strategies Case Study; Global expansion; Marketing services; Inorganic growth strategy; Acquisition; Sarbanes Oxley Act; US GAAP (generally accepted accounting principals); Marketing communications companies; Lowe Worldwide; WPP; Omnicorp; Strategy

Contents:

  • Intergroup's Reckless Expansion
  • The Consequences
  • Potential Aftershocks

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